12 Questions to Fully Understand the Full-Chain LST Protocol StakeStone
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12 Questions to Fully Understand the Full-Chain LST Protocol StakeStone
StakeStone leverages STONE (yielding ETH tokens) to bring native staking yields and liquidity to Layer 2 networks.
Navigating Web3 tides with focused insightsAuthor: Bob Cong
Binance Labs has announced an investment in StakeStone, a cross-chain liquidity distribution network. StakeStone leverages STONE (yield-bearing ETH token) to bring native staking yields and liquidity to Layer 2 networks. This article attempts to comprehensively understand the fundamentals of the StakeStone project through 12 questions.
1. Which sector does the project belong to, and what are similar projects?
The StakeStone project belongs to the liquid staking sector, particularly within the context of decentralized finance (DeFi) and Ethereum Layer 2 solutions. Projects in this space focus on providing liquid staking services that allow users to stake their crypto assets (such as Ethereum) into various protocols to earn staking rewards while maintaining asset liquidity. Similar projects to StakeStone include Lido, Rocket Pool, among others. These projects all offer liquid staking services but differ in features and mechanisms. StakeStone’s uniqueness lies in its cross-chain liquidity market and OPAP mechanism, enabling broader use cases and yield opportunities for users.
2. What key problems does the project aim to solve?
The StakeStone project primarily addresses how to provide optimized liquid staking yields and cross-chain liquidity solutions in a decentralized environment. Specifically, it offers innovative solutions to the following core issues:
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Liquidity vs. Yield Balance: Traditional staking often results in loss of asset liquidity, as staked assets are locked and cannot be used elsewhere. StakeStone introduces the concept of Yield-bearing ETH, allowing users to earn staking rewards while retaining asset liquidity.
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Cross-chain Compatibility: With the growth of multi-chain ecosystems, users need efficient ways to move and manage assets across different blockchains. StakeStone enables seamless asset and price transfers across multiple chains by building a multi-chain liquidity market based on STONE.
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Automated Yield Optimization: Users may lack the expertise or time to continuously optimize their staking strategies. StakeStone’s OPAP (Optimizing Portfolio and Allocation Proposal) mechanism automatically adjusts underlying asset allocations to ensure users receive optimal staking returns.
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Transparency and Security: In the DeFi space, transparency and security of underlying assets are crucial. StakeStone provides full asset and yield transparency through a decentralized, non-custodial architecture, ensuring the safety of user funds.
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Simplified Integration and Adoption: For Layer 2 developers, integrating liquid staking solutions can add complexity. As a non-rebasing OFT (Omnichain Fungible Token) built on LayerZero, STONE can be easily integrated by Layer 2 developers without additional technical overhead.
3. What are the project's core functions and operational principles?
The core function of StakeStone is to provide a cross-chain liquid staking protocol that allows users to participate in staking on Ethereum and other blockchain networks using its native Liquid Staking Token (LST)—STONE—while preserving asset liquidity and yield potential. Below are StakeStone’s main features and operational principles:
Core Functions:
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Liquid Staking: Users can stake ETH or other supported assets into StakeStone to earn staking rewards. These assets are converted into yield-bearing ETH or other forms of LSTs, which represent the user’s staked assets and corresponding yield rights.
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Multi-chain Compatibility: STONE is built on LayerZero, meaning it can seamlessly transfer across multiple blockchains, offering users cross-chain liquidity solutions.
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Automated Yield Optimization: Through the OPAP (Optimizing Portfolio and Allocation Proposal) mechanism, StakeStone automatically adjusts and optimizes underlying asset allocations to ensure users achieve the best possible staking returns.
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Non-Custodial and Transparent: StakeStone’s architecture is non-custodial; all transactions and asset states are publicly verifiable, ensuring full user control and transparency over their assets.
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Easy Integration: For Layer 2 developers, STONE can be easily integrated into their platforms without complex setup or additional technical requirements.
Operational Principles:
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Staking and Conversion: Users send ETH or other assets to the StakeStone protocol, which are then converted into corresponding LSTs (e.g., STONE tokens). These tokens can be used across other DeFi platforms or applications while users continue earning staking rewards.
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OPAP Mechanism: OPAP is an innovative feature of StakeStone that allows the protocol to automatically adjust its asset allocation based on market conditions and strategy performance. This means STONE holders can automatically receive optimal staking yields without manual management.
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Cross-chain Liquidity: As a LayerZero-based OFT, STONE supports cross-chain liquidity, enabling assets to freely move between different blockchain networks and providing users with broader market opportunities.
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Reward Distribution: Staking rewards (including transaction fees, governance rewards, etc.) are periodically distributed to STONE holders, either as direct token distributions or reflected in increased STONE value.
Through these features and principles, StakeStone aims to deliver an efficient, flexible, and yield-maximized staking platform, while advancing the development of DeFi and cross-chain liquidity.
4. What technological innovations does the project have? What are its core advantages?
Technological Innovations:
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Optimizing Portfolio and Allocation Proposal (OPAP) Mechanism: An innovative feature of StakeStone that enables automatic optimization of underlying asset allocations to ensure users receive optimal staking returns. The OPAP mechanism uses algorithms and smart contracts to dynamically adjust asset distribution in response to market changes and performance across different staking pools.
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Non-Custodial and Transparent: StakeStone offers fully non-custodial services, with all staked assets and rewards managed by smart contracts, ensuring complete transparency of underlying assets and earnings. This design enhances security and reduces trust costs.
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Cross-chain Liquidity: STONE tokens built on LayerZero support seamless asset and price transfers across multiple blockchains. This cross-chain compatibility provides great flexibility for developers and users to move and utilize assets across different blockchain ecosystems.
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Multi-chain Liquidity Market: StakeStone has established a multi-chain liquidity market based on STONE, offering users more use cases and yield opportunities—not only from staking rewards but also from participation in other DeFi activities.
Core Advantages:
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Maximized Yields: Thanks to the OPAP mechanism, StakeStone ensures users achieve maximized staking returns without requiring them to manually manage complex asset portfolios.
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User Experience: StakeStone emphasizes user experience with simplified workflows and intuitive interfaces, making it accessible even to DeFi beginners.
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Security and Trust: Its non-custodial nature and high transparency enable users to fully trust the system and track their assets and earnings in real time.
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Cross-chain Capability: The cross-chain functionality of STONE tokens gives users broader investment opportunities, allowing them to leverage the strengths of different blockchain networks.
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Easy Integration: For Layer 2 developers, the ease of integrating STONE lowers technical barriers, enabling more projects to quickly adopt StakeStone’s liquid staking services.
5. What is the overall business model, and who are the target users?
Key Components of the Business Model:
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Liquid Staking Services: StakeStone allows users to stake crypto assets (like ETH) into various blockchain networks while receiving corresponding liquidity tokens (e.g., STONE), which can be traded on markets or used in other DeFi services.
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Yield Optimization: Through the OPAP mechanism, StakeStone automatically optimizes users’ staked asset allocations to maximize returns. This service may charge fees, serving as one of the project’s revenue sources.
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Cross-chain Liquidity: The cross-chain nature of STONE tokens enables StakeStone to provide liquidity services across multiple blockchain networks, potentially involving cross-chain transaction fees or related service charges.
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Ecosystem Development: StakeStone may collaborate with other DeFi projects by providing liquidity, staking services, or financial products to jointly build a more robust DeFi ecosystem.
Target User Groups:
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Crypto Investors: Individual investors seeking passive income through staking crypto assets who may want to simplify the staking process via StakeStone’s automated services.
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DeFi Users: Users interested in decentralized financial products who are looking for yield opportunities beyond traditional lending and liquidity mining.
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Layer 2 Developers: Developers needing to integrate liquid staking services into their Layer 2 solutions, who can leverage StakeStone’s easy integration to attract and retain users.
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Institutional Investors: Large investment funds or institutions potentially interested in stable and optimized yield-generating liquid staking services.
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Cross-chain Asset Users: Users who wish to seamlessly transfer assets between different blockchain networks and can leverage STONE’s cross-chain capabilities to achieve this.
6. What are the project’s primary revenue sources?
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Staking Service Fees: As a liquid staking protocol, StakeStone may charge a fee percentage when users stake their assets. This is a typical DeFi platform revenue source, similar to transaction or management fees.
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Restaking Revenue: StakeStone supports restaking, allowing users to re-stake their liquid staking tokens (e.g., STONE) for additional yield. The project may take a cut of restaking service fees during this process.
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Cross-chain Liquidity Service Fees: Since STONE is a LayerZero-based OFT supporting cross-chain liquidity, StakeStone may charge fees for cross-chain asset transfers.
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Partnerships and Integration Services: StakeStone may partner with other DeFi projects or blockchain applications, providing liquidity support or integration services in exchange for fees or revenue sharing.
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Governance and Voting Rights: Under a decentralized autonomous organization (DAO) model, StakeStone token holders may participate in governance decisions, and the project could receive funding through governance proposals.
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Tokenomics Model: StakeStone’s token economic model may include issuance, buyback, and burn mechanisms, whose implementation could indirectly affect project revenue.
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Liquidity Mining Rewards: If StakeStone implements a liquidity mining program, it may collect a portion of trading fees or other rewards from liquidity providers as revenue.
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Technical Service Fees: For APIs, SDKs, or other technical solutions provided to other projects or developers, StakeStone may charge technical service fees.
7. How is the project token distributed, and how is it unlocked?
Not yet disclosed
8. What are the use cases for the project token? Are there staking or token burn mechanisms?
Not yet disclosed
9. Who are the founding team members, and what are their backgrounds?
Not yet disclosed
10. What is the project valuation, funding amount, and key investing institutions?
Not yet disclosed
11. Current user count, trading volume, revenue, TVL, and other metrics?
TVL has reached $1.2 billion
12. What is the token circulation, trading volume, and which exchanges is it listed on?
Not yet disclosed
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