DYDX Liquid Staking
The migration of dYdX, the biggest Perpetual DEX, to its own app chain within the Cosmos ecosystem marks a significant milestone. Cosmos, often hailed as a marvel in the Proof of Stake (PoS) blockchain domain, enables leading protocols to launch their independent PoS chains. This capability facilitates enhanced economic security and greater decentralization, which were key factors in dYdX’s decision to transition to Cosmos.
With the transition to a PoS network, DYDX token holders now have the opportunity to stake their tokens, thereby contributing to the security of the dYdX Chain. In return, they earn staking rewards in USDC, derived from protocol volumes rather than token inflation, presenting a robust real yield option.
However, the staking process traditionally locks tokens for a 30-day unbonding period, making them illiquid and unusable in other DeFi applications. pSTAKE’s introduction a month ago tackled this issue by blending staking benefits with DeFi flexibility.
$DYDX liquid staking is a multi-billion dollar market and can be a massive boost for Cosmos DeFi. stkDYDX is a force of reckoning for the dYdX and decentralization.
DYDX liquid staking is a milltion-dollar market, that could bring about the boost for DeFi in Cosmos.
Launched a month ago, pSTAKE addresses this challenge and offers users the best of both worlds—staking and DeFi. pSTAKE is committed to capturing a significant market share for DYDX liquid staking.
Let’s look at the current DYDX liquid staking landscape on pSTAKE and what’s next for it.
Phase 1: Foundation
Phase 1 of DYDX liquid staking on pSTAKE was all about ensuring the highest level of security, rolling out innovative features such as no-click auto-compounding, Flash Unstake, and 0% fee.
pSTAKE recently completed one month of the DYDX liquid staking. Sharing one month of stkDYDX highlights below:
Staking Statistics
In the last month, ~55,000 DYDX have been staked through pSTAKE, unlocking a Total Value of around ~$215,000.
Security
Security = Top priority
Here’s everything we are doing to ensure safe & secure DYDX liquid staking👇🏼
- stkDYDX auto-compounding security audit by Oak Security
- pSTAKE Security audits by Oak, Halborn, Notional, and Hexens
- Bug bounty program Immunefi
- On-chain monitoring
Security audit reports: https://github.com/persistenceOne/pStake-auditReports/tree/main/stkATOM
Auto-Compounded Rewards
All USDC and DYDX staking rewards earned are automatically compounded on pSTAKE, with a 0% fee. This ensures that users’ stake grows effortlessly, maximizing the returns over time.100% rewards are auto-compounded without any fee. No place else like this!
Decentralization Impact
pSTAKE’s commitment to decentralization is reflected in the automated distribution of staked tokens across ~48 validators based on certain on-chain parameters (refer to the image below), with real-time validator distribution trackable through our app. This automated validator strategy further enhances the security and resilience of the dYdX network.
Check real-time validator decentralization and delegation: https://pstake.finance/dydx/validators
stkDYDX in DeFi
The liquidity pool for stkDYDX has made an impressive leap, surpassing $500,000 in liquidity. Currently, the pool is incentivized with 150,000 PSTAKE, offering one of the most competitive liquid staking yields for DYDX in the market.
Phase 2: Traction
Phase 2 of DYDX liquid staking on pSTAKE is about going all out in terms of making stkDYDX highly liquid and deeply rooted in the Cosmos DeFi ecosystem. In the dynamic world of decentralized finance (DeFi), liquidity is king. This principle is fundamental in the context of liquid staking, as Liquid Staked Tokens (LSTs) heavily depend on liquidity to function effectively. Without liquidity, LSTs and DeFi use cases such as collateralization, which builds another layer on top of liquidity, cannot exist.
The adoption and liquidity of DYDX underscore its potential. The DeFi summer for DYDX is yet to start, and liquid staking will bring the much-needed liquidity and adoption for that. pSTAKE is ready to move forward in FULL THROTTLE MODE.
The goal for pSTAKE in this Phase 2 of DYDX liquid staking growth is straightforward: focus on making stkDYDX the most liquid DYDX LST and ensure stkDYDX is highly accessible. stkDYDX everywhere!
More liquidity. More utility. More awareness. More traction.
pSTAKE is in the final stages of discussions to integrate stkDYDX across multiple Cosmos DeFi protocols, aiming to make it increasingly accessible. We are particularly exploring the following integrations and use cases:
Private DeFi
pSTAKE is all set to partner with Shade Protocol, making stkDYDX the first DYDX Liquid Staking Token (LST) to be integrated into Shade’s extensive Private DeFi suite. stkDYDX will be paired with the native DYDX token, utilizing Shadeswap’s asymmetric stableswap Automated Market Maker (AMM) to facilitate efficient trading and liquidity provisioning opportunities. Additionally, a liquidity pool with SILK will also be considered.
Another interesting offering within Shade’s Private DeFi suite is to use stkDYDX to borrow or mint Stablecoin such as SILK.
SILK is an overcollateralized and privacy-preserving stablecoin with its value pegged to a basket of assets and commodities.
Money Market
As the native token of the dYdX platform, DYDX stands at the forefront of potential growth within the Cosmos DeFi ecosystem, thanks to its exceptional utility, significant real yield from staking rewards, and robust market traction. The introduction of stkDYDX is set to be a game-changer, unlocking the liquidity of staked DYDX and thereby accelerating DeFi adoption. One of the largest DeFi utilities for DYDX could exist within the borrowing/lending markets.
pSTAKE is looking to partner with Nolus (DeFi lease), UX (earlier Umee), Mars Protocol, Ghost (Kujira), and Carbon (Demex) to enable stkDYDX as a collateral option in their vast money market ecosystems.
The ability to borrow or lend an asset to run different strategies to maximize yields based on the risk appetite is an important aspect of DeFi. This functionality not only adds a valuable layer to stkDYDX’s utility but also integrates it more deeply with the Cosmos DeFi, enhancing its versatility and appeal to a broader user base.
Minting Stablecoins
The integration of stkDYDX into minting the stablecoin will not only ensure greater liquidity and stability but also introduce a new level of accessibility and utility for users within the Cosmos DeFi ecosystem.
pSTAKE will potentially partner with Kujira to enable stkDYDX as a collateral option to mint USK Kujira’s native overcollateralized stablecoin. Additionally, using stkDYDX to mint IST on Inter Protocol will also be considered.
Minting of stablecoins using LSTs as an option presents a very unique DeFi opportunity.
The Road Ahead
pSTAKE is all prepared and committed to move forward in FULL STEAM and integrate stkDYDX EVERYWHERE!
By focusing on liquidity, utility, and integration, we are setting the stage for stkDYDX to become a cornerstone of the Cosmos DeFi landscape. The planned integrations and use cases not only broaden stkDYDX’s appeal but also cement its role in facilitating secure, versatile, and efficient DeFi operations
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 (Tokens) which can be used to explore additional yield opportunities across DeFi.
At present, pSTAKE supports Cosmos (ATOM), Binance chain (BNB), dYdX network (DYDX), Osmosis (OSMO), with the support for Stargaze (STARS) and Persistence (XPRT) in the future.
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