Staking at its best — SALSA
What is liquid staking some may ask? Liquid staking is one of the protocols that supports the security of a blockchain, while adding to its development, security and efficacy. How does it work? What liquid staking does, is basically allowing the crypto user to stake their coins and to receive, in exchange, a derivative token that can be used in the blockchain for various purposes.
What is SALSA (Staking Agency Liquid Staking Algorithm) more precisely? The name speaks for itself — The liquid staking algorithm, made with love and passion by the Staking Agency team and with the skills and experience gathered throughout the 3 successful years since we arrived on the market as a staking provider. SALSA is a smart contract that, in the moment when a user delegates EGLD, an equivalent quantity of LEGLD (Liquid EGLD) is generated by the system and sent to the user’s wallet.
Purpose and usage of LEGLD, advantages of liquid staking — topics that will be touched in this article but, until this point, let’s explore the SALSA universe!
Access SALSA website https://devnet-liquid.staking.agency and choose one of the preferred login options:
· Delegate → delegate your EGLD for liquid staking;
· Undelegate → remove EGLD from liquid staking with the normal waiting time of 10 days;
· Withdraw → after the 10 day waiting period, the withdraw button will be used to close the transaction and send EGLD from liquid staking to the user’s personal wallet;
On the right, the great part of liquid staking and the novelty brought by it:
· Undelegate Now → the delegators will have the option to undelegate their EGLD without any waiting time, while considering a commission fee which will be applied to the withdrawn amount;
· Add Reserve → besides the staking, users will have the ability to add EGLD directly to a reserve, which will be used to support the “Undelegate Now” requests; No APR is offered but, in return, the commission fees applied to the users who use Undelegate Now, will be rewarded to the ones that have contributed to the Reserve. Moreover, there will be no waiting time for withdrawing EGLD from the Reserve queue;
· Remove Reserve → withdraw from Reserve; Once withdrawn, the EGLD will be transferred to the owner wallet without any waiting time; *In the exceptional case when the amount to be withdrawn from reserve is higher than the one available in the pool, there will appear a waiting time in accordance with the remaining waiting time of the request to undelegate from liquid staking previously raised, up to 10 days;
*Important Note: Staking Agency will not have any benefit from any fee applied other than the standard agency commission, service fee which stands currently at 15%, the same as for standard staking.
Now that we’ve got some insights on the main liquid staking mechanisms, we can go back to the main queues displayed on the page:
Price → LEGLD price will always be higher than EGLD price thanks to the following: For the entire pool of EGLD staked through SALSA there will be a daily auto-compound completed by the system, meaning that the pool will increase from one day to another LEGLD price = total EGLD staked in SALSA/LEGLD Supply >= 1 EGLD
Contract reserves → Total EGLD amount of the pool that supports the Undelegate Now requests, with the related view on Your reserves — amount added by the user to the reserve;
Undelegate Now fee → The commission fee applied for the Undelegate Now action; The fee will not be a fixed rate, but it will fluctuate based on the reserve amount and the undelegated amount. The EGLD from the commission fee will be rewarded to the users who added to the reserve, proportionally with the amount reserved.
SALSA environment was created, amongst others, to be user friendly and to offer full transparency to the end user.
In order to run a Undelegate Now transaction, after clicking on the related button, a pop-up window will be displayed — add here the amount to be undelegated immediately → check Receive amount, the one that will be returned to the wallet without the commission fee, as per the above image, and click on Submit.
In the same manner, for adding EGLD to the reserve, click on the related button:
SALSA liquid staking offers great flexibility to the delegator, if advantages were to be named, let’s take a look at a few now:
· Undelegate Now — Staked EGLD can be easily withdrawn, without any waiting time limitation, only based on the user’s needs, for example: if the price reaches the personal target, for adding to farms or liquidity pools or so on;
· LEGLD can be transferred from one wallet to another without having to undelegate and wait the usual 10 day waiting period; Once withdrawn from staking, the EGLD will be released to the new address/wallet;
· Automatic auto-compounding completed daily;
· LEGLD price vs EGLD price — as the logic above has explained, when withdrawing from staking, you’ll have the initial EGLD, APR and the benefit of the daily auto-compound;
· As per the normal path, lending and borrowing services will be developed in a short time, case in which LEGLD can be easily used for any of these cases and also for the buying or selling of NFTs.
