Stader has introduced a new liquid solution to take on the issue of evaluating 21 validators on the BNB Chain. The solution takes the BNB Chain ecosystem to the next level.
The functioning of Stader is simple. Users stake the token – BNB – with Stader to receive BNBx. BNBx is a synthetic token generated by Stader to offer liquidity to the holder. Stader then pools all the BNB together and balances diversification, fee, & APR by staking BNB to validator nodes.
A reward is generated every time a pool is staked to nodes, and this reward is added back to the pool to increase the value of BNBx in terms of BNB.
By introducing this new liquid solution on the BNB Chain, Stader looks to resolve an issue that users have long reported. The current staking system is relatively flawed, and many processes have to be done manually, creating slight confusion in the community.
The current staking system requires users to evaluate the validator themselves based on the limited information, and the stake has to be managed manually along with its rebalance.
DeFi opportunities are lost more often as stakes are immediately locked. Lack of liquidity takes away the chances that could otherwise be offered to users for grabbing decent returns on their holdings.
Many advantages work in its favor in addition to Stader resolving these issues.
- Value is automatically compounded without users having to tap anywhere on the screen. The generated rewards are reinvested back in the validators, something that does not happen in the current staking system of the BNB Chain.
- Liquidity remains intact, and users are instantly given BNBx in return for BNB staked by them. The liquid token, representing a portion of the stake pool, can be transferred or sold.
- There is no requirement to monitor and manage validators manually, and Stader takes care of that process on their behalf. It gives users a balance between diversification and APR. Factors that Stader monitors are slashing history, uptime, APR, and fee, to mention a few.
- The door to participate in yield farming is not missed, courtesy of the liquidity provided by Stader. Users can earn returns based on the level of risk they are willing to take. For instance, users can stake BNB with a lower-risk option to generate a return of 8-10%. The rate of return for medium-risk levels and high-risk levels is 14-16% and 20%, respectively. These figures are subject to change based on the market condition.
Stader plans to make the experience of liquidity much better also by partnering with major DeFi protocols on the BNB Chain. Users who participate in a protocol would have a higher yield on their BNB token.
Stader shared the update through its official blog post, where it also announced special incentives and extra returns for the alpha community, with three winners standing a chance to win $500, $300, and $200.