xToken <> Flashstake: A New Era of Liquidity Pools and Instant Yield

xToken has recently announced a strategic partnership with Flashstake, a decentralized protocol that enables users to receive instant yield on deposited assets by locking up principal for a chosen duration. Through xToken Terminal, Flashstake has deployed twelve new liquidity pools with a variety of configurations, enabling their protocol’s unique use case and delivering compelling yield opportunities to DeFi users.

What is xToken Terminal?

xToken Terminal is a permissionless investment bank. We provide seamless access to the kinds of fundamental on-chain primitives that all projects will need during their lifecycle.

Instead of allocating weeks or months to dev work building and testing custom solutions, projects using Terminal can deploy a Uniswap V3 liquidity mining program or a complex token program, for example, in a matter of minutes. Our highly configurable smart contract architecture and deep investment in UX empowers projects big and small with the key on-chain solutions necessary to bootstrap a protocol.

Flashstake’s Innovative Approach to Upfront Yield

Flashstake, developed by Blockzero Labs, provides a unique mechanism called Time Vaults that allows users to earn the future value of their money upfront. By choosing the principal amount, token type, and stake duration, users instantly receive the future yield while their principal is locked in the smart contract. This innovative approach not only ensures users’ funds are 100% collateralized but also eliminates the risk of liquidation.

Flashstake allows its users to lock in and get upfront yield on assets like GLP or stETH, which can then be used for no-liquidation leverage. As an example, a user can lock up their GLP for six months for a fixed APR of 37%, receiving the yield for the entire six months upfront.

At the core of Flashstake’s protocol is the FLASH token, which consolidates time fees generated from each stake. The fees are sent to the Flash Capacitor, and FLASH tokens are required to unlock these fees, making the token an essential part of the ecosystem.

Flashstake’s Liquidity Problem

Flashstake’s Time Vaults work by taking deposited assets like GLP or stETH from users and depositing them into underlying protocols like GMX or Lido Finance with the yield being streamed block-by-block into the Yield Pool.

Using an example to explain this further, if the Lido underlying yield rate is 6% and $1M worth of stETH has been deposited, this means $60,000 (6% of $1M) worth of stETH is generated over a 1 year timeframe (or $164 worth of stETH per day). Assuming the instant upfront yield rate for stETH accepted by the market at Flashstake is 4%, this means that the yield pool can accommodate $4,000 worth ($164 is 4% of $4,000) of new stETH Flashstakes per day with the instant yield paid from the yield pool for the associated Time Vault.

This system is self-sustaining only once sufficient assets have been deposited into the Time Vault. Flashstake, therefore, had a liquidity bootstrapping problem they needed to solve. Flashstake needed some way to jump start this system to ensure their Time Vaults reached this self sustaining state.

Enter xToken Terminal.

LM Incentives, Powered by Terminal

xToken Terminal gives DeFi and NFT projects seamless and permissionless access to financial primitives, without writing a single line of code. Terminal’s Mining app allows projects like Flashstake to easily and securely deploy complex liquidity mining campaigns in a matter of minutes, saving them time and money and allowing them to focus on their core business.

The partnership between xToken and Flashstake introduces a variety of liquidity pools, including:

These pools provide users with an array of options to leverage their assets and earn instant yield with the power of Flashstake’s protocol.

But how?

Continuing the example from above and taking the fstETH-B8C6/USDC token pair currently incentivized at xToken Terminal, Flashstake is now able to pay instant upfront yield from liquidity providers which effectively makes the instant upfront yield rate tradeable, via Time-Based-Derivatives (TBDs).

The fstETH-B8C6/USDC position incentivized has a concentrated liquidity range between 85.8138 and 233.254 USDC per TBD (fstETH-B8C6). This effectively means that liquidity providers are incentivized to provide upfront yield liquidity at a rate between 4% and 11% APR on the Flashstake Dapp.

Participating liquidity providers earn Flash token as emissions as well as a 1% fee on each trade performed within the concentrated liquidity range (this includes interactions with the Flashstake Dapp). The current APR via Flash token emissions is 359% as shown in the table above.

As xToken and Flashstake join forces, they pave the way for new growth opportunities in DeFi, empowering users to benefit from instant yield and experience the “time travel of money.” This partnership signifies a significant step towards a more accessible and versatile decentralized financial landscape for all.

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