KuCoin AMA With Stader Labs (SD) — Making Liquid Staking More Accessible
Dear KuCoin Users,
Time: April 10, 2023, 2:00 PM - 2:59 PM (UTC)
KuCoin hosted an AMA (Ask-Me-Anything) session with Venkata Sai Amitej Gajjala, Co-Founder & CEO of Stader Labs, in the KuCoin Exchange Group.
Official Website: https://www.staderlabs.com/
Whitepaper: Click to view
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Guest
Venkata Sai Amitej Gajjala — Co-Founder & CEO of Stader Labs
Q&A from KuCoin
Q: What does Stader Labs do? Could you help our community with the difference between Liquid staking and plain Staking?
Amit: Stader is a Proof-of-Stake (PoS) liquid staking protocol that was created to make staking accessible to everyone while solving main staking problems. To understand why liquid staking is important, let's first understand what normal staking is and compare them.
Staking involves locking your coins in a blockchain for a certain period of time to get, in return, a reward for contributing to the blockchain's speed and security. It works more or less like depositing money in a bank: the investor locks his assets in a fund and, over time, gets a reward (called interest).
Liquid Staking, however, goes a step further, you will generate returns for the money you have locked, but you will have a token that represents the amount you have staked so that you can keep using your funds in other protocols. You can perform the DeFi strategy you like most.
So it's like having the best of both worlds! Staking PLUS DeFi.
To summarize, liquid staking has 4 main benefits over plain staking:
Benefit 1: Enables additional yield (from staking + from DeFi)
Benefit 2: Ease of use
Benefit 3: Network security —> the more $ staked, the more secure a network is
Benefit 4: Network decentralization —> We automatically split your stake into dozens of different validators, helping decentralize the network.
Q: What should $SD holders be excited about? What should we look forward to?
Amit:There are many things we are building at the moment. Let's talk about the SD token and how our solutions and products accrue value to SD holders.
SD token, right now, is a governance token. However, in ~1-2 months, two new use cases will go live.
1. SD staking. Many investors have already signaled their intention to make the SD token Revenue-sharing via governance.
2. Bonding SD to become an Ethereum node operator with Staderlabs. We will be asking for a 0.4 ETH bond in SD for each validator that wants to be spun up on the network.
At the same time, you have a very positive landscape for LST (Liquid Staked Tokens) since, in barely 48 hours, Shanghai Upgrade will take place. With it, Ethereum unstaking will be live, and many people waiting on the sidelines will decide to stake their ETH.
Currently, only 15% of all circulating supply of ETH is being staked, but if we compare it with other Proof-of-Stake protocols, this number could reach 50% to 70% relatively soon! So, as of today, Stader has 70,000 stakers across 6 chains where we are live. But you can imagine how that number can look like in many months from now, once we go live in places like Ethereum and Aptos!
Q: Can you give us a quick walkthrough of your tokenomics and what the community can expect?
Amit: Our token has a total supply of 150 million; currently, the circulating supply is 25 million. At a current price of $1.35, that puts us in around a 30-35 million market cap. As mentioned before, SD is a governance token, but several use cases are coming. We take a commission of the staking rewards that our users generate, and that forms our revenue. We continuously incentivize the DeFi use cases of our tokens (BNBx, MaticX, etc.) by boosting the APRs of their farms.
We boost SD farms too! For instance, there are 50% SD farms in Balancer, Ethereum, and Polygon! In places like REF finance in NEAR, Thena, on BNB, there are eye-popping APYs both for BNBx and SD LPs. We expect more and more people to spin up validators with us, and more and more SD will be bonded and removed from circulation.
When SD staking goes live, another big chunk of the circulating supply is expected to be locked too. That's it for a short overview of our tokenomics!
Q: You spoke about your private sale. Could you tell us more about your partners?
Amit: We raised a total of 40 million USD across two private sales and a public sale.
That is an overview of our major partners, with entities like Pantera, Jump, Coinbase, and several angel investors participating in the rounds too. We can proudly say that we are very well capitalized for many years to come!
Additionally, we have more than 40 DeFi integrations and about 20 integrations with other entities using our backend services.
Some of them include the likes of AAVE, Balancer, PancakeSwap, etc.
Q: What are the challenges with the current staking ecosystem that led Stader to consider launching on ETH? Aren’t there a lot of players already operating on ETH?
Amit: Ethereum is bigger than all other chains combined.
Currently, there are 30 billion dollars in ETH being staked. If only we get 1% of it, that's 300 million, meaning we triple our TVL, so we are obviously very excited to work hard and make both the Ethereum network and Stader investors benefit from the creation of EthX.
Furthermore, we are excited to help decentralize Ethereum: 30% of all staked ETH is with Lido. And 4 entities: Lido, Kraken, Coinbase, and Binance, have 60% of all staked ETH. This is obviously not good. Since it is easy to censor those 4 companies and put the network in big problems. So, we want to help decentralize Ethereum, thanks to EthX.
Ethereum is bigger than all other chains combined.
Currently, there are 30 billion dollars in ETH being staked. If only we get 1% of it, that's 300 million, meaning we triple our TVL, so we are obviously very excited to work hard and make both the Ethereum network and Stader investors benefit from the creation of EthX.
Furthermore, we are excited to help decentralize Ethereum: 30% of all staked ETH is with Lido. And 4 entities: Lido, Kraken, Coinbase, and Binance, have 60% of all staked ETH. This is obviously not good. Since it is easy to censor those 4 companies and put the network in big problems. So, we want to help decentralize Ethereum, thanks to EthX.
We are coming to Ethereum with ETHx, a unique solution that will alleviate many current pain points. We are reducing the capital barrier of entry from 32 ETH to only 4 ETH. By reducing the barrier of entry by 8, we are allowing a lot of people to become validators, which we had never thought of before. 32 ETH is a whopping 50,000 USD! Not many people have that, but 4 ETH is only 6,000 USD, a much more affordable entry.
As a result, our testnet is a smashing success!
We had a very good start on the node operator side, with more than 200 N.Os registering in Goerli in the first 5 days. This unique solution will make Ethereum more decentralized and secure and be very profitable as well!
Q: The 4 ETH bond for home stakers could be a powerful catalyst for more home stakers joining. Can you tell us what this means for home stakers? Also, how are you ensuring user funds are protected with the 4 ETH bond?
Amit: We carried out an extensive security analysis with SSV to ensure that 4 ETH bond protects against tail risks.
In summary, the ETH that the validator stakes (the 4 ETH) are the first ones to be lost in case of penalties/slashing. And if a validator does not have a good performance, it is put on the exit queue before it starts jeopardizing the 28 ETH that has been pooled from liquid stakers.
So if you are a liquid staker, there is no fundamental change vs. other liquid staking solutions out there. And if you are a validator, we have specific guides to help everybody set up nodes in an easy and agile manner.
Q: What is it about your team that makes you confident about your goals for 2023 and beyond?
Amit: We are a team of 45 passionate builders with decades of experience in business from all walks of life (startups, tech firms, management consulting, etc.). I am very proud of what we have built so far (almost two years now!) and all the solutions that are in the pipe.
We have stuck together through thick and thin, and everything we build at Stader is thinking about the long term. I am confident our ETHx solution will revolutionize staking in Ethereum and will mark a "before and after" for Stader Labs and our community members. We ain't stopping here. We really want to make staking mainstream!
Q: Can you tell us about your journey on other chains so far - how about Polygon and BNB chain? Do you have any insights to share about building on different chains?
Amit: Polygon and BNB are indeed our most popular chains. We have tens of thousands of stakers in each. Our solution in BNB, called BNBx, is newer, and we have super good opportunities there in places like Thena, Wombat, and PancakeSwap. Don't hesitate to have a look at it!
In every chain we come from, we partner with the top 5-10 DeFi protocols to ensure that people have the maximum utility possible with their LST (liquid staked tokens).
We also do a lot of marketing campaigns and activities with our community, and we make sure that they are available in all chains. For example, we currently have a $1,000 bounty in Zealy, a Web3 engagement platform!
Free-Ask from KuCoin Community
Q: Are you planning to promote your project in countries/regions where English is not good? Do you have a local community for them to understand your project better?
Amit: For us, it is key to being truly global. We have super active communities all around the world:
Q: We are currently living in the heyday of new Layer 2's. Can we see Stader launching on this new Layer 2s, as a lot of people would love using Stader on Optimism, zkSync, and Arbitrum?
Amit: Once ETHx is live in Ethereum mainnet by the end of May, and we get big liquidity in key places like Balancer, we will expand our token to Arbitrum, Optimism, zkSync, etc. We are already in contact with all their teams.
Q: Stader Labs is live on Hedera, Polygon, BNB, Fantom, Near, and Terra 2.0. Why have you decided to operate with all these blockchain networks? What advantages have using an interoperable blockchain system provided you so far for your ecosystem's security, integrity, and stability?
Amit: Our end goal is to provide liquid staking in all the major proof-of-stake L1 blockchains. Ethereum, Aptos, and Sui are the next 3, but there is no stopping there!
Q: How does Stader monitor the performance of validators running on transactions and ensure that the performance generated is good?
Amit: We monitor the performance of all validators in the different blockchains we are live to ensure we are not delegating to non-performing validators. We have a stringent set of criteria to choose them. Another key aspect is to ensure that we are not delegating to validators with a top stake in the network already since we want to promote decentralization.
Q: What measures are in place to protect your users' funds when using your platform? How secure are your smart contracts against attacks? Have they been audited?
Amit: For Stader, security is paramount. Our security strategy has 4 pillars:
1. Multiple audits
2. Bug Bounties
3. On-chain monitoring
4. Multi-sig wallets for any treasury or smart-contract-related wallet
We have 15 audits combined on the 6 chains we are live at the moment, as we are undertaking 2 audits for ETHx at the moment.
KuCoin Post AMA Activity — Stader Labs (SD)
🎁 Participate in the Stader AMA quiz now for a chance to win 6 SD!
The form will remain open for five days from publishing this AMA recap.
Giveaway Section
KuCoin and Stader have prepared a total of 1,274 SD to give away to AMA participants.
1. Pre-AMA activity: 240 SD
2. Free-ask section: 30 SD
3. Flash mini-game: 254 SD
4. Post-AMA quiz: 750 SD
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