In this article, we are going to take a look at ClayStack, a next-gen crypto staking platform that promises to redefine staking by allowing users to keep their staked assets liquid.
We will cover the current challenges of the staking sector, ClayStack’s innovative solution, as well as its distinctive features.
Challenges
To understand the novelty of this platform, we need to take a look at the way staking works now. Simply put, through staking, a user locks funds in a cryptocurrency wallet to participate in a proof-of-stake (PoS) system. Tokens are bought and then set aside to serve as a validator to the blockchain and receive rewards.
Staking on PoS platforms is currently enjoying great success. The launch of staking platforms and Ethereum’s Beacon chain in December last year has provided crypto-enthusiasts with the possibility to earn rewards and grow their profits. Staking has even gained traction with institutional investors. As of July 2021, the total market cap of all staking platform tokens is $633 billion.
However, the way staking currently works is not free of limitations. Just think of the fact that your funds are locked for the duration of the staking period. Therefore, while staked, those assets are inaccessible to you. In order to unlock them, you must agree to unstake and thus no longer receive rewards.
Then, staking typically requires an unbonding period, which refers to the time you, as a token holder, will have to wait before selling or transferring your assets.
Since your assets are locked, you cannot participate in DeFi, which prevents you from earning the maximum possible rewards. To solve some of these issues, various platforms have introduced liquid staking solutions, such as Acala Network, Ramp DeFi, StakeHound, and even exchanges, such as Binance and Kraken.
While they do solve the issues mentioned earlier, they do so partially since some of them are centralized or don’t allow cross-chain communication. What’s more, users with no or little experience might find it difficult to use some of these platforms.
What Is ClayStack and How Does It Work?
ClayStack is a staking platform that was built to solve the challenges just mentioned through a novel approach. It uses cross-chain oracles and relayers for real-time inter-chain communication, so it enables users to stake their tokens and take part in the DeFi ecosystem concomitantly.
It allows them to deposit tokens to ClayStack smart contracts and earn rewards. But what sets ClayStack apart is that after depositing their tokens, users have the possibility to directly mint 1:1 ERC-20 derivative tokens against their staked tokens. What this means is that they can unlock liquidity. This is how ClayStack bridges the gap between staking and DeFi.
Since you can unlock liquidity and mint derivative/synthetic tokens, you can use them to lend, farm, or trade and thus maximize your earning potential.
ClayStack’s Exclusive Features
All we’ve just mentioned is possible thanks to ClayStack’s innovative features:
- The derivative tokens are pegged 1:1 with the staked tokens. Plus, they are fungible, can be transferred and traded, and users can redeem them. These derivative tokens can be burned so that users can receive (staked) tokens in their wallets.
- Multiple blockchain support – thanks to this feature, users can engage with different blockchains at no extra cost.
- Transparency – all transactions are tracked on a public blockchain.
- Accessibility through no minimum staking amount – unlike other staking platforms, ClayStack does not require you to stake a minimum amount, which makes it open for all and enables users to stake as many tokens as they want.
- No lock-up periods – another feature that makes ClayStack stand out is that you can sell or transfer your staked tokens at any time.
Team & Investors
The team behind ClayStack is diverse and consists of 12+ members. One of them is Mohak Agarwal, who founded WolfEdge Capital in 2018. This staking-as-a-service platform currently runs validator nodes on over 10 prime PoS networks, so the team benefits from deep expertise in staking. They are expanding as they are currently hiring for different roles.
In July of this year, the team closed their seed round which was co-led by CoinFund and ParaFi Capital, raising $5.2 million. Prominent funds took part, including:
- Coinbase Ventures
- Solana Foundation
- Spartan Group, and
- DeFiance, to name a few.
Moreover, ClayStack is also backed by remarkable angels, such as Aave founder Stani Kulechov, Synthetix founder Kain Warwick, Solana co-founder Raj Gokal, and Sandeep Naiwal, the co-founder of Polygon.
ClayStack Roadmap
ClayStack is planning to launch the alpha version of its staking protocol in the third quarter of this year. This version will bring support for over three assets, with the team planning to expand to more chains in the future.
What’s also worth mentioning is that they wish to work closely with the community and make ClayStack a self-sustaining DAO, which can only lead to a more active and loyal community.
We’re still waiting for more information on its token, CLAY, given that liquidity providers can earn incentives through CLAY tokens to make derivatives markets liquid.
Conclusion
With the DeFi sector constantly growing, the need for liquid staking becomes more apparent. The ever-increasing importance of liquid staking in a multi-chain world, ClayStack’s innovative approach, and the support from leading funds, industry thought-leaders, and DeFi founders make it likely for this project to revolutionize staking.