Avalanche, Polygon, and Solana were standout names from the 2021 crypto boom. However, Terra surpassed everyone’s expectations. The platform rose from obscurity into prominence and is currently the second-ranked blockchain in terms of the total value locked. Terra has a TVL of $23.76 billion, behind Ethereum’s $117.1 billion.
Terra’s growth can be linked to the progress of some of its top projects, such as Anchor and Stader. Both protocols offer users high DeFi yields. However, in this article, we’ll look at Stader’s LUNAx and how it fits into the Terra ecosystem.
Stader is developing a critical gateway infrastructure that will enable token holders to stake their assets among validators on proof-of-stake (PoS) networks in a convenient and secure manner.
Staking on most platforms encounters a series of challenges. Stake and voting power in PoS networks are now concentrated among the top validators. In addition, their existing staking infrastructure is not designed to be decentralized. Validators in the mid to long-tail struggle to recruit delegations. This results in a high validator turnover.
Stader provides a solution by making it simple for delegators to stake with several validators. Furthermore, Stader groups validators based on essential features. These features include uptime, slashing history, and community activity in its Stake Pools.
What Is LUNAx?
Stader is a non-custodial, smart contract-based staking platform, and staking is one of the key parts of its community. Stader’s main goal is to make staking easier for Terra users while providing the best risk-adjusted yield.
Liquid staking is one of the solutions Stader provides the Terra ecosystem. Liquid staking involves receiving a receipt token after staking an initial token. In this case, users receive LUNAx after staking the LUNA token. Also, users can use the receipt token to earn yields on another platform.
LUNAx is an auto-compounding accrual token that users can mint using Stader’s liquid staking pool. According to a Stader blog post, about 16K unique wallets have minted LunaX using Stader’s liquid staking. The token allows for immediate unlocking of staked Luna and unlocks a wave of new possibilities for DeFi protocols.
LUNAx offers users the following benefits:
- Consistent airdrop rewards
- Opportunities for instant liquidity and yield enhancement
- Auto-compounding Luna and stablecoins
LUNAx Token Mechanism
In terms of minting the token, users have to stake with the Stader liquidity pool to mint the token. Also, in terms of its value accrual, the profits generated on the staked Luna, even stablecoins, would be restaked at periodic intervals. In addition, since the supply of LunaX does not increase as the awards accumulate, the price of LunaX rises in relation to Luna.
Furthermore, LunaX supply remains unchanged in the event of a slash; the price falls as the number of Luna staked decreases. In addition, holders of the LUNAx will receive airdrops from time to time. Stader will take weekly snapshots of holders at random and give them airdrops like ANC, MIR, VKR, MINE, etc.
LUNAx to Provide Opportunities
LUNAx will provide a world of opportunities for both of its holders. Also, Like other tokens, LUNAx will have a liquidity pool that will offer various rewards to participants. Furthermore, users will receive SD token rewards, swap fees, and additional DEX incentives if they provide liquidity to the pools.
As part of its plans for growth, LUNAx will offer leveraged staking. This means that users can utilize LUNAx to borrow Luna multiple times and gain staking incentives and airdrops based on how many times they leverage. In addition, users can leverage LUNAx to borrow other assets, including UST.
The Way Forward
Stader has plans to integrate LUNAx with other platforms outside Terra. Furthermore, Stader is in touch with several MM protocols and DEXs across Solana Fantom, aiming to integrate LunaX. The staking platform shares a long history with Solana. Stader was one of the winners of the Solana Season Hackathon in June ’21. Also, Solana Foundation was one of the earliest partners and backers of the project. Stader plans to build a full suite of staking products on Solana. In addition, the platform will roll out these features in stages.
Stader’s LUNAx will be a driving force in the Terra community and other platforms. With liquid staking on Terra, users can expect a different level of experience.
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