Today Equilibrium welcomes a new product to its DeFi product family — the staking pool.
The staking pool aggregates all the staking opportunities in Equilibrium into a unified interface and one-stop shop. Users can instantly start earning predictable interest on their EOS and NUT holdings by staking them here. Importantly, users can now stake EOSDT as well. Equilibrium’s flagship stablecoin product. All staked assets are safely stored in Equilibrium’s smart contracts, and stakers can securely withdraw them anytime with their private keys.
The interest rate earned on EOSDT depends on how much of an asset is already staked to the staking pool, the total outstanding EOSDT, and the portion of fee sent to the staking pool. Simply put: every user’s interest is calculated with an understanding that they are a fraction of the whole. The more you stake, the more interest you earn.
Earlier this month, Equilibrium released Bitcoin collateral support as a deep integration of pTokens technology into its web interface. With two simple blockchain transactions, users can collateralize their BTC in exchange for EOSDT. Bitcoin has a huge market capitalization, so integrations with it will drive enhanced liquidity for EOSDT and increase the yield for EOSDT stakers.
Let’s walk through an example of how interest in Equilibrium’s staking pool works. Suppose there is already 900 EOS in the system as collateral, and you stake 100 EOS. Your share represents 10% of the overall system collateral. After some time has passed, the system will earn fees from REX, generate liquidation penalties from the occasional margin call, and collect daily rewards from BPs paying their share into eosdtbpproxy. Overall the system gained 10 EOS, so your share of this total gain is 10%, or 1 EOS. When you want to withdraw your collateral, you’ll be able to retrieve 11 EOS from the contract.
Here’s another example using another asset: suppose there is 9,000 NUT in the governance contract and you stake 1,000 more. Your share of the entire NUT stake is 10%. After some time passes, additional NUT tokens accumulate on the governance contract as fees that come from EOSDT surplus auctions, EOS collateral auctions on the liquidator contract, and block producer rewards. We pay 85% of the daily BP payment vs. the usual 70-75%, and everything is distributed by the community — Equilibrium itself isn’t involved.
In total, the governance contract received an additional 100 NUT. Your share of this total gain is 10%, or 10 NUT. When you unstake your holdings, you’ll have access to 1,010 NUT from the contract.
This staking use case is a handy way for crypto users to put their digital assets to work and make them productive. It will surely drive stablecoin demand, leading to increased EOSDT generation and therefore an increased supply of the stablecoin.
Those interest payments have to come from somewhere, after all.
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