Fantom is introducing new staking tools that allow stacked assets to add liquidity to the markets. This marks the first time that stacked assets can become liquid, and used in the DeFi ecosystem. The new tools are powered by Band Protocol, which offers fully scalable oracle technology.
According to Fantom,
“Fantom users can now type sFTM, a synthetic asset, in a 1: 1 ratio to their delegated FTM, before using sFTM in the Fantom Finance ecosystem.”
Liquidity is the lifeblood of any market, and staking has created challenges for the crypto ecosystem. While staking allows pass holders to generate passive returns, it also takes tickets out of the market and increases the chance of low liquidity events.
Fantom CEO Michael Kong said,
“The launch of Liquid Staking marks a major step forward for the Fantom community. We believe it will play a vital role in demonstrating the speed of our network, and driving the use of fUSD. However, with such an important request, we know that malicious actors will try to attack and break things. That’s why we’ve chosen BandChain oracles to make sure Liquid Staking gets high quality pricing data. ”
Fantom Creates Liquidity Solutions
Many DeFi platforms require users to issue large tokens, such as Ethereum, in order to get proceeds from their tickets. While the development process of ETH 2.0 addresses this desire for passive income by adhering to a Proof of Stake (PoS) based system, DeFi’s arena also has a range of income-generating tools.
The problem is that when a token is stacked, it is effectively removed from the liquidity pools that allow for smooth price movements. By creating new ways to use stacked 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 said,
“Protocol Band is delighted to work with Fantom to provide a critical oracle infrastructure to secure an ecosystem of decentralized finance products starting with fMint and Staking Liquid live on Mainnet, in the production environment. Leveraging the Band Band scalability, we look forward to continuing our deep collaboration with Fantom to secure many more applications and products to come. “
Liquidity is the Blood of Life of Markets
One of the reasons why many investors think of crypto as a volatile asset is that the sector had very few active liquidity providers for many years. While this is changing, there is the DeFi ecosystem that requires a large amount of tickets to be locked for varying lengths of time.
Fantom has identified this as a major issue and has created tools that address the potential conflicts of interest that staking could have with a liquid market. As a tier-1 protocol, the new tools it has introduced will operate to add liquidity to the DeFi ecosystem.
Comprehensive Tools for a Growing Market
Fantom and Band Protocol have much to offer in DeFi’s development space. Their latest innovation will support FTM, fUSD, fGBP, fCNY, fEUR, fKRW, fJPY, fCHF, fBTC, fETH, fLINK, fBAND, fBNB, fGold, fSilver and fWTI at launch, and 176 assets will be added as the platform grows.
Fantom allows crafts to be settled in just seconds, and also offers ultra-low fees, as well as a great wallet that operates with a range of existing tools, such as MetaMask.
As the crypto and DeFi space grows, more advanced liquidity tools will be needed to keep the markets functioning as efficiently as possible.
The latest addition of the Fantom and Band Protocol to the DeFi space is a great start to ensuring stacked assets do not impact the overall liquidity environment, and is a starting point for the industry as a whole.