What is Stader Labs?

Since Ethereum transitioned to Proof of Stake (POS) after the Merge, the Ethereum mining industry has faced challenges worldwide. Furthermore, there has been increasing scrutiny regarding the energy consumption and environmental impact of mining activities, leading to the gradual decline of Proof of Work (POW).

Subsequently, within the blockchain industry, staking nodes and liquidity staking for existing digital assets have become crucial trends. Staking has become a popular demand in the market.

An increasing number of blockchain users are joining the team of earning staking rewards through their digital assets. For them, choosing a secure and reliable Staking platform has become paramount.

Due to inherent structural flaws in centralized platforms within the blockchain industry, there are significant risks during bear markets, often resulting in platform defaults or shutdowns.

Therefore, when it comes to selecting a Staking platform, many users value the assurance that decentralized platforms offer for their digital assets. At the very least, decentralized Staking platforms can achieve complete transparency and openness.

Of course, when it comes to choosing a platform, users need to compare different platforms’ support for public chains and consider factors such as staking yield, security, and scalability of decentralized Staking platforms. Only then can they make wise investment decisions.

What is Stader Labs?

For ordinary users, when it comes to staking ETH, they usually opt for mature and well-established staking platforms like Lido. However, if one desires to engage in liquidity staking on chains such as Matic, BNB Chain, Fantom, NEAR, HBAR, etc., Stader Labs is a favorable choice.

As of now, Stader Labs has achieved a TVL (Total Value Locked) of $120.8 million on-chain and has distributed rewards exceeding $20 million, with tens of thousands of users participating in staking activities on the platform.

In essence, Stader Labs is a decentralized multi-chain liquidity staking platform that enables third parties to build custom solutions through modular smart contracts effortlessly. Currently, Stader has launched liquidity staking on chains such as Hedera, Polygon, BNB Chain, Fantom, NEAR, and Terra 2.0. Users can stake relevant tokens on Stader Labs and earn profits.

In the future, Stader Labs plans to expand its staking services to Ethereum, Avalanche, Solana, and Aptos, among other public chains. By expanding to multiple chains, Stader Labs aims to provide low-barrier liquidity staking services to a broader user base and help users enhance capital efficiency.

Since its launch, Stader Labs has garnered attention and favor from institutions, raising a total of $16.5 million in funding. Stader Labs has also launched on Coinlist and conducted public sales, capturing the attention and sparking discussions throughout the industry in 2022.

Stader Yield from Staking

Stader Labs has become the largest decentralized liquidity staking platform on the Hedera network. Since August 2022, it has been providing liquidity staking solutions for the BNB Chain and has grown to become one of the top three staking platforms on the BNB Chain, enjoying widespread adoption.

The liquidity staking solution offered by Stader Labs on the BNB Chain allows users to stake BNB and receive an equivalent amount of BNBx liquidity tokens. Stader Labs also collaborates with DeFi projects on the BNB Chain, enabling BNBx to interact with multiple DeFi protocols within the BNB Chain ecosystem.

（Image source:staderlabs.com）

When users stake BNB on the Stader Labs platform, the smart contract mints and provides them with the corresponding BNBx tokens. Stader Labs then stakes the users’ staked BNB through network validation to generate corresponding yields. These yields are pooled and added to the staked funds, thereby increasing the value and share of the users’ staked BNBx tokens.

Unlike centralized staking methods, Stader Labs operates within smart contracts, allowing users to have complete control over their funds without requiring any permission.

Following decentralized governance principles, Stader Labs selects its nodes through a publicly accessible decentralized governance list, ensuring complete transparency of users’ digital assets.

Regarding concerns about malicious activities, Stader Labs’ adoption of decentralized transparent nodes and asset visibility allows all node and account information to be queried through on-chain tools. This effectively serves as a form of supervision. With the decentralized and transparent nature, combined with the platform’s scrutiny mechanism, there is no possibility of users exploiting nodes for malicious purposes.

Furthermore, there have been no instances of the Stader Labs team leveraging the platform for related operations.

After pooling the BNB staked by users, Stader Labs optimally stakes it with validator nodes to generate maximum yields. Compared to other liquidity staking projects, Stader Labs has certain advantages in its staking solution, which is a crucial factor in its rapid growth and user accumulation.

Advantages and Security Strategies of Stader’s Staking

Stader Labs’ liquidity staking solution offers several advantages over other staking platforms in the following aspects:

• Reinvestment Strategy: Compared to manual reinvestment, Stader Labs reduces operational costs. Normally, the staking yield for BNB is around 4%, but with the reinvestment strategy, Stader Labs can provide users with a yield of over 10%.
• Validator Staking Allocation Adjustment: Stader Labs has strict requirements for validators, including a minimum staking period of 180 days, a commission rate of less than 10%, a validator APR greater than 5%, and a self-held amount greater than 11,000 BNB. Once the validators are selected, Stader Labs monitors their operational parameters in real-time and adjusts the BNB allocation proportion to maximize the balance between returns and risks, achieving a balanced state that helps users manage their staked assets. This approach is similar to the model used in fund sales, reducing the potential risks associated with individual targets.
• Instant Liquidity: Users can freely transfer or sell cryptocurrencies with staking rights such as BNBx, NEARx, and Maticx to obtain ample liquidity. BNBx is a reward-bearing liquid token, enabling the full utilization of asset liquidity for participants in Staking.
• More DeFi Features and Scenarios: Stader Labs collaborates with multiple DeFi platforms, providing users with more liquidity mining protocols to further enhance staking returns.

BNBx can also be used in various DeFi strategies, such as directly staking BNBx or forming LP (liquidity provider) pairs with BNB, like BNBx-BNB LP. Due to the minimal price fluctuations of this LP, stable returns can be achieved. Additionally, users can deposit BNBx-BNB LP into the VBault treasury to continuously earn corresponding profits.

Furthermore, BNBx can be utilized in combination with leveraged staking on Open Leverage or options such as DeltaTheta, although this entails increased risks and rewards.

In summary, participating in Staking on Stader Labs not only unlocks user liquidity but also enables additional income through integration with DeFi protocols.

When utilizing BNBx for coin savings and financial services, users can form LP pairs with other cryptocurrencies for liquidity mining or participate in leveraged mining to further boost the yield rate. Maximizing the flexibility and versatility of BNBx’s application scenarios is currently one of the greatest advantages of Stader Labs.

As a result, Stader Labs garnered market attention immediately after launching on the BNB Chain, with a Total Value Locked (TVL) reaching $3 million on the first day alone.

Regarding returns, DeFi yields supported by BNBx significantly outperform regular DeFi strategies. Additionally, Stader Labs supports various DeFi participation methods, including lending and leveraged mining, allowing users to achieve maximized returns within a low-risk range.

In terms of security strategies, Stader Labs mitigates the risk of private key exposure through measures such as multi-signature mechanisms. The platform’s code has also undergone audits by Halborn and PeckShield, and Stader Labs collaborates with multiple security companies to ensure its day-to-day operations.

Following the NEAR incident, Stader Labs further increased security reviews of contract codes and conducted multiple new audits, continuously enhancing the security of smart contracts. They also strengthened on-chain monitoring, integrated faster response capabilities, and increased the bounty program rewards for vulnerabilities, all aimed at ensuring the security of users’ assets.

Stader Labs has indeed made considerable efforts regarding advantages and security strategies.

Stader’s Multi-Chain Deployment

（Image source:staderlabs.com）

Stader Labs has created an intermediate infrastructure for Staking by supporting multichains, scalability, and providing liquidity assets. This business model encompasses the token staking for various ecosystem projects supporting multiple public chains. This approach not only enhances users’ Staking rewards but also enables the platform itself to explore new values.

Furthermore, Stader Labs has achieved decentralization of Proof of Stake (POS) networks through this approach. After the Ethereum Merge, the dominance of Lido staking nodes exceeded 30%, and similar issues were faced by other POS networks as well. Therefore, achieving decentralization of POS networks has become a development goal for many Staking platforms.

Stader Labs optimizes the node quality and reduces network centralization to a certain extent by adjusting the staking amount ratio based on staker operational parameters.

This is highly advantageous for blockchain networks. If Stader Labs can support other public chains such as Ethereum in the future, the distribution of network validator nodes will become more balanced. There will be significant changes in the landscape of Staking platforms, whether it is a centralized or decentralized approach. This holds profound significance for the security, stability, and censorship resistance of blockchain technology and the cryptocurrency industry.

In terms of the staking design associated with Layer 1, Stader Labs supports various blockchains such as ETH, BNB, MATIC, and more. Their staking design primarily manifests at the network and data layers.

Stader Labs provides corresponding staking tokens, such as ETHx, BNBx, etc., to users on different blockchains, adopting a unified design for liquidity staking. The differences lie in the data and interest rate aspects, which depend on the anchoring currency. The naming conventions for staking designs on different blockchains may vary, but they all adhere to a unified and subdivided principle, following the characteristics of their respective networks.

Stader Labs Token SD

While the act of issuing governance tokens by staking platforms in the blockchain industry is primarily aimed at providing long-term development support for the platform itself, there also exists a focus on raising funds for the platform through this method.

In the first and second quarters of 2022, Stader Labs conducted platform token SD issuance to the public through auctions. Following the conclusion of the sale, the platform introduced a delegated governance plan, incorporating elements such as DAO and foundations to facilitate comprehensive governance.

（Image source:staderlabs.com）

Currently, the application of SD has not been extensively deployed. According to the official roadmap, the token itself will distribute commissions based on the distribution of holders, with 10-20% allocated to the committee, elected by token holders. Additionally, there will be certain earnings derived from reward strategy commissions. In the subsequent introduction of SD Staking, a 5-10% staking commission will be rewarded.

The total supply of SD will be 150 million tokens, and the unlocking schedule will progress according to the timeframes and distribution outlined in the official whitepaper.

（Image source:staderlabs.com）

Conclusion

With Staking becoming a new trend in the blockchain industry, various platforms have emerged and provided their liquidity staking solutions. Essentially, this represents the competition among different platforms in specialized technical fields.

Whoever can support more blockchain ecosystems, offer more diverse and high-yield DeFi strategies, and introduce more secure composability protocols will be able to attract users and gain market recognition quickly.

Stader Labs has achieved remarkable results in these aspects, and with the subsequent integration and expansion of its ecosystem, it is bound to attract more attention from investors and users.