sTokens, NFTs mirroring DEV staking
DIP-66 has been approved by the governance vote of DEV staking users, and implementation has been begun. This means that it will be possible to tokenize Dev Protocol’s staking as an NFT, think about it as a ‘Proof of Patronage’, and bring staking proof as a financial instrument, for worldwide creators’ projects, to the Ethereum ecosystem. Creators’ projects currently include Open Source Software, public goods, and the Music market, which has already been published, and includes everyone that is involved in the music industry. Our goal is to expand and embark every single Creator in our ecosystem.
With sTokens, Dev Protocol moves further forward into building and consolidating itself as the Launchpad for the Decentralized Creator Economy. Dev Protocol provides Oracle-validated social tokens for all creator areas, which facilitate the creation of DAOs governed by creator communities. sTokens will be an excellent instrument to build an economy around the fan community of every single creator. Think of Patreon donation categories, where Creators can specify perks depending on the amount you donate. sTokens takes this to a new level, making it decentralized, increasing composability. Creators will be able to design their own perks, use them on every other platform, and even as a financial instrument. Dev Protocol brings an equal opportunity to Creators all over the world by providing an economic foundation on Ethereum for Creators to create more actively and help them to build a DAO, for further growth.
Overview
sTokens are NFTs issued for each Dev Protocol staking pool and are tokens that indicate ownership of individual staking positions, sTokens allows users to transfer their staking positions to others. For users who are already staking via Dev Protocol, we will provide a migration tool to sTokens.
With sTokens, new solutions and the following use cases could be implemented, for example:
- Creators offer perks to sTokens holders
- Memberships or purchase rights of special NFTs/Products
- Boost staking by offering first-come, first-served quotas on sTokens perks
- Create multiple staking positions for single Property (a.k.a. Creator tokens/Staking Pool) as multiple sTokens
- Selling sTokens by early staking users
- Borrowing any tokens using sTokens as collateral
- Further, enhance the composability with a contract to bridge sTokens that meet certain criteria to ERC-20 tokens
And the more these benefits of sTokens are beneficial to staking users, the stronger the motivation to hold sTokens, and the more incentives to prolong the staking positions.
What’s sTokens?
sTokens are NFTs issued by Dev Protocol when DEV tokens are staked on a Property (Staking Pool), indicating ownership of the individual staking position and the key required to claim the staking reward. Transferring sTokens means that you are transferring the staking position itself.
sTokens have a mint and an update function but no burn function. Users can create new sTokens, or update an existing sToken to change their current staking position. If the user removes all of the DEV staking from a specific Creator Pool, the sTokens will be updated with the staking amount as the current amount, 0. The user will not receive any reward for holding the sTokens, but the sTokens is a memento for the user; if the project is a favorite with the user, the user can easy-to-resume the staking position by a something inspiration.
I personally like Di Gi Charat, but I stopped watching its activities many years ago. After a long time, I’ve searched for Di Gi Charat and found out that they are working on a 2021 edition. If I had those sTokens in 2000, I would be delighted to resume that age-old staking position. The more time we spend supporting to projects, the stronger our memories will be.
Users can also hold more than one sTokens for a single Property so that the staking position can be divided according to use.
Apart from the external incentives they provide, sTokens also have the following characteristics as a reward pool:
Earning retrospective rewards
sTokens holders are entitled to earn staking rewards from the Property that their staking position indicates. The staking rewards are determined on a block-by-block basis and are always accumulated in the sTokens as an amount that the user can claim. This means that the holder of a sToken is entitled to the amount of unclaimed reward accumulated in that sToken from the past to the present.
Liquidation of positions
An sToken holder may liquidate just a part or all of its staking position.
Why not ERC-20?
Dev Protocol staking rewards change the rate of return with unpredictable timings as third parties increase or decrease staking. To implement that property, Dev Protocol handles a cumulative sum of the reward unit prices that continue to be increased and a snapshot of that cumulative sum at the time for each staking. The staking rewards are unique, and fungible tokens are inconvenient to retain that unique data. This is similar to why Uniswap v3’s liquidity tokens are now NFTs instead of ERC-20.
Backward compatibility
Pre-DIP-66 staking methods will continue to be available, and contracts and Dapps that already integrate with Dev Protocol will continue to be able to use them.
sTokens<>ERC-20 Bridge
Users who hold sTokens may receive a range of benefits from holding them or from depositing them into a contract.
Benefits could include gaining access to gated content/communities for the sTokens holder or using it as collateral in other DeFi protocols.
However, as sTokens are NFTs, they are not well suited to services that involve pricing―services offered in bulk to groups that meet certain criteria―. To solve this problem, we plan to provide a bridge between sTokens<>ERC-20.
The bridge will issue ERC-20 tokens defined by creators and an NFT as its certificate by depositing sTokens.
For example, Alice, who is staking 98 DEV to the Property “Ingram,” can deposit sTokens with the bridge to obtain “98 xIngram” and the NFT “Cert#1” as a certificate, giving her access to the services unlocked by 98 xIngram. Alice can redeem the sTokens deposited by liquidating the 98 xIngram and Cert#1.
Alice can sell 98 xIngram and Cert#1, but whether or not she does so will depend on how she plans to redeem the sTokens.
Deployment plan
DIP-66 is being developed by Dev Null and will be deployed within the next few weeks. Stay tuned on our Discord or Twitter for updates!
