Liquid Staking (Fantom) Key Points
- Liquid Staking on Fantom enables users to earn staking rewards while still having the flexibility to use their staked assets.
- This innovative approach to staking addresses the illiquidity issue associated with traditional staking methods.
- By staking their FTM tokens, users receive a derivative token called sFTM, which represents their stake and earned rewards.
- sFTM tokens can be used within the Fantom ecosystem, enhancing liquidity and DeFi participation.
- Liquid staking enhances the security of the Fantom network by encouraging more users to stake their tokens.
Liquid Staking (Fantom) Definition
Liquid Staking on Fantom is a protocol that allows Fantom users to stake their FTM tokens, receive a derivative token (sFTM) in return, and still maintain the liquidity of their staked assets. This mechanism allows users to participate in the network’s security, earn staking rewards, and simultaneously use their tokens within the ecosystem.
What is Liquid Staking (Fantom)?
Liquid staking is an innovative solution that addresses the illiquidity problem associated with traditional staking. In the Fantom network, users can stake their FTM tokens and receive an equivalent amount of sFTM tokens. These sFTM tokens represent the user’s stake and the rewards they earn from staking. The key feature of liquid staking is that these sFTM tokens can be traded, lent, or used as collateral in the DeFi ecosystem, thereby maintaining the liquidity of the staked assets.
Unlike traditional staking where staked assets are locked and cannot be used, liquid staking offers the flexibility to users to continue utilizing their assets while also securing the network and earning rewards.
Who can use Liquid Staking (Fantom)?
Any user of the Fantom network can use liquid staking. This includes individual token holders, institutional investors, and DeFi developers. By staking their FTM tokens, these users can receive sFTM tokens which they can use within the Fantom DeFi ecosystem.
In addition, the protocol can also benefit those who want to participate in consensus, earn staking rewards, and simultaneously maintain the liquidity of their staked assets.
When was Liquid Staking (Fantom) introduced?
Fantom introduced liquid staking as a feature of its network to improve the flexibility and liquidity of staked assets. However, the exact date of introduction is not specified.
Where can Liquid Staking (Fantom) be used?
Liquid staking can be used within the Fantom DeFi ecosystem. The sFTM tokens received in return for staking FTM can be traded, used as collateral, or lent within this ecosystem.
Why is Liquid Staking (Fantom) important?
Liquid staking is important because it addresses the illiquidity issue associated with traditional staking. By enabling users to use their staked assets within the DeFi ecosystem, it encourages more participation in staking, thereby enhancing the security of the Fantom network.
In addition, by allowing users to earn rewards and maintain the liquidity of their assets, it also increases the attractiveness of staking and the overall utility of the FTM token.
How does Liquid Staking (Fantom) work?
When a user stakes their FTM tokens in the Fantom network, they receive an equivalent amount of sFTM tokens. These sFTM tokens represent the user’s stake and the rewards they earn from staking. Users can then use these sFTM tokens within the Fantom DeFi ecosystem – they can trade them, use them as collateral, or lend them.
Thus, even while their original FTM tokens are locked in staking, users still have the flexibility to use their staked assets through the derivative sFTM tokens. This mechanism enhances both network security and user participation in the DeFi ecosystem.
