Author: Fahad Sheikh
Note: This is a community-written piece. The views expressed within are those of the author and not necessarily those of the pSTAKE team.
Staking is a huge ecosystem in the crypto space. It’s one of the manifestations of how crypto has moved beyond just providing a better digital transactional alternative to fiat. It further provides crypto enthusiasts with an income-generating opportunity whilst helping to validate transactions.
As an evolving market, staking has undergone changes to address a major obstacle that has worried investors for long, which is the lack of liquidity of staked tokens. Liquid staking is making waves in the space because it solves this problem and gives users the opportunity to participate in the DeFi ecosystem using their staked tokens. This is enabled through the use of representative derivative stkASSETs/tokens. It is also essential to be aware of the various liquid staking tools in the staking ecosystem that help token holders improve their staking experience.
This article explores three types of interesting liquid staking tools that you should look into.
Staking Calculators are the Most Popular Liquid Staking Tools
Liquid staking has shown to offer several benefits to PoS blockchains and even the DeFi ecosystem. Apart from their enormous contribution to PoS blockchains, the rewards users get for participating in staking are the main reason why staking has become so popular. One of the first things stakers look at before executing any staking contract is the returns they will get for staking a certain PoS token. This necessitated the development of liquid staking tools called staking calculators for staking enthusiasts.
Staking calculators provide some exciting benefits to stakers. These are liquid staking tools that calculate potential yield rewards for certain tokens. Stakers can use staking calculators to better understand the reward they are getting for their risk before they jump in. These liquid staking tools help in proper allocation of funds and allow people to visualize what their yield rewards would look like over a certain time period. Staking calculators have automated the stress of performing tedious calculations to determine rewards from a particular token.
Several calculators are available for stakers to determine how much they can earn from their staked coins over a specific period of time. Cryptolek is an example of one of these liquid staking tools that people can utilize. The platform provides stakers with information on a wide range of staking tokens and calculates the staking yield for you.
Liquid staking tools like staking calculators can be used for a plethora of staking coins. Users are saved the hassle of going to the official dashboard of each coin they have. They have the opportunity to see the yield rewards for almost any token all from one platform. Predictions are based on metrics such as the amount of tokens being staked, duration of the stake contract, estimated APY, and the real time price of the token in the market. Additionally, a liquid staking tool can even tell you which staking platform or validator will offer you the best yield for your tokens.
Staking Aggregators are Great Liquid Staking Tools
Crypto is a huge industry which is constantly evolving with new projects and products getting added over time. DeFi has grown over the course of the past few years since its inception. One of the major factors that helped boost DeFi growth was the convenient availability of information due to all the DeFi tools. Liquid staking now has a good amount of liquid staking tools as well. Staking aggregators are an example of one of the many new liquid staking tools that are being developed. Staking aggregators find out all the various staking platforms and validators for a given token and list them in one place.
There aren’t many staking aggregators available right now, but some have come into the space to provide stakers with the information they need. There are a lot of staking tokens, platforms, and validators in the staking ecosystem, which is why staking aggregators provide a necessary service by gathering information on them all in one convenient place. In general, liquid staking tools like staking aggregators are still fairly new, and many are still under development due to the fact that liquid staking is still an emerging industry in the crypto space.
A hallmark of liquid staking is the ability to participate in the DeFi ecosystem with the derivative tokens that users get. These derivative tokens represent the locked-up staked tokens and are generally referred to as stkASSETs. The stkASSETs are what stakers use to participate in DeFi while maintaining their original staked tokens. Unfortunately, as of right now, liquid staking tools like the current staking aggregators do not really address the DeFi opportunities associated with liquid staking. This means that information regarding the DeFi application of your derivative stkASSETs is not available on any staking aggregators right now.
Staking Platforms are the Most Important Liquid Staking Tools
Staking is a very popular way to earn passive yield rewards in crypto and has attracted a great deal of attention among crypto holders. Liquid staking has completely revolutionized traditional staking – the only reason liquid staking works is due to staking platforms. Unlike regular staking, liquid staking can only be done using liquid staking tools such as pSTAKE. The ability of liquid staking platforms to enable the creation of the entire liquid staking industry makes them the most important liquid staking tools.
Staking platforms offer a number of benefits to stakers. The convenience of being able to stake multiple tokens directly from one platform cannot be understated, but their most important use-case is, of course, liquid staking. Staking platforms like pSTAKE also help to promote the safety of the entire staking industry due to the rigorous amount of internal tech and contract audits that pSTAKE has undergone. These staking tools contribute to the expansion as well as sustainability of the staking market by providing convenience, promoting safety, and creating liquidity for staked tokens.
pSTAKE is a popular staking platform that offers the above benefits and more. pSTAKE offers Persistence (XPRT), Ethereum (ETH), and Cosmos (ATOM) staking for stakers to choose from. More liquid staking options will be added to pSTAKE in the future as well. Due to their remarkable utility and benefits, staking platforms like pSTAKE are an essential liquid staking tool that the entire industry relies upon.
Try Out Some Liquid Staking Tools Yourself
Earning passive yield is an integral part of everyone’s financial plans and this is especially true in crypto. Passive yield rewards can be achieved by several means, but liquid staking is one of the most popular and least volatile ways for crypto enthusiasts to do this. In addition to enhancing network security, liquid staking ensures periodic passive yield rewards whilst allowing you to continue using your funds in DeFi.
There are some liquid staking tools out there that can help improve your liquid staking journey. These liquid staking tools include staking calculators, staking aggregators, and staking platforms. The immense benefits of these liquid staking tools can never be understated, and because liquid staking is still a very new industry, many of these liquid staking tools are still being developed. Liquid staking still has a long way to go before it becomes a mature market, but its potential is huge.