We’re happy to announce that liquid staking 1.5 will be live in 10 days!
Substantial improvements to our staking model come with liquid staking 1.5. Before jumping to what liquid staking 1.5 entails, let’s quickly review Algem’s liquid staking model on Astar.
What is Liquid Staking?
Staking is locking up your tokens up with a trusted validator, which validates transactions on Proof-of-Stake (PoS) blockchains like Polkadot and Kusama. Nominators are token holders who pick a validator and lock their tokens with them. Validators are the ones who stake large numbers of tokens.
When a validator verifies a lousy block, their token balance is reduced as punishment.
Validators and nominators each receive a reward when a block is successfully verified.
The verifying of transactions on blockchains with staked tokens is referred to as Proof of Stake (PoS) blockchains.
Tokens staked using the PoS consensus mechanism benefit from increased efficiency and utility thanks to liquid staking.
If you stake a token in a PoS system, you can’t use it to buy anything else.
Tokens staked are locked for a set amount of time before they can be withdrawn and used. In other words, staked tokens are illiquid.
This issue of illiquidity is resolved by liquid staking, which issues a synthetic token that is 1:1 in value to the staked tokens.
Users who stake through a liquid staking platform earn staking rewards and can pursue other yields with the synthetics received or even sell the synthetics when liquidity is required.
Algem’s Liquid Staking Solution
Liquid staking of Astar Network tokens (ASTR) is now possible with the help of Algem, a liquid staking solution.
Astar tokens that have been staked must wait for 10 ERAs (roughly 10 days) before they can be unbound.
When a user stakes Astar tokens on Algem, they get nASTR, which is a 1:1 replacement for the staked Astar tokens.
Let’s look at an example with our friend James.
- James can quickly add his ASTR holdings to Algem by taking them out of the AstarDegens dapp in Astar’s dApp Staking.
- Algem will stake back this ASTR on the AstarDegens dApp on James’s behalf
- James gets an amount of nASTR equal to the amount he staked.
- After receiving the nASTR, James can use it to look for additional profits with Algem’s affiliated dapps.
- James also gets dapp staking rewards from AstarDegens dApp, channeled through Algem.
When version 1.5 of liquid staking comes out, four decentralized apps will be available…
- Astar Network
- Astar Degens
- TBD (based on Twitter poll results)
A Twitter poll will be set up so that you can vote on which fourth app should be released.
After we launch, we’ll poll the community on Twitter once a week to determine which dapp should be added to the next multi-pool.
How To Utilize Liquid Staking Tokens
Users who staked Astar on Algem can use the nASTR tokens they got on a number of partner dapps.
These partner dapps are:
- Sirius Finance: Sirius Finance is a stablecoin automated market-making infrastructure on the Astar network. Users can pair nASTR-ASTR and farm using the pair on Sirius Finance and get rewards in the SRS token.
- Kagla Finance: Kagla is an AMM and stable swap protocol on the Astar network. You can pair nASTR-ASTR and farm rewards with the pair on Kagla.
- Arthswap: Arthswap is the number one Defi exchange on the Astar network. $nASTR will be supported on the Arthswap exchange and farms.
A brief explanation of the liquidity hub and how to use it
The Algem website has an nASTR liquidity hub, which is a carbon copy of the interface of partner DeFi dApps. So, you can use nASTR and access our partner dapps without leaving the Algem interface.
To begin gaining more benefits immediately, start here.
With the release of version 1.5 of liquid staking, you can now stake Astar tokens on any decentralized application (dapp) available in Astar network dApp Staking. In that case, you can start farming more rewards using Algem’s liquid staking solution to back your favorite dapps on the Astar network.
Algem is a decentralized application built on the Astar Network and offers two main features: liquid staking and liquid lending. As their names suggest, these two options let ASTR holders keep their assets liquid while putting them to work. Also, the liquid staking and lending solutions let users use Algem’s liquid nASTR tokens across Astar’s Defi ecosystem to earn staking rewards and make more money. In doing so, Algem supports other Defi protocols by providing liquidity and creating a sustainable and cooperative ecosystem on the Astar Network and Polkadot.