Stader on BNB Chain- The Staking Evolution
2 min read
As we ramp up the development of our platform on the BNB Chain, we feel it’s now time to talk about what we will be bringing to the ecosystem and how the community is going to benefit from the solution.
The Current State of Staking on BNB Chain
BNB token holders today can stake their tokens with any of the 21 validators and earn staking rewards. However, the current state of staking has a few issues:
- Token holders need to evaluate validators themselves, which is difficult as information is not readily available
- They also need to manage their stake and rebalance it manually, which is cumbersome
- BNB staked are locked and cannot be used for DeFi opportunities
To solve these issues and move the staking ecosystem on BNB Chain to the next level, Stader is introducing its liquid staking solution to the ecosystem. This is how it works
- Users stake their BNB with Stader and receive a synthetic token — BNBx.
- Stader pools the BNB together and optimally stakes it to validator nodes — balancing diversification, APR, and fee.
- The rewards generated from staking are added back to the pool and the value of BNBx (in terms of BNB) increases.
But we don’t stop there, Stader will partner with major DeFi protocols on the BNB Chain including DEXs, money markets, and yield aggregators to ensure our users can enjoy a wide range of DeFi opportunities — such as providing liquidity on DEX pools or using BNBx as collateral to borrow other assets. Participating in these will substantially increase the yield that holders make on their BNB tokens.
Advantages of Staking with Stader
With Stader’s solution, the rewards generated through staking will be reinvested back in the validators. This is in contrast to the current staking solutions of BNB where the user has to manually stake their rewards back into nodes. This feature helps investors gain significantly more returns from their BNB.
Stader monitors and manages the validators for you, so get a balance between APR and diversification. We constantly monitor key health metrics for all validators like uptime, slashing history, fee, APR, etc, and optimize the BNB allocation across various nodes so that you get the best risk /reward balance.
When you stake your BNB with Stader you get back our liquid token BNBx. BNBx represents your portion of the stake pool and you can freely transfer or sell your token at any time.
With our BNBx tokens, stakers not only get instant liquidity but also have the option of participating in yield farming opportunities based on your choice of risk. Let’s take a look at a few examples
Low-Risk Option: Stake your BNB and provide your BNBx to a lending protocol like Venus. Returns = 8–10%.
Medium-Risk Option: Stake your BNB and provide your BNBx to a BNB/BNBx liquidity pool on DEXs such as Pancakeswap. Returns = 14–16%.
High-Risk Option: Stake BNB to get BNBx, and provide your BNBx as collateral on a money market to get BNB. Now you have leveraged your position, you can now use this BNB to buy governance tokens and invest in leveraged Alpaca vaults. Returns = 20%+.
Thus, Stader’s liquid staking solution provides better yield opportunities along with more convenience with auto-rebalancing.
1000 BUSD to be Won
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