Fantom is introducing new staking tools that allow for staked assets to add liquidity to the markets. This marks the first time that staked assets can become liquid, and be used in the DeFi ecosystem. The new tools are powered by Band Protocol, which offers a fully scalable oracle technology.
According to Fantom,
“Fantom users can now mint sFTM, a synthetic asset, in a 1:1 ratio to their delegated FTM, before deploying sFTM within the Fantom Finance ecosystem.”
Liquidity is the lifeblood of any market, and staking has created challenges for the crypto ecosystem. While staking does allow token holders to generate passive returns, it also takes tokens out of the market and increases the chances of low-liquidity events.
Fantom CEO Michael Kong commented,
“The launch of Liquid Staking marks a big step forward for Fantom’s community. We believe it will play a crucial role in illustrating the speed of our network, and drive usage of fUSD. However, with such an important application, we know that malicious actors will be trying to attack and break things. That’s why we’ve opted for BandChain oracles to make sure that Liquid Staking is supplied with high quality pricing data.”
Fantom Creates Liquidity Solutions
Many DeFi platforms require users to stake major tokens, like Ethereum, in order to gain returns from their tokens. While the ETH 2.0 development process is addressing this desire for passive income by pivoting to a Proof of Stake (PoS) based system, the DeFi arena also has a range of tools to create income.
The problem is that when a token is staked, it is effectively removed from the liquidity pools that allow for smooth price movements. By creating new ways to use staked tokens to provide liquidity, Fantom and Band Protocol are working to ensure that the crypto markets remain as liquid as possible.
Band Protocol CEO and Co-Founder Soravis Srinawakoon stated,
“Band Protocol is thrilled to work with Fantom to provide critical oracle infrastructure to…