Stafi Analysis Report
Since the concept of POS (Proof-of-Stake) was put forward, its ecology and scale have been growing continuously. Now, POS has become an indispensable consensus mechanism and widely recognized in crypto world .The mainnet launch of many POS projects (such as Polkadot, Near, etc.) also marks that POS has stepped into a new stage.
About staking
All nodes in the POS mechanism participate in the consensus by staking tokens, so the verifiers in the network are also the token holders. As the value of the token is directly staked, the role of the incentive mechanism begins to manifest. For the general POS mechanism, the stakers must lock their token as collateral. In exchange, they have the right to validate blocks and get mining rewards. This process is often called staking.
Staking has become one of the most important designs of POS projects, and the essence of staking is to obtain incentive benefits by staking tokens to participate in the consensus. Consensus always needs to be stable and safe, that’s why staking requires a long locking period. However, a long locking period will cause serious problems for the wild fluctuation cryptocurrency world, which greatly dampens the enthusiasm of users to participate in staking.
Therefore, the security of POS is obtained at the expense of the liquidity of staked tokens. So is it possible to keep liquidity in a certain extent without sacrifice the security of the entire pos network? Many practitioners have made continuous efforts for this, and many projects have been born as a result.
Stafi
Introduction
Stafi allows token holders to stake their assets to generate a new token rTOKEN, that represents the stake position and can still receive a stake reward from the original chain. For example, ATOM tokens become rATOM, Polkadot DOT tokens become rDOT, so are Tezos, EOS, and other proof-of-stake networks. Their security is controlled by the Stafi protocol, which ensures that rTOKEN is the only collateral (Tezos, Cosmos, Polkadot, etc.) that can be used to redeem stake assets from the original stake blockchain.
These rTOKEN tokens are the stake certificate of the stakers, which can be traded both on the centralized and decentralized trading platform of the entire crypto ecosystem. The “rTOKEN” token itself is protected by two types of node operators: Stafi Validator (SV) and Stafi Special Validator (SSV). The SV is responsible for the security of the entire agreement, while the SSV ensures the security of all stake contracts. Like many other proof-of-stake networks, these validators need to stake original FIS tokens to participate in network voting governance.
Stafi uses the Substrate technology of Polkadot, so the Stafi protocol can build a bridge between the “second” blockchain network, while also taking advantage of the liquidity advantage of another chain.
Stafi will not only support the stake assets in stake, but also plan to develop stake assets in the lending platform in future roadmap.
FIS
FIS is the original token of the Stafi protocol, with an initial circulation of 100 million and will be issued annually in the future. For Stafi, FIS is similar to Dot to Polkadot. In Stafi, the specific functions of FIS are as follows:
1. staking
In the Stafi network, validators need to hold FIS to join in order to participate in verification, and nominators must also hold FIS to nominate.
2. Transaction fees
In order to avoid the abuse of the network, the initiator of the transaction must pay FIS to complete the transaction, so that invalid transactions can be avoided.
3. On-chain governance
FIS holders can participate in the modification of the Stafi protocol, voting for protocol upgrades, and determine the development process. Anyone can submit a proposal to the agreement, but only FIS holders can vote for or against the proposal. One FIS represents one vote.
4. Token Distribution
The total amount of initial tokens is 100 million, 5.71% will be distributed in seed round, 6.07% will be distributed in private rounds, 0.85% will be distributed in public IEO, 21.37% will be distributed to foundation, and 5% is reserved for supporting ecosystem growth , 40% will be used for community rewards, 15% will be distributed to the team, and 6% will be distributed to advisors.
The specific rules of token distribution and release are shown in the figure below:
Team
Liam Young, the founder, is an expert in product management and blockchain development. He has worked in traditional Internet companies for more than 8 years and has rich experience in product management and development . An early POS participant and active POS researcher.He wrote a book on POS called “Mastering Proof of Stake”. He is also the founder of Wetez mining pool and Wetez wallet, providing services to tens of thousands of Holders and multiple institutions.
Tore Zhang, co-founder, from Alibaba, has more than 2 years of blockchain development experience and 5 years of software development experience. He is responsible for the technical work in the Stafi project. He is the leader of a technical team with all senior talents in the computer field with more than 20 years of software development experience.
Project Analysis
Project Summary
The entry point of Stafi is excellent, because the trade-off between the liquidity of staked tokens and the security of the POS network has always been in a dilemma.
From a technical point of view, if a long locking period is not set, then the entire POS network will be faced withserious security problems and be vulnerable to various attacks.
From an economic point of view, if a large number of the tokens are locked in the stake contract, then the market liquidity of the tokens will be affected. The more tokens are staked, the better it shows that investors are optimistic about this project, but this will lead to lower liquidity of tokens in the market. If the number of tokens that can be freely circulated in the market is low, the price volatility of the tokens will be high, and the transaction slippage will increase. Therefore, some large investors may have concerns when staking their tokens.
As the DEFI ecosystem grows stronger, the ROI of DEFI is getting higher and higher, and a large number of users will face the dilemma of choosing between staking rewards and DeFi revenue. On the one hand, users who hold the tokens staked in POS for a long time cannot participate in DeFi,then they will lose short-term ultra-high returns; on the other hand, if they choose to sell the staked tokens, they will also face the trouble caused by the long locking time and the losses caused by the increasing price.
Stafi solves these problems above and allows tokens to be staked to protect network security without losing the liquidity of tokens. Stafi uses a decentralized protocol as temporary liquidity collateral, which means that users can stake tokens without relying on a third-party centralized institution, and can also trade both on the centralized and decentralized trading platform of the entire crypto ecosystem,which greatly enhances the application scenarios and liquidity of this project . So the prospects are very broad.
In terms of token distribution, the project team did not pursue high valuation, and the project valuation is reasonable. The early circulation of tokens is not very large and the tokens are released in a balanced manner, there will not be a large number of tokens in circulation at the beginning, leading to panic smashing.In addition,the team accounts for a reasonable proportion, and most of the tokens are locked, which will encourage the development of the project.
The final success of a project depends on many aspects, technology and operation are indispensable. The team behind Stafi has very rich experience and background in both technical and operational aspects. The founder Liam has a very good reputation in the industry. His previously products have also received unanimous praise from users. I believe these factors will greatly promote this project to success.
Competitor Analysis — RAMP
RAMP DEFI stakes non-ERC20 tokens to generate stablecoins, rUSD, which is then issued on Ethereum through the bridge. Users on Ethereum can mint eUSD by depositing ERC20 stablecoin in RAMP’s eUSD liquidity pool. Holders of rUSD and eUSD can freely borrow, lend or exchange rUSD/eUSD, and can also stake rUSD for liquidity mining.
Compared with Stafi, the ecology of RAMP is more complicated, requiring a lot of cross-chain work, and the technical requirements for the project team are very high. At the same time, 80% of the rewards in RAMP’s rStake pool (from staking) will be returned to the holders of rUSD , The remaining 20% is distributed to rPool, which is actually equivalent to distributing part of the staking revenue to RAMP holders, which is unfair for those who only want to participate in staking.
For Stafi, the holders of rTOKEN can be guaranteed to enjoy 100% of the staking revenue. At the same time, Stafi uses the technology of Polkadot , so Stafi users can enjoy the convenience and bonuses brought by Polkadot ecology. Currently, the Stafi mainnet has been launched, and I believe that all functions will be available soon, but RAMP has not yet been activated and lacks value support.
