Overview
As the adoption of pSTAKE-issued stkTokens grows, their roots become stronger in the DeFi landscape of the networks they are present on. stkTokens enable one to quickly swap out of a staked position (stkBNB to BNB) without waiting for the unbonding period. This is primarily achieved through stkToken liquidity against the underlying base token on a DEX (or unique features such as Instant Redemption on stkATOM).
Bootstrapping deep stkToken liquidity (sustainably) has been a priority since day one. $PSTAKE incentives from the Incentivisation & Community Development fund have played a vital role in achieving this. As with any other decentralized protocol, these incentives have been subject to community governance proposals.
pSTAKE Incentive Program
Up to this point, $PSTAKE incentives across ecosystems have been standalone, whether forum discussions, governance proposals, or external outreach and reporting to pStakers and liquidity providers. A new blog series called the “pSTAKE Incentive Program” has been launched to address this issue. This post is the first one and provides forward-looking insights into $PSTAKE incentives for July 2023.
Below is a summary table of incentives allocated to various protocols for sustainably growing stkToken liquidity and utility across Cosmos and BNB Chain for July 2023.
| Protocol | Ecosystem | DeFi | PSTAKE Incentive |
|---|---|---|---|
| Dexter – stkATOM/ATOM Pool | Cosmos | DEX | 700,000 |
| Osmosis – stkATOM/ATOM Pool | Cosmos | DEX | 300,000 |
| ShadeSwap – stkATOM/ATOM Pool | Cosmos | DEX | 20,000 |
| ShadeSwap – stkATOM/SILK Pool | Cosmos | DEX | 80,000 |
| Thena – stkBNB/BNB Pool | BNB Chain | DEX | 440,000 |
| Wombat – stkBNB/BNB Pool | BNB Chain | DEX | 30,000 |
| Venus – stkBNB collateral | BNB Chain | B/L | TBD on launch |
| Total for July 2023 | 1.57M |
Rationale
pSTAKE on Cosmos
stkATOM has over $3 million in liquidity on various DEXs within the Cosmos ecosystem, such as Dexter, Osmosis, Crescent, and ShadeSwap. A substantial amount (~$1.5 million) is located on Dexter, a natural fit for stkATOM liquidity due to its highly efficient Metastable pool type offering. Like pSTAKE, Dexter is built on the Persistence chain, providing pStakers with the best LSTfi experience in the Cosmos ecosystem. Liquid staking on pSTAKE and providing liquidity on Dexter can be done in just two transactions, saving time and effort.
stkATOM liquidity is also incentivized on the other mentioned DEXs. Each of these platforms offers a unique proposition for stkATOM utility, ranging from Osmosis’ DeFi dApps to Shade Protocol’s privacy and $SILK vaults.
pSTAKE on BNB Chain
stkBNB has more than $3.8M in liquidity on DEXs such as Thena, PancakeSwap, and Wombat. Each of these DEXs has a unique liquidity mechanism that caters to yield-bearing tokens like LSTs. This ensures much higher trading efficiency without the need for very deep liquidity pools. The incentives for stkBNB liquidity aim to maintain the current liquidity as stkBNB becomes more integrated into the BNB Chain.
One such planned integration is stkBNB as collated on Venus, the largest money market in BNB Chain. Initially, borrowing against stkBNB will be incentivized to bootstrap liquidity and gain early traction. Borrowing against LSTs is a nature use case. It is highly efficient & attractive, as it allows one to retain staking rewards. Venus incentives depend on the launch, which is still not finalized, as the Venus team prepares for a secure launch of Isolated Lending Markets.
Conclusion
Liquidity staking unlocks liquidity of staked tokens & use-cases in DeFi. stkTokens are nothing without liquidity against their underlying base token. The pSTAKE team understands the importance of keeping everyone informed about where this liquidity and DeFi utility will be available, along with the incentives for achieving it. The pSTAKE Incentive Program blog posts will be published in the last week of each month, providing insights into the $PSTAKE incentive plan for the upcoming month.
About pSTAKE
pSTAKE is a multi-chain liquid staking protocol that unlocks liquidity for your staked assets. With pSTAKE, you can securely stake your Proof-of-Stake (PoS) assets to earn staking rewards, and receive staked underlying representative tokens (stkASSETs) which can be used to explore additional yield opportunities across DeFi.
At present, pSTAKE supports Binance Chain (BNB), Cosmos (ATOM), and Ethereum (ETH) networks’ native tokens, with a view to support more chains and assets in the future.
