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Liquid Staking
stDOT
stGLMR
Taking the baton from Lido's sunsetted liquid staked DOT, StellaSwap decided to relaunch stDOT to restore its former glory in fostering ecosystem growth.
stDOT is a liquid token that represents your share of the total DOT.xc pool deposited with StellaSwap. Any user that stakes DOT.xc will immediately receive newly minted stDOT. Over time, as your DOT delegation accrues rewards, the amount of your stDOT increases. When a user delegates their DOT tokens on StellaSwap for stDOT, they do not need to perform or wait for the completion of any delegation or activation steps, as is the norm in traditional staking. The user can instantly exchange stDOT for DOT at any time in the open market.
In traditional Proof-of-Stake (POS) staking within Polkadot, a user has to perform several steps manually:
- Create a Stash Account and bond DOT to it;
- Nominate validators;
- Monitor validator's yield to maximize profit.
Staking on Polkadot requires expert knowledge and a great deal of resources, as well as incurring a core risk of slashing that can get very severe if the staking is managed improperly.
Staking DOT via StellaSwap radically simplifies the staking process and absolves the need for users to maintain their own staking infrastructure. Users can;
Start earning staking rewards easily in 1-click without locking in your assets
Instantly liquidate your stDOT w/o waiting for unbonding period
Supercharge their DeFi by using stDOT across numerous usecases like stacking farm rewards, lending/borrowing etc.
Use their Metamask or any ERC wallets as we're fully EVM compatible!
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One of the core benefits of StellaSwap's stDOT is that our validation nomination strategy is optimized to keep a higher chance of getting into the active set w/o decreasing APRs. Here are the following metrrics that we constantly track to ensure we select the best validators in the ecosystem;
- Era points
- APR
- Stake amount
- Nominators list
- Slashing
- Payout rate
wstDOT is the wrapped version of stDOT. Due to the nature of Lido, the amount of stDOT on your balance is not constant - it changes daily as staking rewards come in. This is what's known as a rebasable token. In the case of stDOT, this is reflected through a daily token balance change to reflect your earned rewards.
This rebase works across integrated DeFi platforms like Curve. This means that if you are to stake your stDOT across these protocols to earn additional yields, you will continue to benefit from daily stDOT staking rewards as well. StellaSwap is not designed for rebasable tokens and as a result, you risk losing out on a portion of your daily staking rewards through providing stDOT as liquidity across these platforms.
As some DeFi protocols - e.g. StellaSwap - require a constant balance mechanism for tokens, Lido let's you "wrap" your stDOT into wstDOT to keeps your balance of stDOT fixed. Instead of updating daily, wstDOT uses an underlying share system to reflect your earned staking rewards.
For Example:
- You wrap 100 stDOT to 99.87 wstDOT.
- You continue to earn rewards on your wstDOT.
- When you unwrap your wstETH, you receive 101 stDOT.
wstDOT allows for seamless integrations across the DeFi space, facilitating the growth of stDOT as a key piece of many unique Ethereum protocols.
*Coming Soon*
A DOT.xc token holder connects their wallet and deposits their tokens into StellaSwap's stDOT. They immediately receive stDOT tokens that represent a share of the total pool, and StellaSwap delegates DOT to our selected validators on the Polkadot network. When these delegations accrue rewards on the allotted stake, the total DOT under management grows and this increases the value of stDOT tokens.
The amount of stDOT that you will receive is calculated based on the ownership share. The reason you get slightly less stDOT than DOT.xc is due to rounding when dividing:
shares_amount = amount_of_DOT.xc * getTotalShares()
/ getTotalPooledKSM();
stDOT_amount = shares_amount * getTotalPooledKSM()
/ getTotalShares();
Where:
amount_of_DOT.xcis a given DOT.xc you want to exchangegetTotalShares()is a call to Lido contractgetTotalPooledKSMis a call to StellaSwap's contract. This method works with KSM as well as with DOT.
In traditional Polkadot staking a user has to perform several steps manually:
- Create a Stash Account and bond DOT to it;
- Nominate validators;
- Monitor validator's yield to maximize profit.
Staking on Polkadot requires expert knowledge, the main being the fact that slashing can get very severe if the staking is managed improperly.
Staking DOT through StellaSwap will come with a variety of benefits:
- One-step process — just deposit into the pool with a single click.
- The pool takes care of validator diversification.
- Immediate appreciation — you start earning from the pool from the moment of deposit.
Withdrawals of DOT.xc from StellaSwap can be done through the
Unstake tab. However, unstaking directly from StellaSwap will incur the Polkadot unbonding period, which is roughly 28 days. Immediate withdrawal options are available in the open market through liquidity pools on StellaSwap's Pulsar V3 where one will be able to immediately exchange stDOT for DOT.xc. If you wish to instantly receive DOT.xc, we recommend trading stDOT directly on StellaSwap.DOT.xc can be instantly exchanged for DOT through the Transfer tab.
- Downtime risk: Polkadot validators can go offline, in which case they do not earn staking rewards. To minimize this risk, StellaSwap stakes across multiple professional and reputable node operators with heterogeneous setups. This will also serve to mitigate potential slashing risks.
- stDOT Price Risk: As mentioned above, withdrawals from StellaSwap take some time to deactivate. Liquidity pools in the open market will be available for instantly redeeming stDOT for DOT. On such pools, users risk an exchange price of stDOT, which is lower than the inherent value due to withdrawal restrictions on StellaSwap, making arbitrage and risk-free market-making impossible. We driven to mitigate the above risks and eliminate them to the extent possible. Despite this, they may still exist, and hence it is our duty to communicate them.
Last modified 18d ago