pSTAKE, the liquid staking solution developed by Persistence, recently launched liquid staking for BNB. The implementation allows BNB stakers to leverage their staked assets’ value, especially in DeFi, using tokenized staked representatives called stkBNB.
BNB is currently among the world’s most popular utility tokens. It enables payments and reward distributions on the BNB Chain, serving as the ecosystem’s backbone. The coin is also crucial for network security.
BNB holders can stake their assets on-chain to validate transactions and earn rewards. But traditionally, this also locks up the user’s assets, making them unusable in the broader blockchain-based financial ecosystem, including DeFi. Given the industry’s rapid growth, this is a massive opportunity loss for users.
pSTAKE tackles this problem head-on with its liquid staking solutions. It enables users to stake their BNB coins and leverage them elsewhere, across the BNB Chain ecosystem. The implementation uses the exchange rate model to instantly issue stkBNB to users who stake BNB. This liquid-staked asset (stkBNB) can be used across the BNB Chain ecosystem by users to earn additional DeFi yields on top of staking rewards.
Now, the BNB Chain ecosystem consists of over 1400 dApps and DeFi protocols offering a myriad of investment opportunities to users. The staking market cap of the ecosystem is $4.58 billion with a BNB staking ratio of over 11.7% and APR of 5.04%. In this regard, the implementation of liquid staking allows users to stake their BNB and earn the guaranteed 5.04% APR while still being able to participate in activities across the 1400 dApps. This significantly increases the annual yields for users and thereby offers increased scope for the adoption of liquid staking.
pSTAKE ensures that stkBNB smart contracts are regularly audited to ensure optimal security for the user’s assets at all times.
Fostering DeFi 2.0 with Liquid Staking
The demand for scalability, besides increasing environmental consciousness, has propelled steep Proof-of-Stake (PoS) adoption. Over 80 blockchains already use this consensus mechanism for network security, with many others planning to migrate, including Ethereum. But this also means the value is getting increasingly locked up in siloes across the blockchain-powered ecosystem.
As mentioned above, staking makes assets unusable in DeFi, resulting in opportunity loss for users. Similarly, DeFi protocols lose out on substantial liquidity, which could otherwise help them scale faster. The limitations inherent in traditional PoS staking thus hampers both users and innovators.
This is where liquid staking comes in handy. It unlocks the staked assets’ value, making it relevant to DeFi. It also facilitates unprecedented utility and benefits the industry’s stakeholders at large. Users can optimize returns by earning additional yield over and above the staking rewards. Innovators can serve these users for greater outreach and community engagement besides tapping into the unlocked liquidity. There’s greater capital efficiency for everyone.
pSTAKE’s primary significance lies in making liquid staking more easily and widely accessible. Persistence has designed this protocol for maximum seamlessness and ease of access for end users. Most things on the platform happen with a few clicks. Moreover, a single app allows users to participate in liquid staking across multiple PoS networks—the latest addition to this cohort is BNB Chain.
Liquid staking in general, and pSTAKE in particular, creates additional value layers and avenues for the industry. From DeFi’s perspective, this paves the way to the next paradigm, a.k.a. DeFi 2.0. It’s also the road to greater blockchain and crypto adoption. Moreover, with optimal utilization of decentralized liquidity, there can be greater financial inclusion globally.
pSTAKE’s BNB Chain implementation is a prominent step in this direction. It’ll broaden the horizons for BNB users. Projects running on the BNB Chain will benefit equally, using novel capital streams to innovate the future.