Liquid Staking on Avalanche
One could argue that a Proof of Stake (PoS) chain is only as good as its strongest liquid staking solution. Validating the network is one of the best opportunities for generating passive income. Liquid staking takes it to the next level, ensuring you never have to sacrifice DeFi opportunities to participate in improving network security. We can see this clearly on Ethereum with Lido’s dominance on the chain. For chains like Avalanche, where liquid staking still exists in its infancy, this reality is more obscure. However, if we can identify strong demand for liquid staking on Ethereum, why would we think any less for a chain like Avalanche? After all, Avalanche is Ethereum Virtual Machine (EVM) compatible and was developed to overcome the speed and scalability challenges of networks like Ethereum. Surely there is a high cross-section of users interested in liquid staking on a network not bogged down by exorbitant gas prices.
However, it’s not just users in need of a true liquid staking solution on Avalanche. DAOs are in great need, though arguably across all PoS chains. Even on Ethereum where Lido dominates the liquid staking space, DAOs looking to diversify their treasuries into ETH2 staking don’t have all the answers. Unless they want to go through the hassle of dedicating dev resources to implementing their own staking solution, they can only trust so much of their treasuries to Lido due to third party risk. In effect, Lido’s dominance has become its own worst enemy when it comes to decentralization. Too much risk is centralized around Lido due to the billions of dollars in trust issued to it.
Returning our focus to Avalanche Network, there are a handful of DeFi projects on chain interested in solving the problem of liquid staking. However, we feel a new approach is required to create a liquid staking solution that will approach the values of decentralization and DeFi composability while providing a product tailor-made for DAOs.
Geode Finance — White Label Liquid Staking
Geode Finance is a first of its kind, white label liquid staking solution. Geode helps DAOs to create their own liquid staking product to offer to their users, all to the benefit of network security and decentralization, across any PoS chain. This is how Geode aims to create the Liquid Staking Universe, with DAOs integrating Geode’s solution representing Planets in that Galaxy, and different PoS chains are Galaxies to be explored. Never before in decentralized finance (DeFi) has such a solution been proposed or implemented.
Geode is uniquely positioned to impact capital efficiency in a major way on Avalanche due to the lack of a liquid staking solution on chain with real DeFi composability. However, launching on Avalanche comes with another benefit that Ethereum is still lacking — a completely live staking ecosystem with withdrawable funds.
Geode maintains the goal of creating the Liquid Staking Universe while bringing capital efficiency to all PoS chains, starting with Avalanche. Our first use case is through the yyAVAX token. The yyAVAX token represents AVAX staked in validators within Geode’s staking ecosystem. Currently, Yield Yak is the first Planet in the Avalanche Galaxy offering Geode’s staking solution with Eden Network serving the role as node operator.
However, in the future additional Planets (DAOs) can enter Geode’s Universe via Avalanche just as they will be able to on other PoS chains. This means any DAO on Avalanche can offer their own brand of liquid staking to its users, create new products, and begin earning returns on currently idle funds. Best of all, this infrastructure is built upon the concept of Geode’s innovative Dynamic Withdrawals liquid staking model — one we believe is set to revolutionize the space.
Furthermore, as more Planets take advantage of Geode’s staking solution on Avalanche, network security will improve as more investors commit to secure and decentralize the network. From a user perspective, capital efficiency is improved by holding a token that represents staked AVAX and is yield bearing. Additionally, there is no opportunity cost to validating the network as the token also offers DeFi composability. And did we mention this service is completely FREE for DAOs to utilize?
The goal of the yyAVAX token, and all future staking tokens in Geode’s Universe, is to provide enough composability so that users only hold vanilla AVAX to pay for network transactions. In a world where liquid staking derivatives can be integrated into the vast majority of DeFi applications, there are very few reasons not to use yyAVAX and compound your yields. We believe that yyAVAX will become a very powerful building block for Defi within the Avalanche ecosystem, enabling your regular DeFi user to turbocharge their yield potential, without having to do anything other than use the yyAVAX token in dapps just like they would use regular AVAX.
Bring Your Own Governance
Another benefit of joining Geode’s Liquid Staking Universe is the ability to bring your DAO’s own governance into the equation. Geode offers a customizable white label liquid staking solution that can be developed around the decisions of your community’s own governance. In other words, Geode has no control of how you utilize your liquid staking token. Instead, your team and your community get to decide the best course of action for your liquid staking offerings.
Furthermore, acting in a democratic fashion is something that’s very important to the Geode Universe as a whole. Currently, we see a lack of true democracy in the space. And while each protocol maintains respective control in the ways in which they operate and govern, Geode believes each DAO should have an equal voice in the progression of Geode itself. That said, Geode will maintain a heavy focus on allowing our partners to help guide Geode by voting on new proposals and plans to improve our overall Universe.
In the future, as we onboard more DAOs into our ecosystem, there will be a Senate functioning as a control mechanism for all Planets (DAOs) within a Galaxy (chain). This way, DAOs remain in the driver’s seat of their own liquid staking products while also having equal input on the underlying mechanisms which allow them to do so in the first place.
Want to partner with Geode to offer your own liquid staking derivative on Avalanche or beyond? Geode makes integration easy. And best of all, it’s FREE for DAOs to integrate! To learn more, visit our Discord or for Business Development, please contact Oranges in the Operations department. You can also email him directly at firstname.lastname@example.org.
How Do I Engage With Geode?
To participate in Geode’s community and stay up to date on the latest alpha, join our Discord. To stay up to date on the latest Geode developments, follow us on Twitter. For more educational content, follow us on Medium. To use Geode, visit geode.fi!