In previous articles, we covered the liquid staking sector and also Lido Finance, which represents one of the hyped narratives of 2023 and we believe it will continue to grow alongside the Ethereum blockchain and capital staked.
Today, our focus shifts to Stader Labs, a project also dedicated to liquid staking. Stader Labs has its own native token, SD, which is whitelisted here on Kassandra.
What is Stader?
Stader is a non-custodial smart contract-based liquid staking platform. It simplifies staking by allowing users to mint tokens representing their staked assets, enabling growth in value through staking rewards.
What sets Stader apart from traditional staking is its dual function: users both secure PoS networks through staking and access DeFi opportunities with the same assets. This innovative approach empowers retail crypto users, exchanges, and custodians by providing a seamless bridge between traditional staking and the dynamic world of decentralized finance, making it easier than ever to participate in both.
At present, Stader is operational on a diverse range of blockchains, including Ethereum, Polygon, Hedera, BNB Chain, Fantom, NEAR, and Terra 2.0. Each blockchain boasts its corresponding liquid staking tokens: ETHx, MATICx, HBARx, sFTMx, NEARx, and LUNAx.
As of the latest data, Stader boasts a total value locked (TVL) of approximately $118 million, with Polygon and Hedera emerging as the dominant chains in terms of TVL.
How does Stader Work?
As we’ve stated in the introduction, we have written an article here explaining better the Liquid Staking sector, but the main difference when comparing Stader with Lido, for example, is Stader’s dominance in other chains, such as Polygon and Hedera.
Furthermore, the operation of liquid staking tokens on Stader diverges from the conventional stETH on Lido. These tokens serve as reward-bearing assets, whereby staking rewards are harnessed to enhance the token's value, thereby ensuring its sustained premium over the base token.
The SD token, Stader's native digital asset, boasts a straightforward structure with a total supply capped at 150 million tokens, ensuring their relative scarcity.
Here's a succinct breakdown of the SD token's utility:
Governance Influence: SD token holders wield governance power, participating in vital decisions surrounding the Stader protocol. This encompasses matters like reward distribution, validator selection criteria, and the strategic growth of the protocol.
Staking for Rewards: Holding SD tokens opens the door to staking, a process where participants can lock up their tokens and, contingent on governance approval, share in the protocol's fee proceeds. This incentivizes active contributions to Stader's success.
Liquidity Mining Opportunities: Those inclined towards deeper involvement can engage in liquidity mining by providing SD token liquidity on specific decentralized exchanges. Rewards are attainable, subject to governance endorsement, augmenting token liquidity, and incentivizing ecosystem liquidity providers.
Preferential Delegations: The quantity of SD tokens staked plays a pivotal role in determining preferential delegations to validators within the network. A larger stake translates into greater influence, promoting long-term commitment and participation, and fortifying the protocol's stability.
As of now, only 19% of the 150 Million tokens are in circulation, which should be carefully considered when studying the token as a possible investment.
Additionally, the token distribution is the following:
Although not holding the title of the liquid staking sector leader or pioneer, Stader represents a serious project that has for sure attracted a lot of capital, being one of the biggest protocols on Polygon and Hedera.
If you’d like to have some exposure to it as an alternative liquid staking platform and diversify your portfolio, feel free to explore the managed pools available on Kassandra or even create your own!
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