DeFi staking software as a platform allows users to stake their crypto assets and earn rich rewards. With their bespoke DeFi staking platform development solutions, businesses can gain traction.
The world of finance is undergoing transformation thanks to decentralized finance powered by the blockchain. This revolutionary technology has gained traction over some time with businesses waking up to its greater benefits in serving their diverse requirements. Moreover, DeFi has proved to be beneficial in accelerating digital development by creating seamless financial experiences. However, users need to find more ways to leverage the multiple blockchains together to fully realize the potential of DeFi. One of the trends creating waves in the DeFi space is the DeFi staking concept which promises to provide better yields in comparison to other traditional investments and mining options.
In this blog, we would focus on how DeFi staking differs from the traditional borrowing and lending ways, its benefits, features to add to the platform, and also the importance of hiring the best development partner for a robust, secure DeFi staking platform.
DeFi staking: a sustainable way to generate passive income
The spike in the number of decentralized finance wallets, crossing more than 3, 00,000 on Ethereum has further heightened the popularity of the staking concept. With income generation being the prime focus of many crypto service providers and protocols, staking has emerged as the hot favorite with cryptocurrency holders. Moreover, given that the POW (proof-of-work) model is not a highly workable model for blockchain, most developers are readily shifting to the POS (proof-of-stake) consensus. Furthermore, with billions of assets being invested in DeFi platforms, the demand for staking platforms has also picked up the pace. Those looking to tap into the limitless possibilities presented by the billion-dollar staking market need to dive deep into the concept and understand the features and benefits.
DeFi Staking: Different from conservative borrowing and lending
DeFi Staking allows businesses building networks on diverse blockchains to engage and interact through consensus-driven networks such as the Bitcoin Core (BTC), Ethereum Classic(ETC), Qtum, etc. With the help of the DeFi staking platform, users can reap rich rewards in the form of incentives with the aid of tokens. It lets users create a better incentive system whereby they can contribute their funds to maintain these staking platforms and also have complete authority and privacy for the financial information shared. The concept of DeFi staking has several parallels with cryptocurrency mining given that it too allows users to be on the same page with context to staking their tokens or cryptos as a way to generate more incentives. It incentivizes them to participate in the process.
DeFi Staking and its different forms
Let’s take a sneak peek into the different staking platforms as mentioned below:
In this form of staking, crypto-asset holders can lock up a fixed amount of crypto assets to turn into a validator in the Proof – of – stake (Pos) consensus-driven blockchain network.
In contrast to the Proof of work (Pow) that requires transaction validation with computation, the staking runs on the POS depending on validators for payment validation. Hence, the validators have to be careful when dispensing their duties as they face the severe risk of losing a part or maybe the whole of their funds. Validators can also receive incentives or rewards for validating the blocks. Ethereum is one of the most popular PoS blockchains, followed by some other networks such as Polkadot and the Graph.
It is with the rise of yield farming that the true potential of decentralized finance was realized and also fully understood. It allowed crypto holders to move their multiple digital assets over the DeFi staking platforms to yield optimum gains and profits. Cryptocurrency holders can contribute their funds and stake assets on the lending protocol or the liquidity pool. This can help them monetize their assets and get good interest too on the part of the revenues generated by the DeFi staking platform.
The sub-category of yield farming involves storing the digital assets and tokens in the liquidity pools. Crypto traders are empowered by these pools to trade without the need for third parties engaged in a type of Decentralized Exchange (DEX) known as Automated Market Maker. There are two assets in a liquidity pool constituting the trading pair and it is the liquidity provider who impacts the entire system as it is who adds the digital assets to the liquidity pool.
Features To Include in DeFi Staking Platform
The features you select for your DeFi staking platform rely heavily on the type of staking model picked by you and also the type of services you would want to render to your users. The list of features shared below will help you understand the type of features you should choose for developing an exceptional DeFi staking Platform Development.
It is not always easy to know in detail the DeFi protocols. Furthermore, if the UI is complicated then the users too can move away from using the staking platform. Hence, it is important to pick the right interface and ensure that it is user-friendly and at the same time favorable. Users should be able to manage their private keys, earn income with the reward generating systems and also handle the complicated wallet quite effortlessly with the help of a well-developed DeFi staking platform. Moreover, ensure that the sign up process is quite simple for picking the right assets for staking at the liquidity pools.
Provide information on supported assets and their security
Security of the assets supported by the DeFi platform is a critical factor when choosing to develop a DeFi staking platform. It is all the more important to give priority to the protection of assets since DeFi platforms are not subject to any regulations. Moreover, the rising numbers of DeFi platforms have also prompted users to look out for the most efficient platforms in order to avoid any disruptions. Auditing the smart contracts and inspecting them is the wisest thing to make your Defi platform for staking safe.
The prime focus of crypto-asset holders and liquidity pool fund contributors is to make good profits so the most important point of consideration for them would be the profitability quotient of these DeFi staking platforms. While some have set amounts, a few give out calculated rewards depending upon the different DeFi market conditions. The rewards are often calculated based on the coins shared by the crypto staking individuals and those already shared in the network. The inflation rate, as well as the time duration of the staking period, are also major determinants of the rewards. Embedding an easy-to-use rewards calculator tab on the user interface can help stakers calculate the rewards they are eligible to receive.
When developing the DeFi staking platform, make sure that you think about the payouts since it is one of the most lucrative features for any platform to attract good crypto investors. Lay down a remarkable payout schedule and also share information on the withdrawal route for users to have clarity on how and when they can receive their reward share. It is recommended that a transaction history tab be added to the interface to allow users to track their past activity.
Investment benefits of DeFi staking platform
Cryptocurrency investors and holders can make huge gains by staking their cryptos without having any ether or bitcoins largely for the series of advantages these DeFi staking platforms offer.
Ø The framework of a Decentralized Exchange (DEX) blockchain network is built on the proof-of-stake rather than on the proof-of-work consensus mechanisms to render absolute security. Each block is validated with the PoS network.
Ø DeFi staking platform provides comprehensive transparency for users when participating in transactions with every detail on the transaction history being protected with robust end-to-end encryption features such as DDoS protection HTTP authentication among others.
Ø Investors can earn great passive income by staking tokens or locking tokens in smart contracts.
Ø DeFi staking platforms are equipped with multi-level, high-grade security features as they are built on smart contracts that help them to avert hacking and prevent cyber thefts.
Ø DeFi staking platform customers can reap rich rewards even though they may not have big and sizeable investments on the platform
Ø These platforms can be scaled up and have the flexibility to let users carry out quick and secure transactions
Ø Users are empowered to give their approval vote for executing transactions when they lock up their stakes
Ø Crypto stakers can earn higher interest rates for staking with DeFi tokens
Users on the DeFi staking platform can earn passive income by holding their cryptocurrencies. Stakers picking up the staking-as-a-service software have access to security measures such as encryption keys and also have backups if the hard drive with all cryptos residing in it acts in a funny manner. This software prevents hacks, thefts and also has no impact on the trading activity you can do with your coins since these services also provide access.
Ways to Reward Users
DeFi staking platforms is an exciting new technique under decentralized finance to allow cryptocurrency holders to stake their assets and earn money. Being a developer of this platform, you could choose the payouts and compensations for contributors. You can either provide them with tokens or also compensate them in bitcoin core (BTC). Here are some other choices that DeFi staking platform developers can pick up from when designing the incentives plan of their platform.
Incentives to validate
Users will earn rewards for validating the blockchain and the reward is directly proportional to the crypto assets of the users. Users with higher crypto assets will have more validation tasks and better rewards.
Incentives to lock in assets
Users on the DeFi staking platform are encouraged to store their assets on the platform. Incentives are calculated depending upon the duration for which users have locked in their assets. The assets locked in the platform are also an important feature so higher valued accounts would translate to more amounts sent directly into the user wallets as incentives.
Incentives in the form of fund management assistance
The fund manager participates in this form of incentive plan for the user and he operates on the DeFi staking platform with good capital. His main task is to reinvest the profits earned from the platform into much more lucrative projects and also give those back to users as dividends. In this incentive scheme, users can not only use their passive income to multiply but they can also get access to advisory services for their projects without spending money.
As the DeFi staking platforms provide a new channel to earn good income from staking cryptos, new investors and more crypto traders are getting excited by its promises. Users on the staking platform can stay hooked on the blockchain network for a longer period of time as validating nodes are required to invest a certain amount of assets to validate the blocks. With the popularity of the DeFi staking platform growing exponentially, the attention is also likely to move away from Bitcoin’s Proof of Work (PoW) powers to the Proof of stake(PoS) consensus in the longer run. Moreover, the PoS is a more secure, user-friendly, economical, and also environmentally more sustainable model than the PoW.
With trends in the blockchain domain showing rapid growth of the PoS blockchains, the DeFi staking certainly holds a promising future. The development of rich-feature-laden DeFi staking platforms or even its integration in the existing blockchain-driven platforms can attract more global crypto holders.
Prolitus’s DeFi Staking Platform Development Can Help You Reap Rewards
The expert team at Prolitus delivers bespoke solutions designed by proficient blockchain developers working in tandem with the subject matter experts to help you make the most of DeFi staking platforms development. We are a mission-driven development company with the objective and required expertise to develop DeFi staking software that combines world-class features and delivers high-grade security.
If you are looking to develop your own DeFi skating platform, then get in touch with us and we would be happy to collaborate with you on this.