Adaora Anders
3 min readOct 19, 2021

StaFi Redefines The Meaning of Passive Income

Liquidity mining provides a means to what we greatly desire: another income stream. Yet, most liquidity pools are highly utilized with little ROI no thanks to a grossly inadequate APY.

Without deviating from its major assignment — unlocking the liquidity within PoS chains — StaFi gets the passive income question right. Here’s how the DeFi protocol achieves such a feat in a crypto space filled with options.

Multiple Liquidity Pools

With the creation of an army of synthetic staking derivatives, StaFi gives POS chains some respite, providing stakers the opportunity to access their assets whenever they want — no time spent waiting till an unbonding is complete.

Thanks to StaFi’s growing number of rTokens, a multitude of liquidity pools are possible. And the DeFi protocol makes it happen through several partnerships with existing, first-rate yield farming and lending platforms.

For instance, you can lend rETH on Liqee, with a staking reward of 2.38%. Since rETH is a synthetic derivative provided on staking ETH through StaFi’s rETH app, you’re practically earning double rewards from a single underlying asset.

Variety is the spice of life, and StaFi agrees with the creation of multiple rTokens. The existence of other liquidity mining opportunities reinforces the many income streams availed by the Staking Finance protocol.

You can provide liquidity for the rETH/ETH pool on Curve Finance, earning FIS and CRV rewards for your input. That’s more reward generated from a staking derivative.

Modest/High APY

Another reason why StaFi protocol is a top contender for the most promising passive income is the high APY on offer. Anyone looking to earn high APY on synthetic derivatives will turn to StaFi over the competition.

On Curve Finance, you can add liquidity to the rETH pool with a flexible APY of 22% that includes 5.13% FIS rewards. You don’t often see such offers, but that’s what you get by staking your rETH token on Curve.

To enjoy this massive APY, you must be willing to stick around for the long haul as rewards pile up over time. Of course, you can unstake your LP tokens whenever you want. Thankfully, an impermanent loss shouldn’t be a problem as assets staked are nearly equivalent in value.

StakingDrop Campaigns

On launching new rTokens and rApps, StaFi organizes staking drops to incentive the early adopters. The early birds get the juiciest worms, and that’s applicable to the staking drop. It’s certainly a nice way to add another income stream, especially if you get in early.

From the staking drop hosted on imToken wallet to the many others hosted on StaFi’s many partners, the DeFi project’s offers have remained keenly contested for obvious reasons.

Validator Staking Reward

StaFi navigates the locked liquidity in POS chains using its customized staking contract that has validators contributing. Typically, there are rewards attached to validator activity, which encourages these entities to stay the status quo of an efficient set-up.

Currently, the average validator staking reward is 19%, which is massive compared to what you’d get elsewhere. The inflation rate is 4.47%, so validators are certain to break even and more through this route.

Expectations Going Forward

StaFi promises to create more liquidity mining opportunities for rTokens, including use cases for synthetic staking derivatives. If this happens, more income streams are certain. rToken holders can earn even more from their synthetic derivatives.

A legion of rTokens is only as good as their earning potential, which is what StaFi is fixated on achieving. Will the liquid staking solution break the jinx and put rTokens on the path towards DeFi glory? It’s only a matter of time before we find out.


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