What is Liquid Staking and How Can it Improve the DeFi Ecosystem?

January 15th 2021

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There’s no doubt that decentralized finance - or DeFi, as it’s popularly known - is far ahead of the centralized financial ecosystem we live in today. Its integrity and reliability are way more than that of centralized finance, and its ability to generate returns on investments is also way higher. These are precisely the reasons why DeFi adoption has been rising steadily for the last few years.

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However, at the same time, there are also some inherent shortcomings in the DeFi ecosystem. These shortcomings are deep-rooted into the algorithms that are used to drive this economy of smart contracts.

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One such shortcoming is the inability to generate any returns on staked assets.

But as time is passing new solutions are emerging to fix every shortcoming of this ecosystem, and Liquid Staking is also among them.

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In current scenarios, there are upcoming DeFi projects based on ERC20 rolling out in the industry. Henceforth, exploring such challenging projects in detail would add vast information to the readers’ knowledge base. 

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Liquid Staking: What is it and why is it getting popular?

Traditionally, staking in PoS protocol based projects has been about locking one’s assets in one project for a long time and expecting a fixed, predetermined staking reward in return. While it guarantees the return on staked assets much like a bond, it also limits the opportunities of generating higher returns on those assets from the DeFi ecosystem.

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If you’ve staked all of your crypto holdings, you’re essentially in a liquidity crisis and you can’t invest or trade-in more profitable crypto pairs on exchanges.

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Liquid staking has emerged as a solution to this problem.

As its name suggests, it allows using the staked crypto assets in other trading or investing opportunities to let you get the best of both worlds - a reward on your staked assets, as well as the returns from new trading/investing opportunities that you spot. It does so by tokenizing the stakes, so the stakeholders can use them as collateral in other financial applications. Tokenized stakes, sometimes also known as staking derivatives, can be traded freely among users, locations, and even blockchains. 

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That’s the reason why Liquid Staking has been gaining a lot of popularity in recent days. A number of new projects with this feature are coming out in the DeFi ecosystem, and crypto holders are also taking interest in them to monetize their stakes. Here we’re going to discuss one such project which has been gaining a lot of traction recently.

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TosDis Finance - A new Liquid Staking protocol revolutionizing DeFi

TosDis stands for The One Stop Defi Interoperable Solution. The project aims to revolutionize the DeFi ecosystem by allowing people to monetize their staked assets and generate maximum possible returns through any of their desired opportunities. They’ve developed a number of platforms for the purpose, and we’re going to take a look at all of them below.

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#1. EasyStake: Staking as a Service

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The main offering of the TosDis team is the EasyStake platform, which supports all ERC20 projects and allows liquid staking in all of them. Whenever someone stakes any ERC20 asset through the EasyStake platform, they receive an asset-backed token in the ratio of 1:1 that can be used as collateral to invest or trade in other assets at any platform of their choice. All ERC20 projects - whether existing or upcoming - can interact with the TosDis Master Contract to make this possible. 

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#2. Yield Farming as a Service

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TosDis is not offering liquid staking service alone - it’ll also allow crypto projects to offer liquidity mining service to their holders with the help of its Yield Farming as a Service feature. Anyone can earn yields by mining the ERC20 tokens available on the EasyStake platform. The best part is that TosDis will be providing this functionality at a very reasonable cost, thus putting it in the reach of every interested crypto miner and all ERC20 DeFi projects. 

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#3. TOSDEX: A new decentralized crypto exchange

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To provide its users as many return-generation opportunities as possible TosDis is also working on its own decentralized exchange that will provide advanced trading features like stop-loss and take-profit orders from day one. Implementing these features has turned out to be an expensive exercise in existing ERC20 blockchains, which is why they’re not found in the majority of crypto exchanges at the moment. TosDis wants to offer them from the very beginning of its decentralized exchange, TosDEX. 

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#4. Barter Platform

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This will be a global p2p lending and borrowing marketplace enabled by TosDis, which will provide people fast and convenient access to loans and crypto holders another opportunity to generate returns on their holdings/stakes. Since the platform is based on Ethereum smart contracts, the entire process of borrowing and lending remains automated and uncompromised, unlike traditional finance where there always remains the possibility of human error and corruption. 

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Final Thoughts on Liquid Staking

Liquid Staking and Liquidity Mining are the future of decentralized finance, and TosDis has realized that very well. As a result, their EasyStake platform has the potential to put the DeFi ecosystem ahead of the traditional finance ecosystem, where a lot of times it becomes difficult if not impossible to collateralize the money locked in deposits, bonds, and other fixed financial instruments. Therefore, TosDis can have a huge impact on the adoption of DeFi products, which makes it one of the most important DeFi projects ever.

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Now it’ll be interesting to see how it moves ahead with its scheduled rollout of DEX and other offerings to create a full-fledged environment of opportunities for its users.

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