Staking cryptocurrencies on proof-of-stake blockchain networks has become one of the popular methods to generate consistent returns on crypto. Whereas DeFi offers the potential for spectacular yields at very high risk, staking offers a more steady return of around 15% on average, according to the current numbers on stakingrewards.com. Still considerably higher than anything you’d get from a bank, but generally at significantly lower risk.
However, the fact that staking requires a lockup of tokens means that currently, it’s an either/or decision. If a user with some appetite for risk wants to hedge against the reliability of their staking income, they’d have to unstake their funds to be able to use it. This is a feature rather than a bug – it’s designed to enhance the security of a blockchain during black swan events. However, it also ensures that a significant amount of liquidity is locked out of the broader crypto-financial ecosystem.
Now, Persistence is about to unleash the next product in its suite – pSTAKE. It’s aiming to overcome the staking challenge, providing users with a simple and intuitive means of staking, and unlocking the liquidity held in a Proof of Stake market worth over $600 billion. And all while enhancing the overall security and decentralization of the staking ecosystem.
What is pStake?
pSTAKE is a liquid staking protocol that allows users to unlock the liquidity of their staked assets. How does it work? Well, rather than staking tokens with the platform directly, users will stake them via the pSTAKE protocol. In return, the user will receive 1:1 pegged pTOKENs. These tokens represent the user’s stake on the Ethereum blockchain and can be used in the Ethereum DeFi ecosystem.
Under the hood, pSTAKE delegates the assets to one of its whitelisted validators on the underlying PoS network on which the user wishes to stake. In this way, the user receives their staking rewards. However, the pTOKENs that they receive from the pSTAKE protocol can be supplied as liquidity to DEX pools, earning a share of transaction fees, or provided to decentralized lending pools in return for interest. The yields generated from these DeFi deposits are on top of the staked rewards, scaling up the earning potential from the same initial stake.
Cosmos is the first network to be supported on the pSTAKE application, followed by Persistence.
Another Tool in the Persistence Box
Persistence is emerging as a hot new contender in DeFi, and is also flying the flag on behalf of a multichain ecosystem. pSTAKE is based on Ethereum and Cosmos, and Persistence works with multiple other platforms in its various offerings and operations. The project already operates a decentralized commodities exchange called ComDex, which recently passed $100 million in transaction volume.
The launch of pSTAKE is underpinned by Persistence’s credentials in the Proof of Stake field. The project also operates Audit.One, a staking-as-a-service solution that secures over ten networks, including Polygon, Cosmos, Terra, NEAR, and Persistence’s own platform.
Persistence has also onboarded a group of professional and established validators for its network, including Band Protocol in Thailand, Cosmostation in South Korea, Tavis Digital in Switzerland, and Huobi Pool in China. The first 16 validators onboarded by Persistence collectively secured over $7 billion worth of assets. Therefore, the project has a well-established network and reputation among the PoS community, offering a secure way for any user to unlock their staked liquidity with pStake.
pSTAKE will launch on the 15th of June, at 12 PM UTC.