Introducing SteakBank Finance

We’ve seen a lot of progress when it comes to the creation, implementation and adoption of blockchain-based technology outside of the basic monetary transfers brought by Bitcoin. Said progress has been undisputedly brough about by the inception of Ethereum. Be it different Layer 1 networks, different consensus mechanisms, new incentive models or scaling solutions, the demand for the properties of digital assets on blockchains such as atomic transactions and composability on open finance have been undeniable.

Participants in the space have also evolved from mostly researchers and cyberpunks, to currently include financial institutions and tech leaders (i.e. Jack Dorsey, Elon Musk, etc.). Over the years, we see trends such as DeFi (Decentralized finance) gaining unprecedented traction as an increasing number of people have a stake in it.

The growth of DeFi can be clearly seen on this chart:

Source: DefiPulse

Just nearly a year ago, the “Total Valued Locked” in DeFi was at $725 Million, and it is now currently at $48.75 Billion.

Of course, while participating in DeFi farming can bring in some lucrative yields, some people would also like to participate in validating the layer 1 blockchain via delegation to nodes, which can also provide them rewards. That would usually include PoS systems such as ETH2.0, BSC, Cosmos, Tezos, etc.

A rough estimation (as of 5/4/2021) would be :

• ETH2.0: 3,704,642 ETH ($7,500,807,259)
• BSC: 6,847,314 BNB ($2,314,392,132)
  This value only accounts for the tokens staked in the top 21 validators, so actual staked value could be higher.
• Cosmos: 174M ATOMS ($3,598,320,000)
• Tezos: 682,728,300 XTZ ($3,570,669,009)

With just a total of these few PoS Chains, the total staked tokens for validating the chain would have added up to $16 Billion of value. These are “locked” and staked in validating chains, and we have yet to include Polkadot, Solana, and Avalanche. With this amount of money “locked” in, we ask ourselves, can these “locked” assets be further utilized?

Enter SteakBank.Finance

SteakBank.Finance is a liquid staking solution with the liquid derivative token (BEP20 standard) being issued on BSC (Binance Smart Chain). This representative token can be utilized for farming in liquidity pools or as collateral in lending platforms and therefore enabling SteakBank users to earn multiple income streams using a single asset. This benefits our users holding the native tokens by optimizing their capital efficiency.

How it started and Why

One of the articles that inspired us to start the project is the superfluidity article written by Dan Elitzer, which aligns with our value of providing more liquidity, lower cost of borrowing, and further maximizing capital efficiency of assets.

Problem:

1. When users stake assets such as BNB with the native validator nodes to earn rewards, the value of the staked assets remain “locked” with the nodes. While that may be perfectly fine with some investors, investors often like to maximize their capital efficiency and would prefer if they could somehow utilize these locked assets and achieve multiple streams of yields.
2. When staking with the native validators, users are bound to a fixed unbonding period of 7 days before they are able to unstake and receive their BNB. This locked period could pose as a potential opportunity cost to investors, as there might be situations where investors would need to quickly liquidate their positions. If there is a shorter unbonding time, more BNB will also be able to flow through the BCS system at a higher velocity.
3. Every 24 hours, validators have the option to change the rewards awarded to the delegator. Therefore, in order to get optimal rewards, users might need to constantly monitor the yields on a daily basis in order to ensure that they are always allocating their tokens to the highest yield validator.

Solutions:

1. For those investors who are looking to compound their yields, SteakBank will mint a liquid representative token which has an equivalent value upon staking. The liquid token can then be further used, to participate in other DeFi activities such as liquidity pool or lending/borrowing protocol to get an additional stream of cash flow, further maximizing capital efficiency.
2. SteakBank has a mechanism for early unstake which works by matching newly staked BNB assets with the amount of BNB that users would like to unstake and net it off. So the users who would like to unstake could swap directly with the users who are looking to stake, and therefore get their tokens much earlier.
3. SteakBank has a function called: BCStakingProxy which will monitor any changes made by the validators and dynamically calibrate staking strategy to achieve better APY.

BSC (Binance Smart Chain)

Our long term goal is to allow our users to continue earning yields by validating on the layer 1 blockchain of their choice, and at the same time unlock the value of these staked assets to further participate in the Binance Smart Chain DeFi ecosystem using the liquid representative token issued by SteakBank, whenever our users stake the tokens with us. The choice of issuing our liquid tokens on Binance Smart Chain was because we believe that low gas fees is important for new participants. We want to embrace newcomers with smaller capital pool to participate in DeFi, and at the same time profit from this opportunity, without worrying about diminished yield due to the high gas cost of the ethereum network.

What happens next?

As for now, we will be continuing to build partnerships which will enable our users to use our liquid token more freely. This will include partnerships with lending and borrowing platforms, and also pools that will accept our liquid representative tokens.

Meanwhile, follow us on Twitter, Telegram and our Medium blog for the latest update.