Adaora Anders
3 min readMar 29, 2021


Stafi: Liberating The Liquidity In Staked Assets Through rToken

Despite the significant reward linked to staking assets like ETH, DOT, ATOM and others, the liquidity struggles of the staking framework makes it discouraging.

With the liquidity staking of ETH 2.0 in progress, enthusiasm appears to be waning. Perhaps the frailty of the ETH 1.0 and its liquidity crisis are the culprits.

Staking has gone on for such a long time that tongues are beginning to wag. Beyond the wagging tongues and liquidity entrapment, ETH 2.0 is haunted by the slash issue where small amounts of ETH are deducted from one’s stake due to disconnection or validator challenges.

Stafi Protocol

The Stafi protocol has built a reputation for unlocking liquidity trapped in staked assets. Using validators, unique multi-signature addresses, and a staking contract, Stafi runs efficiently while making liquidity accessible to users.

For anyone looking to get in on the ETH staking, Stafi Protocol helps them actualize that through a staking contract. Besides not having to foot the cost of maintaining and running validators, the protocol ensures users can stake their ETH and reap the liquidity of their assets. It’s a classic case of eating your cake and having it.

The Role of rToken

To offer stakers access to the liquidity of their staked asset, Stafi Protocol uses rToken. The platform allows users to stake their ETH with rETH given to these stakers. Since these rETH tokens are tradable, stakers can always sell off theirs without going through the harrows of un-staking.

Stafi is a liquidity unlocking protocol, and the platform is looking to create an army of rToken that helps in actualizing its mission. With rETH tokens gradually gaining momentum, Stafi will bring forth other rToken like rDOT, rATOM, rKSM, and rFIS to the frontline.

Stafi’s rETH Solution

Liquid staking for ETH 2.0 isn’t the most seamless exercise, but the Stafi Protocol has a framework that’s ideal for the exercise. Through its protocol, stakers can avoid the financial implication of running a validator. Also, slash doesn’t happen due to the protocol’s setup.

Of course, Stafi doesn’t produce the rETH solution from thin air. The protocol’s rETH solution consists of multiple layers with delineated roles aimed at allowing users to stake their ETH in exchange for rETH tokens.

rETH Valuation

The value of the rETH token isn’t equivalent to the ETH. A combination of parameter is deployed to calculate what an rETH token is worth, ranging from the quantity of staked ETH to the number of rETH tokens issued. It’s complex arithmetic to be used by exchanges where the rETH tokens are listed.

With time, the rETH token will become tradable on Uniswap and balancer. Liquidity providers on these DEX platforms will have their effort rewarded in FIS tokens. Stafi is looking to expand the exchange listing of rETH tokens to CEX, and this should improve the value of these assets in the long-run.

To guarantee an upward trend in the valuation of rETH, Stafi is looking to expand its use into the asset borrowing and lending space. This way, you can use your rETH token to collect loans or lend them out for interest.

Stafi, A Secure Solution

To guarantee the safety of staked assets, Stafi uses 21 validators with highly reputable multiple-party computing, ensuring a specific number of validators have to work together to approve activities regarding the staking contract.

While issues of collusion can often be the case, the random selection of 16 validators and continuous changing of that number every 6 hours should suffice in preventing criminal tendencies.

Final Thoughts

Liquidity has often being taunted as the underbelly of staking. Through Stafi, this weakness is turned to strength. The protocol uses its rToken like rETH, rDOT, and others in salvaging the situation.

You can read up more of StaFi and rToken by visiting its website here: