Liquid staking solution on Fuse Network
Proof-of-stake (PoS) is a consensus algorithm that gives you the ability to stake your tokens to make the network more secure that usually involves providing computational resources in the form of running a validator node. The benefit is that you earn rewards in the validation of blocks (21.31% for Fuse at time of writing). Delegated proof-of-stake (DPoS) allows anyone to delegate staking to validators so that users do not need to run a validator node themselves in order to participate in network staking rewards which simplifies the process.
There is an associated opportunity cost when users participate in network staking. You must forgo the benefits of an alternative option. In the case of staking, users are essentially locking up their tokens to staking and therefore forgoing the benefit of using their token assets to generate rewards and yields in other ways. Some broad examples include collateral in lending or liquidity provision in trading. The rewards (considered as potential earnings) of these alternatives are the opportunity cost.
Will you stake in PoS consensus for network rewards? Or use your token assets in say DeFi protocols? What if you could do both and receive the best of both options?
Jin Finance is the first non-custodial liquid staking protocol built on Fuse Network available to all the users and projects within the Fuse ecosystem. You can stake your FUSE tokens thru the Jin Finance protocol and receive “liquid staked FUSE” tokens (sFUSE) that you can use in decentralized finance (DeFi). The sFUSE token acts like a claimable receipt, allowing you to exchange them back anytime for your initial staked FUSE, plus any accumulated rewards earned.
Jin Finance provides more opportunities by enabling you to use your staked tokens to gain yield on top of yield. Use your sFUSE tokens (which earn staking rewards) as collateral, for lending, yield farming, trading liquidity, and more.
Here’s an example of how it works:
Let’s say a user stakes 100 FUSE token via Jin Finance and gets 100 sFUSE tokens in return. What happens in the Jin Finance protocol is that it manages to delegate the FUSE tokens to validators on the Fuse network.
Your sFUSE tokens can be utilize across different DeFi protocols in the Fuse ecosystem to get rewards and earn additional yield. On this point, should you decide to withdraw (unstake) sFUSE back for FUSE after some time, you’ll automatically end up getting more FUSE tokens than you originally deposited in. You have full control over your tokens so you can unstake anytime you like.
In the example, you might find that your original 100 sFUSE is now worth 101 FUSE, and this is due to accrued network staking rewards over time. Jin Finance liquid staking protocol enables you to use your staked tokens to gain greater yield.