Within BNB Chain’s vast ecosystem, the BNB token plays a crucial role in maintaining the overarching network, acting as the fuel powering the ecosystem. Moreover, staking BNB is an essential mechanism for decentralized, on-chain governance and helps to maintain consensus while rewarding users for securing the network.
Currently, users can stake their BNB tokens directly on BSC (BNB Smart Chain), a core standalone blockchain component within the BNB Chain ecosystem, to help validate transactions and secure the network.
While the network needs to garner more robust security due to its current staking ratio (upwards of 11%), stakers are also making a tradeoff by being unable to participate in the boundless DeFi opportunities available within the BNB Chain ecosystem.
With liquid staking, the opportunity cost of staking or engaging in DeFi is essentially eliminated, allowing users to benefit from the best of both worlds. Read below to find out more about why liquid staking is ideal in the BNB Chain environment.
Higher Activity & Staking Ratio
BNB Chain has a BNB staking ratio of ~11.7%, including a total staking market cap of $4.58+ billion at the time of writing. This reflects that 18.9+ million BNB of the ~161 million circulating supply is bonded.
While these numbers show promise when it comes to maintaining consensus, the network would greatly benefit from having a higher staking ratio to ensure more decentralization and security.
That’s where liquid staking comes into play. Simply put, the promise of liquid staking would incentivize more token holders to stake their BNB, as they would be receiving instant additional liquidity (which can be used elsewhere, for example in DeFi to generate additional yield) while still earning staking rewards on their staked assets.
As a direct effect, the BNB staking ratio would be poised to rise, increasing the network’s overall robustness and security while benefiting the ecosystem as a whole. Additionally, given that users would have an extra stream of rewards, they would be incentivized to stake their BNB for more time, increasing the longevity of their stake.
Rich with DeFi
The DeFi ecosystem on BNB Chain is flourishing, with 1,400+ dApps (decentralized applications) all benefitting from the network’s high speeds, low transaction fees, and scalability. Given that BNB is the blockchain’s native token, it boasts tremendous utility across the various dApps on the network.
Let’s take a look at some of the top products and dApps built on BNB Chain today:
- PancakeSwap: The chain’s leading DEX/AMM and top liquidity provider branded as a breakfast-themed platform offering trading, farming, staking, games, and more for a variety of BEP-20 assets. The platform currently has 2.2+ million users, $2.89 billion in TVL, and leverages the CAKE native token to power its ecosystem.
- Biswap: The first DEX created on the BSC network that allows users to swap tokens for low fees, earn via farms and launchpools, participate in lotteries and competitions, buy or sell NFTs, and more. It has over $278 million in TVL and 489K active users, with its ecosystem primarily fueled by the BSW token.
- Venus Protocol: A decentralised, algorithmic money market lending and credit system where users can leverage their digital assets to supply collateral and borrow through overcollateralized tokens, also leveraging its VAI stablecoin. The platform is built on BSC and uses the BEP-20 token standard. The protocol has a TVL of $634 million, $353+ million in borrowed funds, and total market size of $985+ million.
- Alpaca Finance: BSC’s largest lending protocol with which users can participate in leveraged yield farming to earn rewards, in addition to allowing borrowers to receive under-collateralised loans for leveraged yield farming positions. Its TVL currently sits at over $482 million and the platform uses the ALPACA coin as its native token.
- Beefy Finance: A decentralised, multi-chain yield optimizer that auto-maximises the rewards across liquidity pools, AMMs, and other yield-farming products. The platform currently has $292+ million in TVL, where around ~$64 million sits in BNB Chain.
The above list only covers the surface of what BNB Chain has to offer. Given the copious amounts of DeFi opportunities present on the network, there’s clearly an opportunity cost for staking native BNB tokens on-chain.
Traditional staking with BNB locks those respective tokens, preventing users from pursuing other earning opportunities across BNB Chain’s rich DeFi ecosystem. However, with liquid staking, users can simultaneously earn staking rewards and secure the network while receiving instant liquidity in the form of a BNB representative token to engage in DeFi.
With the chain’s product line and activity rapidly growing, users will continue to flock toward new and existing applications that continue to innovate and provide lucrative features. BNB plays a pivotal role in how users trade, earn rewards, and participate within each dApp environment.
BNB Liquid Staking Platforms
There are currently several solutions on the market that allow users to participate in BNB liquid staking. Below is a comprehensive list of available services:
- Ankr: This staking product enables users to stake their native BNB and receive aBNBb/aBNBc representative tokens to utilize across DeFi platforms to earn additional rewards. For BNB liquid staking, Ankr currently offers an APY of 6.07% and has a TVL of over 28,000 BNB, requiring a minimum of 1.002 BNB (1 BNB, plus the relayer fee — 0.002 BNB) to get started where users receive their unstaked amount after 7-14 day unbonding period.
- SteakBank Finance: A liquid staking platform built on BSC where users can stake their BNB and directly mint LBNB tokens and participate in liquidity pools or use them as collateral to earn additional yield. The exchange ratio of BNB/LBNB is 1:1, and staked tokens are subject to a 7-day unbonding period. Its BNB liquid staking service currently offers 6% APR, with 455+ BNB staked.
- Stafi: This cross-chain derivative protocol allows users to liquid stake their BNB to receive rBNB, a synthetic staking derivative of the native asset. At the time of writing, BNB liquid staking on the platform has a staked value of $70,657 with 290+ staked tokens. Users can freely exchange and trade rBNB – the token is not subject to any unbonding periods.
Given the various options available across the industry, although still in its infancy, BNB liquid staking is now not only lucrative but also easily accessible for anyone to participate. These solutions drastically reduce the barrier to entry for staking and make the process far more seamless, all while allowing users to reap the benefit of instant duplicate liquidity.
Paving the Way Forward
With BNB Chain’s presence continuing to grow and reach new heights, new and existing liquid staking platforms with BNB solutions are poised to follow suit. The opportunities for BNB liquid staking are endless, unlocking liquidity for the chain’s native token and subsequently opening the door to new DeFi possibilities across the network’s vast suite of DeFi products and applications.
BNB Chain is the perfect ecosystem for a liquid staking solution because of its high user activity, liquidity, and rich flourishing DeFi ecosystem. BNB liquid staking is beginning to cement its place as the next evolution of staking on BNB Chain – this is only the starting point of an exciting journey ahead.
The pSTAKE team is currently building a BNB liquid staking solution for token holders. By depositing their assets on our platform, they’ll be able to directly mint stkBNB, which can be used across BNB Chain’s DeFi ecosystem to generate additional yield.
This implementation will help drive adoption for BNB Chain by bringing in more liquidity in staked assets to the network, which will have a direct increase in dApp users, TVL, and activity. Furthermore, it will help encourage developers to innovate and develop new applications to provide greater utility across the chain.
The stkBNB mainnet is expected to go live in August 2022, signifying the next stage in pSTAKE’s journey to build our ecosystem further.
pSTAKE is a liquid staking solution that unlocks the potential of staked PoS assets (e.g. ATOM). PoS token holders can stake their tokens via the pSTAKE application to receive stkASSETs (ERC-20 representative assets of the respective underlying tokens) that can then be transferred to other wallets or smart contracts on the Ethereum network to generate additional yield.
Currently, pSTAKE issues ERC-20 liquid staking representative tokens on the Ethereum network, with a long-term aim of building a multi-chain protocol issuing liquid staked representatives on multiple networks including the Persistence Core-1 chain.
We have a bag full of new features and an exciting roadmap for the coming months, so follow our socials below to stay up-to-date with the latest developments.
Developed by Persistence
Persistence is a Tendermint-based, specialised Layer-1 network powering an ecosystem of DeFi applications focused on unlocking the liquidity of staked assets.
Persistence facilitates the issuance and deployment of liquid-staked stkASSETs, allowing users to earn staking rewards while participating in DeFi primitives, such as lending/borrowing and liquidity provisioning on DEXs.
Persistence aims to offer a seamless staking and DeFi experience for PoS (Proof-of-Stake) users and enable developers to build innovative applications around stkASSETs.
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