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Liquid Staking Boost
Numoen allows for boosting liquid staking returns with a specialized use of PMMP
Proof of stake blockchains allow for the native asset to be staked and vote in consensus as a method of economic security. In return, stakers capture inflation and this staking rate sets the lower bound on the carry on the native asset much like the United States Federal Reserves sets the minimum rate of return on USD through the federal funds rate.
Staking usually requires a node that is voting on transactions and a large amount of capital. In order to decrease the barriers to entry as well as use the staked token in the composable decentralized finance environment, liquid staking derivatives are available. Liquid staking derivatives represent a receipt for staked native asset, with the voting delegated to another party.
Because of the inherent properties of liquid staking derivatives their exists an opportunity to boost returns by going long on staking token vs the underlying native asset. Numoen achieves this by utilizing PMMP and creating a Power Token.
Liquidity providing, where liquid staking token are pooled with the native asset and this position is lent LP position is lent out, is also great for boosting yields and less risky than taking on leverage. On top of earning funding, LPs also take on minimal losses in the case of a depegging event as the portfolio holds a sufficient amount of the underlying token.
Last modified 1mo ago