BNB Chain Spotlight: pSTAKE

Today we are excited to present an innovative liquid staking protocol on BNB Chain, pSTAKE, which has recently made a strategic partnership with Binance Lab to develop liquid staking for BNB.

Enjoy our interview with the pSTAKE team below.

1. It's great to do the interview with you, pSTAKE. As this is your first time under the Spotlight, let's start with a brief introduction. Tell us what you do and what's unique about pSTAKE?

pSTAKE is a multi-chain liquid staking protocol that unlocks the liquidity of PoS assets by issuing staked representative tokens against users’ bonded assets, allowing them to earn DeFi yields on top of staking rewards. pSTAKE’s liquid staking solution is live on 3 chains, namely Cosmos, Ethereum, and Persistence. Liquid staking support for BNB is expected to go live soon with the contract currently undergoing security audits. Additionally, pSTAKE is in the process of developing liquid staking solutions for other leading assets in the industry.

2. Can we talk about pSTAKE's stkBNB token model?

pSTAKE’s BNB liquid staking solution allows holders of BNB to stake their assets using the pSTAKE staking interface. Users are then issued stkBNB, which follows an exchange rate model, inspired by Compound’s cToken model. The value of stkBNB will keep increasing against BNB as it accrues staking rewards, which are auto-compounded in the background and will be reflected in the exchange rate (c-value) of stkBNB to BNB. While earning staking rewards and thereby keeping the protocol secure, users can simultaneously use their tokens in DeFi, especially in new use cases brought by yield-bearing tokens such as cross-chain staked assets exchanges, borrowing/lending of staked assets, index-products, and self-repaying loans.

The stkBNB token is both BEP-20 and BEP-2 compatible. The token follows the ERC-777 standards to ensure easier integrations with other protocols.

3. Tell us something about your team's background.

pSTAKE is the flagship product built by the Persistence team. We are one of the earliest adopters of Proof-of-Stake and have been building in the Cosmos ecosystem since 2019 (BNB Beacon chain is also built using the Cosmos SDK). We participated in the first ever PoS incentivised testnet (Game of Stakes), launch of the Cosmos Hub, and initial testnet for Inter-Blockchain Communication (Game of Zones).

At Persistence, we launched our validator arm, AUDIT.one, in 2020. AUDIT.one currently supports 20+ networks and helped launch 7 of them. With 26 networks and $600M+ in assets under delegation, AUDIT.one is the one of the largest validators in South Asia.

In 2020, Persistence launched a stakedrop campaign to distribute XPRT (Persistence's native token) to stakers of certain assets. Through its huge traction, we discovered the large untapped demand for stakers to generate additional yield beyond staking rewards, which led to the ideation of the liquid staking protocol - pSTAKE.

pSTAKE’s testnet was launched in June 2021. Using pSTAKE to first support the Cosmos ecosystem was a natural choice for the team, as Cosmos offers a first-mover advantage for the protocol. The team has since launched liquid staking solutionss for ATOM (stkATOM), Persistence (stkXPRT), and Ethereum (stkETH), with Binance (stkBNB) and many more coming soon. Check out a thread on our journey from our founder Tushar Aggarwal and recent statistics and key updates on pSTAKE here.

4. pSTAKE will launch BNB liquid staking soon - what great news! Can we talk about the positive effects it could bring to the community?

Users in Delegated Proof of Stake (DPoS) chains, such as the BNB Chain, stake their assets to ensure high network security. A higher staking ratio is critical to ensure a high cost of attack on the chain. However, users often face the tradeoff between staking their assets to ensure security of the chain or using the chain’s native asset in DeFi, which usually earns better rewards, albeit at a higher risk. Liquid staking solves this dilemma for users by issuing them a staked representative of the native token that can be used in DeFi while earning staking rewards in the background.

pSTAKE aims to unlock liquid staking functionality for the BNB community and supercharge the growth of the BNB Chain ecosystem. Our BNB liquid staking solution will open the door to new use cases and opportunities for BNB ecosystem participants, providing the best of both worlds when it comes to yield generation and utility. Below are some of the benefits to our user community:

• Staking directly on the native chain requires a minimum of 1 BNB. However, with pSTAKE, this barrier is removed. Users can stake any non-zero amount of BNB on pSTAKE. The underlying staked BNB are then delegated to a trusted set of secure, high-yield generating validators to optimise user rewards.
• When unstaking their BNB, users have to wait for the 7-day unbonding period before the asset becomes liquid and ready-to-use. However, by staking their BNB via pSTAKE, users receive instant liquidity on their staking position in the form of stkBNB. pSTAKE’s stkBNB will have pools with BNB and other assets in the future, making it easy for users to swap their stkBNB for BNB at anytime, thus bypassing the unbonding period and providing unparalleled flexibility.
• With stkBNB, users have the opportunity to earn higher yields generated across integrated BNB Chain DeFi applications in addition to staking rewards, versus only receiving one passive income stream from traditional staking.
• With on-chain staking, rewards compounding isn’t available until the total accumulated rewards earned exceeds 1 BNB (i.e. the minimum stake amount). However, pSTAKE allows users to automatically compound their staking yields so that users continue to maximize their capital efficiency completely and seamlessly.

5. What is pSTAKE’s roadmap?

Here’s what the stkBNB roadmap will look like:

1. Launch of v1 with a high priority on security

1. Security audits conducted by Halborn, Peckshield, and Certora
2. Strong monitoring of on-chain activities with Forta
3. Bug bounty post-launch with Immunefi
   

2. Integrations

1. With wallet service providers to ensure users can stake with their preferred wallets
2. With other major BNB chain ecosystem DeFi applications for use-cases such as borrowing/lending, yield optimizing, etc.

3. Working on v2 and subsequent versions to add more features, improve the user experience, increase decentralization of the product, and implement better delegation strategies to give users the best yields with the highest security

6. What is pSTAKE’s security strategy?

pSTAKE takes a security-first approach with all its product launches and has previously been audited by some of the best blockchain security firms in the space for its liquid staking solutions for Ethereum, Cosmos and Persistence. pSTAKE’s ATOM and XPRT liquid staking solutions have been audited by the likes of Trail of Bits and Consensus, alongisde other auditors. Access the full reports: https://github.com/persistenceOne/pStake-auditReports

Similarly, the plan for stkBNB is to get as many eyes looking through the codebase as possible. Efforts around ensuring the security of stkBNB smart contracts are as follows:

• stkBNB smart contracts have already been audited by PeckShield
• The product is currently being audited by Halborn
• We have partnered with Certora for auditing the most critical smart contracts and monitoring smart contracts through its best-in-class formal verification rules
• The product is being integrated with Forta for on-chain tracking of malicious activities, which will be in place before the mainnet launch
• A bug bounty program with Immunefi will be launched to ensure that the protocol is safe from any possible exploits
• Once live, we will continue to get top-tier auditors to look at the code and help us increase the security of the product

7. What are your strategies to survive throughout the bear market?

pSTAKE is in a very strong financial position to see through this bear market and subsequent market downturn cycles. We have raised more than $20M+ across our fundraising rounds (Strategic and Public). We also recently raised a strategic investment from Binance Labs to ensure that the team can be expanded even in these market conditions.

We believe that “heads down and build” is the best bear market strategy. We will keep on building secure products, establishing strong relationships with other builders and protocols, and working on integrations and use cases by engaging with our communities. We expect to be in a position where the protocol generates strong revenues in the longer term to succeed and be a prominent player in the liquid staking space.

8. Where do you see DeFi in five years?

It is tough to say where DeFi is headed, but that is exactly the beauty of this space. There are so many possibilities on future innovations where trying to predict what the future will look like is, at some level, an injustice to what pSTAKE is here to do - experiment and build applications that people never thought of before.

The increasing adoption of PoS leads to a dilemma between earning DeFi rewards and staking to secure the underlying network, which hinders DeFi growth. With PoS becoming the default Sybil resistance mechanism of the space, the next phase of growth for DeFi comes through liquid staking where protocols are able to solve this dilemma.

We will also see more efficient products being built in the future. In this DeFi journey, we started with simple borrowing/lending protocols a few years ago like Aave and Compound, and now we are seeing developers building iterations to make it more efficient and manage risks more effectively. This will continue to happen with builders innovating and building the next leg of DeFi protocols and tackling issues such as MEV, liquid staking, and so on.

9. And the final question: What does the future hold for pSTAKE?

pSTAKE is committed to constantly bringing liquid staking innovation to popular PoS chains and DeFi ecosystems. pSTAKE is leading the charge and already beginning to gain traction. The rise in pSTAKE’s adoption is a testament to the demand from stakers to unlock additional yield in DeFi.

ATOM, XPRT, and ETH liquid staking are already live on mainnet. stkASSET utility is growing, and further integrations are coming from both within and outside of the Persistence ecosystem that will open the door for more DeFi opportunities. Moreover, the team is in the process of exploring and implementing new stkASSETs.

We plan to put extreme emphasis on BNB Chain and aim to become the #1 liquid staking protocol within the ecosystem. To this end, we will focus on educating BNB holders about staking and subsequently liquid staking. Additionally, by coupling closely with the vast DeFi ecosystem of BNB Chain (we’re already in talks with major applications for use-cases such as DEX, borrowing/lending, yield optimisers, etc), we strive to make stkBNB the default asset of the BNB ecosystem and add value to the ecosystem by increasing its ratio and hence higher chain security.

As PoS economies rely on high staking ratio to remain secure as TVL grows, liquid staked assets are becoming the default assets in the PoS space. pSTAKE’s broader vision is to make liquid staked stkASSETs the default assets of the staking economy and become a one-stop-shop for users to stake and find DeFi opportunities across top-tier ecosystems. With much more planned in the pipeline, Persistence and pSTAKE are poised to make a notable impact on DeFi moving further into 2022 and beyond.

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