pSTAKE allows PoS token holders to securely stake their network tokens through the pSTAKE App to earn commitment rewards while simultaneously receiving 1:1 linked stkTOKEN, representing compromised tokens on the Ethereum network, that can be used in the Ethereum DeFi ecosystem system.
In this article, we will discuss indepth; the design of pSTAKE and how pSTAKE aims to unlock the liquidity of some of the most famous PoS network tokens, so that pSTAKE users can generate additional performance in addition to the betting rewards of the network.
What is peculiar about pSTAKE?
Most people who are interested in PoS-based tokens believe in the long-term vision of these projects. It has been determined that gambling is more beneficial than just owning tokens; HODLers are constantly being diluted because new tokens are introduced into supply through block rewards allocated to mortgagers, essentially rewarding them for protecting the network. However, this long-term belief comes at the expense of liquidity.
Betting positions are inherently illiquid. Although stakeholders earn block rewards (usually called mortgage rewards) by participating in chain consensus and governance to provide network security, stakeholders cannot use their mortgaged assets for any other purpose because they are locked into the net. This is where the need for pSTAKE comes in. pSTAKE creates liquid pledged positions by issuing 1:1 tied proxies with pledged assets of its users. These committed representative tokens can then be used in various DeFi applications to generate additional revenue.
Key Components of pStake
It is necessary to understand the key components of pSTAKE and why these components are so important. pSTAKE has two main components: pBridge and pSTAKE smart contract:
pBridge: This is a bridge between Ethereum and the pSTAKE-compliant PoS network. pBridge can be used to create a 1:1 linked ERC-20 bundle of unsecured PoS token representatives and mortgage the PoS tokens locked onto the bridge. pBridge is a multi-party calculation-based bridge, protected by some of the top verifiers in the proof-of-stake ecosystem.
pStake Smart Contract: The pSTAKE smart contract on the Ethereum blockchain is responsible for minting and issuing packing tokens (wTOKEN) and commitment representation tokens (pTOKEN).
Features and Functionalities of pStake.
Fungibility
The pTOKEN issued is essentially interchangeable. In order to achieve this fungibility, assets on the PoS network are delegated according to a predetermined ratio through a group of whitelisted verifiers. The share allocation ratio is initially determined by the pSTAKE team, and then managed by pSTAKE government token holders. The log risk in the ecosystem is shared by all pTOKEN holders. However, by distributing delegation among multiple verifiers, the risk of haircuts is greatly reduced.Composability
As earlier stated, pSTAKE’s dual token model allows pSTAKE’s pTOKEN to be used across all kinds of DeFi protocols, including DEX, lending platforms, revenue optimization protocols, etc. The pTOKEN balance will not continually change with the accumulation of wagering rewards, so it can be compatible with most DEXs that require a constant balance token model.Governance
pSTAKE will be managed by all its stakeholders, who will determine various parameters, such as rates, greater support for other chains, white list of validators for delegation, pBridge validators, etc.
Conclusion
In conclusion, Persistence, an interoperable protocol that launched pStake, has said that the long-term goal of pSTAKE is to have a multi-chain product where assets can be issued on multiple liquid and mature chains. This includes issuing assets on the Persistence blockchain itself. There are numerous benefits of pStake to users one of which is the unlocking of the liquidation of staked assets.
In addition to connecting traditional finance and DeFi, you can also create innovative solutions to expand the field of DeFi and NFT. The overall objective of pSTAKE is not limited to the issuance of representative pledged tokens, but also aims to promote the adoption of these assets and make these assets accepted by various DeFi agreements, thus expanding the range of ways for users to of pSTAKE generate income.