Can StaFi Be The Missing Link For POS Chains?

By RitabeII | Helloadaora | 30 Apr 2021


With the massive energy costs linked to the Proof of Work consensus protocol, more blockchains are opting for the staking-based Proof of Stake (POS) consensus protocol. And rightly so, the crypto space can’t continue to gobble up as much as 1% of the world’s energy production. 

Though energy-efficient, POS isn’t entirely perfect. Its frailties are mostly tied to security and centralization grounds, which are substantial reasons for anyone to be worried. There’s also the convenience angle that’s quite in the spotlight compared to the others. 

StaFi Protocol

As more blockchains embrace the POS consensus protocol, the search for a fix for its many failings continue. The StaFi protocol is one of the solutions to some of the challenges, but can it be the missing link for POS chains? Here’s why StaFi could change things for POS chains.

Liquidity Unlocking Capability

If there’s one thing that haunts protocols dependent on a POS consensus, it’s the locking of the assets as a means of securing the chain. Though this removes the massive energy costs that have rendered POW quite expensive but having your assets held down for meagre rewards isn’t always a great experience, especially if you stumble on a very nice trade. 

Thanks to the StaFi protocol, you can use your staked tokens without actually unstaking them. The protocol actualizes this through the creation of synthetic derivatives of your staked assets. 

The zero need to unstake assets is something most users of POS chains must be happy about through StaFi as undesirable fees and the time-wasting are curtailed to the minimum. 

rToken App

StaFi protocol doesn’t unlock liquidity in POS chains through words of magic or wishful. The decentralized platform makes this happen with the aid of rToken apps. Using these apps, users can stake their assets of relevant POS-based tokens and get the relevant rToken. 

Currently, StaFi has launched several rToken apps like the rDOT, rETH, rKSM, and rFIS. Of course, these are all synthetic derivatives of the specific token. 

Once you stake your DOT, ETH, KSM or FIS, you get the rToken, and you can do as you wish with it. This way, you can earn staking rewards accrued for securing the POS chain while deploying the liquidity as you deem fit. 

How Secure Is StaFi protocol?

StaFi protocol operates as a go-between, bridging the gap between DeFi-centric protocols and the POS chains. So there are bound to be concerns about having a third-party getting involved in the staking of assets. From the security of assets to the accuracy of transaction records, these are valid fears of many potential users. 

Fortunately, there are several measures put in place to ensure the protocol is both secure and its records are accurate. One of the ways StaFi stays secure – in the face of menacing threats occasioned by its growing workload – is the use of validators and special validators combined with the introduction of a multi-signature address. 

The validators are responsible for verifying transactions carried out on the StaFi protocol. Of course, it’s a sensitive job, so care has to be taken. Special Validators are picked from a pool of validators with criteria that are guaranteed to pick only the most worthy. 

Hard work is rewarded in more FIS earnings, the native token of the StaFi protocol. While shoddy jobs, that subject the protocol to ridicule, get severe penalties. 

Conclusion 

StaFi protocol can change the way POS chains are viewed. Not many envisaged the liquidity unlocking of POS-based protocols as a realistic feat. But it’s finally here, and it can make all the difference for the future of the POS chains.

You can read more about StaFi by visiting their website below: https://m.stafi.io/

 

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RitabeII
RitabeII

Blockchain and cryptocurrency enthusiast| Digital Content Creator| Crypto Investor| Community Manager| BRAND AMBASSADOR| Graphics Designer| Infographic Creator


Helloadaora
Helloadaora

Glad to be onboard

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