pSTAKE’s liquid-staking solution on BNB chain a major milestone for Binance

liquid staking

According to a recent announcement by Persistence, pSTAKE has launched a liquid-staking solution called stkBNB on the BNB Chain.

In essence, the liquid staking concept allows investors to stake digital assets while retaining the tradable variant of the staked asset.

In this case, the stkBNB will allow investors to stake any non-zero amount of BNB (BNB/USD). It will therefore serve as a major boost for the BNB ecosystem by encouraging and allowing interested users to take part in various DeFi activities using their liquid-staked BNB besides the staking rewards.

How the stkBNB functions

Once an investor stakes any non-zero BNB amount, the user will be issued with stkBNB coin instantly through an exchange rate framework that is similar to the model currently used by Compound’s cToken.

 The value of the issued stkBNB keeps growing as staking rewards automatically accrue.

Users also have the option of auto-compounding their assets to generate the highest yields possible.

When the investor feels it is time to unstake the staked BNB, pSTAKE automatically burns the issued stkBNB and issues an equivalent amount of BNB into the user’s crypto wallet. The unstaked BNB can then be withdrawn after a period of 15 days once the validators safely undelegate the funds.

It is important to note that the staking rewards accrual stops immediately after the unstaking action is completed.

pSTAKE’s reward distribution setup

The staking rewards within the BNB ecosystem come from the transaction fees paid by the BNB Chain users. As a result, the reward change depending on the network’s activity.

According to a post by pSTAKE, the stkBNB protocol works as follows:

  • All the earned rewards are distributed to BNB holders who stake their assets with pSTAKE.
  • A user’s staking reward automatically compounds at the end of every epoch.

This distribution model will remain active for the first 90 days after the launch of the mainnet after which fee distribution is subject to amendments through community consensus through a governance vote.

At the moment (initial bootstrapping phase) fees are waived and are subject to revision after three months through a governance vote.

Industry leaders tasked with verifying stkBNB’s smart contracts

According to pSTAKE, every smart contract operating on the stkBNB platform is audited by industry leaders including Halborn and PeckShield.

pSTAKE is also working closely with Certora to validate the rules that have been hard-coded into stkBNB smart contracts. It has also integrated with Forta Network for bot detection to monitor and identify threats and therefore enables fast response time in case of key issues. Forta also facilitates on-chain tracking of smart contracts.

In addition, pSTAKE has also partnered with Immunefi and has launched a $300K bug bounty campaign.

pSTAKE’s BNB liquid staking solution benefits

  • pSTAKE’s aforementioned offering provides users with instant liquidity (primarily in the form of stkBNB) on their staked digital assets.
  • Staked assets are balanced and spread across many high-performing validators to maximize user returns.
  • The accrued rewards are auto-compoundable, which results in the highest yield possible.
  • pSTAKE offers a high degree of operational flexibility for its clients, allowing them to bypass the traditional 7-day un-bonding period when unstaking BNB.
  • The new level of liquidity for the BNB chain by bringing staked assets into the DeFi ecosystem can help spur dApp utilization.

Conclusion

Since its launch of the pSTAKE liquid staking platform, Persistence’s top priority has been to keep adding more DeFi use cases for the stkBNB to expose stakeholders to more benefits besides the staking rewards.

stkBNB is expected to foster the next phase of growth for the BNB Chain by bringing staked BNB into the BNB DeFi ecosystem while giving users the chance of participating in securing Binance’s native blockchain network.

The post pSTAKE’s liquid-staking solution on BNB chain a major milestone for Binance appeared first on Invezz.

from Cryptocurrency – Invezz

Leave a Comment