An Introduction To Superfluid Staking on Osmosis
What is Superfluid Staking?
Superfluid Staking is the next step in Proof of Stake blockchains. It was deployed on Osmosis at the beginning of March. Initially, it was implemented on the ATOM/OSMO pool however, proposals to add the feature to other Pools have been rolling out quite consistently. As of writing, it is enabled on 8 Pools (full list at the end of this article).
Superfluid staking enables the user to go one step further in their LP positions. Prior, one would have just been able to earn a percentage of the swap fees and liquidity provision incentives once their LP position was bonded. Now, by means of Superfluid Staking, users can earn further APY and help secure the chain by allowing a portion of the underlying OSMO assets in the token pair to be staked to a validator.
The OSMO that is staked from superfluid allows the user to take part in governance via staking the position with 1 Validator (not multiple), hence helping secure the chain. However, the owner of the LP position can’t cast their own vote and must opt for what the validator votes on. Therefore, it is ideal that you choose a validator that has its views closely aligned with yours.
In the case of Liquid staking, whereby the creation of synthetic derivatives are involved — for example, depositing 1 ETH into LIDO Finance will return you 1 stETH by which you can make use of that to earn additional yield, Superfluid handles this differently. Superfluid simplifies this process by eliminating the need of creating a synthetic asset and creating less confusion concerning Pools. If you have an asset and its synthetic derivative you would have to create pool pairs to cater to both of those. With Superfluid only 1 pool is required for a token.
A notable use of Liquid Staking within the Cosmos Ecosystem is with the newly launched Crescent Network. An article on that will be released at a later date — Stay Tuned!
Currently, you can only enable Superfluid Staking whilst opting to bond on the 14-Day Unbonding period option. This is to match the duration of un-staking the OSMO token from the selected validator.
How to Superfluid Stake
In a nutshell, Superfluid Staking is akin to adding liquidity to Osmosis with 1 extra step. Therefore, if you know how to add liquidity to Osmosis, you can skip to Step 3.
Luckily for us, the Osmosis team focused on UI quite heavily. This enables us to add liquidity in a few simple steps.
Step 1: Navigate to the ‘Pools’ Section on Osmosis
Here you will get a list of all the pools currently available on Osmosis. The ones we are interested in are the ones with a purple border around them such as the one in the image above. This signifies that they are Superfluid enabled.
Step 2: Add Liquidity to the desired pool
On Entering the respective Pool, you will see something similar to the above image. First, click on the ‘Add / Remove Liquidity’ button. This will make the ‘Manage Liquidity’ pop-up show up on your screen.
OSMO pools work by depositing equal weights (USD equivalent) of two assets into the desired pool (50/50). Once you proceed with this step you will receive LP (GAMM) tokens which represent your share in the Pool. After adding the liquidity by clicking ‘Add Liquidity’ we can move on to the next step.
Step 3: Bonding the LP tokens and enabling Superfluid
The next step is to click the ‘Start Earning’ button to make the below pop-up appear on the screen. This is a fairly straightforward one. Superfluid enabled will have the Osmosis logo next to the bonding period (Superfluid is limited to 14 Days). After selecting the 14 Days bonding period, make sure you check the ‘Superfluid Stake’ check box. Select the amount of LP tokens to bond and hit ‘Next’.
Note: In case the button at the bottom says ‘Bond’ and not ‘Next’, this means that Superfluid is not enabled.
Once you click next, you will be presented with a list of Validators to select! I will be selecting the Simply Staking validator, which is our highly secure and reliable validator.
The last step is to click Bond & Stake. You are now Superfluid enabled! You can confirm this by seeing a section on the pool page titled ‘Superfluid Staking’
Congratulations on getting to the end of this guide! You are now Superfluid enabled and are now simultaneously earning higher APYs and helping secure the network further.
Which Pools are eligible as of writing
Pool #1 ATOM / OSMO
Pool #3 AKT / OSMO
Pool #9 CRO / OSMO
Pool #560 UST / OSMO
Pool #561 LUNA / OSMO
Pool #584 SCRT / OSMO
Pool #601 CMDX / OSMO
Pool #604 STARS / OSMO
About Simply Staking
Simply Staking is a blockchain infra provider across 40+ networks, across various ecosystems. PoS validators on Cosmos Hub from genesis, Oasis, Emoney, Akash, Kusama, Polkadot, and many more.
We also operate node infrastructure on the Chainlink network providing price feeds to Aggregator contracts which are used by major Ethereum DeFi apps. Our participation in Chainlink aggregator contracts spans across other networks such as Layers 2s, BSC, MATIC, XDAI, RSK, and more.
We’re also a Lido ETH2.0 operator, enabling us to run 1000s of ETH validators.
Simply VC also comprises other dev teams building financial, blockchain, and infra monitoring tools.
All our infra is run off self-hosted or co-located servers, with no cloud usage at all and our base being in Malta.
Stay tuned to Simply Staking for more Osmosis-related guides and documentation:
- Website: https://simply-vc.com.mt
- Twitter: https://twitter.com/SimplyStaking
- Discord: https://discord.gg/Kpzc58Gu9a
- Telegram: https://t.me/SimplyVC
