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Polkadot is introducing liquid staking to its network of blockchains, enabling cryptocurrency owners who are committed to supporting the proof-of-stake (PoS) network an avenue to boost their revenue streams through earning additional yield in decentralized finance (DeFi) applications.
A connectivity layer between the Ethereum blockchain and services being built on Polkadot, Moonbeam has collaborated with a staking derivatives platform, Lido, that enables cryptocurrencies, including ETH, locked up in staking contracts to be used elsewhere.
This step to introduce the liquid staking of Lido to Polkadot was also initiated by MixBytes, an auditing and staking specialist, the firm revealed on Tuesday. In February, the same group disclosed liquid staking on Kusama, the canary network of Polkadot, and an experimental version of the blockchain.
Digital asset owners who pledged to support proof-of-stake networks by rendering their tokens to the process under liquid staking will get a kind of staked IOU token. The owners can use the token to invest in DeFi apps to earn yield.
The Lido integration will allow the holders of DOT, the native cryptocurrency of Polkadot, to stake their assets in the form of xcDOT (cross-chain DOT); in return, they will be receiving a stDOT (staked DOT). Both stDOT and xcDOT are XC-20 tokens, a token standard built by Moonbeam for compatibility between the Substrate framework that runs Polkadot and the Ethereum Virtual Machine (EVM).
Following the funding of more than $1.3 billion for securing a para chain slot on Polkadot, Moonbeam went live in January. Derek Yoo, the CEO of the platform, explains that the team bought together the necessary infrastructure and tools required for harmonizing activity across several blockchains.
Yoo further explains that in the backend, the specialized components are being integrated to build one simple application for the user. “Apps will be developed with multiple specialized chains, but simultaneously the complexity will be hidden away,” he added.
Konstantin Lomashuk, the founding member of Lido, believes that for the team to be able to build liquid staking on any chain was partly the reason behind Lido’s concept as a decentralized autonomous organization (DAO).
ALSO READ: Cardano Replaces Ripple As The sixth-largest Cryptocurrency Amid Crypto Boost.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
