The First Staking Derivative of Polkadot, rDOT is Live
For Polkadot stakers, the news of the launch of rDOT App has been long-awaited, and for good reasons: they can finally bid farewell to the liquidity crisis that has negated DOT staking.
rDOT token is a synthetic derivative of DOT, which is given to stakers of DOT who uses the rDOT app. The digital asset mimics the DOT considerably.
Why Is rDOT Solution Important?
Staking DOT on Polkadot blockchain comes with a 28-day unlocking period. And should you desire the use of your staked DOT for whatever reason, you’d have to wait for 28 days to access the token. This often is one of the major disadvantages of locked liquidity assets.
Thankfully, StaFi protocol’s introduction of the rDOT product removes these inconveniences without throwing away the baby and bathwater together. rDOT is released on staking DOT through StaFi protocol. The staker can proceed to trade the synthetic derivative or just keep it (consider it the proof of your staking).
Another reason why StaFi protocol’s rDOT solution is crucial in the scheme of things is it guarantees maximum ROI on staking. This is much better than spending valuable time learning the ropes of NPOS just to get higher rewards.
rDOT solution also removes the inconveniences linked to the Polkadot chain where validators have to claim rewards else stakers get nothing. On Polkadot staking, stakers are expected to claim rewards within 84 days, else they get destroyed. By staking through the StaFi rDOT solution, stakers don’t have to worry about this deadline as rewards are claimed automatically.
Though a synthetic derivative of the DOT, the rToken you get for staking your DOT on StaFi protocol’s staking contract is given based on an intricate process.
Surprisingly, rDOT isn’t valued based on the DOT token alone. The exchange rate of the rDOT takes into consideration the number of DOT in the staking contract and a host of other factors. It doesn’t depend solely on the price of the DOT token.
The Role Of The Original Validators
StaFi protocol uses validators for its staking contract to guarantee a seamless staking operation. For rDOT solution to thrive, the Original Validators (OV) manage nodes affiliated to the mainnet, ensuring the accuracy of the staking exercise.
Considering the human input, there’s always going to be doubts regarding the effort of OVs. StaFi is looking to cherry-pick official OVs based on the performance of the entire lot. This way, only the best get the position. With great power comes great responsibility it seems.
What Are The Financial Implications Of rDOT Solution?
Besides the numerous gains of staking your DOT through StaFi protocol’s staking contract, there aren’t a lot of financial implications.
While it’s tempting to add a minting cost for minting rDOT, StaFi hasn’t gone down that route. Perhaps it’s all based on the rDOT solution being relatively new to the scene. Or StaFi is just being good-natured?
One of the ways StaFi and OVs get rewarded for their effort is through the commissions accrued from staking DOT for stakers on the Polkadot chain. It’s a substantial 20% of the earned rewards, and this is shared between the protocol and OVs.
Well, 20% isn’t cheap, but if the protocol helps you maximize your staking rewards coupled with the opportunity to unlock liquidity, then it’s certainly worth the effort.
There’s also the 0.2% service charge for the redemption of rDOT. It’s a small price to pay for using well thought-out StaFi staking contract.
With rDOT solution going live, more users can stake their DOT having zero knowledge on the workings of the NPOS consensus. StaFi has outdone itself in this regard. And when you remember the rATOM solution will be released in the next two weeks, you’d wonder if they ever take a break. StaFi Protocol is simply amazing!
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