There’s no doubt that decentralized finance — or DeFi, as it’s popularly known — is far ahead of the financial system we interact in our daily lives. For those who aren’t familiar with the term, ‘DeFi’ refers to financial services and products built on a public blockchain, with minimal central governance. DeFi makes financial services open and programmable.
Its integrity and reliability are way more than what is currently offered in traditional finance, and its ability to generate returns on investments is also way higher (but also riskier). These are precisely the reasons why DeFi adoption has been rising steadily for the last few years, everyone heard of the DeFi summer.
However, at the same time, there are also some inherent shortcomings in the DeFi ecosystem. These challenges are deep-rooted into the algorithms of the NEAR Protocol that are used to drive the economy of smart contracts around the NEARverse.
Liberate staked NEAR tokens.
The outstanding issue here is that staked assets are generating rewards from validators, but we believe that they can be liberated to interact in on-chain activities (e.g. lending, borrowing or collateral), that is the big opportunity for the DeFi ecosystem on NEAR to flourish.
One important shortcoming is the inability to generate any returns on staked assets.
If you’ve staked all of your crypto holdings, you’re essentially in a liquidity crisis and you can’t invest or trade-in more profitable crypto pairs on exchanges.
In NEAR staking has been about locking tokens with a validator for a long time and getting a predetermined staking reward in return. While it guarantees the return on our staked NEAR much like a bond, it also limits the opportunities of generating higher returns on those NEAR tokens.
Liquid staking is key to ignite DeFi on NEAR.
As its name suggests, it allows using the staked NEAR tokens in other trading or investing opportunities to let you get the best of both worlds — a reward on your staked assets, as well as the returns from new trading/investing opportunities that you spot.
It does so by tokenizing the stakes; this is where the NEP-141 comes to solve the challenge, so the NEAR token stakers can use them as collateral in other financial applications. Tokenized stakes, sometimes also known as staking derivatives, can be traded freely among users, locations, and even blockchains.
That’s the reason why Liquid Staking has been gaining a lot of popularity in recent days. A number of new projects with this feature are coming out in the DeFi ecosystem, and crypto holders are also taking interest in them to monetize their stakes. Here we’re going to discuss the goal for Meta Pool as an integral part of the NEAR DeFi ecosystem.
What is Meta Pool?
Meta Pool is a liquid staking solution for NEAR Protocol backed by community staking providers. Meta Pool lets users stake their NEAR, receiving a liquid, NEP-141 standard token they can use to participate in on-chain activities, e.g. lending. Nowadays staked NEARs are locked and can not be used in DeFi.
Our goal is to solve the problems associated with Proof-of-Stake networks staking: illiquidity, immovability and accessibility. We aim to make staked NEAR tokens liquid and at the same time distribute staking in multiple validators to improve censorship-resistance of the NEAR network.
Follow us on Twitter @Meta_Pool