What are Liquid Staking Tokens? (stATOM, stOSMO)
What is Liquid Staking?
We all have some assets. And what do we need these assets to do? We need them not only just be there, but also to work for us and our needs. Isn’t it so?
Liquid staking is a great substitute for traditional Staking. It provides flexibility and a larger ratio. Particularly, it allows users to access their assets while still enjoying the benefits of staking their tokens.
What are Liquid Staking Tokens?
Liquid Staking Tokens (Derivatives) denote staked assets of the Token holder. They verify user’s participation in the Staking Pool, and can be used for trading, lending and collateral.
As the Official Twitter of Stride says, “On the 2 DeFi platforms — Umee and Kujira — there’s currently $3.1M worth of $ATOM deposited”. Well, quite an amount just to stay there with no purpose. What if I say that $626,600 from this amount is being lost? These could be the Staking Rewards per year.
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There is an excellent solution to this issue — collateralization plus ongoing Staking Rewards with stTokens! stATOM, and stOSMO — are the ones that you can benefit from! Moreover, according to Umee’s January report, their Total Liquidity (TL) has reached $5M, and it is one of the fastest-growing blockchains in the Cosmos ecosystem!
What are stATOM and stOSMO?
stATOM and stOSMO are LSD, which stands for Liquid Staking Derivatives. Using these derivatives, you turn your Tokens into stTokens in order to use them simultaneously and earn staking yield and DeFi yield.
It is not required for users to stake their assets for compensation of the chain protection and the possibility to participate in governance.
Now that both stATOM and stOSMO are just about to be added to Umee Money Market, you can be one of the early birds to try on all the advantages of stTokens!
How does it work?
Well, the Stride platform has its own ways of doing this! On this platform, you can stake your tokens from any Cosmos chain (Umee, in our case).
You will be able to see your rewards and constantly collect them with no minimum amount. Therefore, while you stake your usual Tokens, you receive stTokens instead. And yes, you can still use stTokens for trading!
Moreover, the great news is that you can redeem your original Tokens whenever is clever!
Conclusion
Nowadays, derivatives are broadly used in the DeFi and financial section in general. You can say that these are just “contracts between two entities”. Ups and downs of the asset value determine the price of these derivatives. Liquid staking derivatives utilize tokenization for users to benefit from them while also enjoying the benefits of staking their tokens. These rewards are similar to the native staking rewards. However, you can use your stTokens throughout DeFi.
Enjoy all the advantages of Liquid Staking Tokens with Umee and Stride!
