On July 10, 2024, Coinbase announced that Stader (SD) would be included in its listing roadmap, and shortly after, SD landed on the Bitget exchange, with a value rapidly rising to a peak of 0.8877 USDT. The current trading price is stable at 0.78 USDT, with a price surge of over 98% in the past 24 hours.
It is reported that on May 30th of this year, Stader announced an important token economics reboot plan, with the most market attention being on the destruction of 20% of the total supply, which is 30 million SD, thereby reducing the circulating token quantity.
In addition, Stader will also use 20% of its quarterly revenue to repurchase SD tokens and adjust the reward mechanism to promote the rapid growth of Total Value Locked (TVL).
From the current market performance, it is evident that the optimization measures of the SD token economic structure have achieved good results. What will the next development of the entire ecosystem be, and can the long-term value of SD be anticipated?
01. Advanced Non-Custodial Smart Contract Platform
Stader Labs focuses on providing convenient staking solutions and maximizing user staking rewards. The platform, through its full suite of DeFi products, including simplified one-click staking solutions, allows users to easily invest in multiple validators, thus leading the future direction of staking.
With Ethereum transitioning from Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism, the network's energy efficiency, scalability, and accessibility have significantly improved. While the PoS mechanism reduces the hardware requirements to become a validator, the high staking threshold and long-term lock-up of assets limit the flexibility of user participation in the digital asset ecosystem. To address these challenges, Stader has developed a liquidity staking solution that allows users to concentrate assets without meeting all staking requirements and mint tokens representing staked assets, the value of which grows with staking rewards.
Stader's innovation is not only reflected in its technical implementation, but the platform has also deployed smart contracts on seven Proof of Stake networks, including Ethereum, Polygon, Hedera, BNB, Fantom, Near, and Terra 2.0. Each of these networks has dedicated staking contracts, allowing assets to be transferred to network validators.
On the Ethereum network, Stader offers two types of pools: permissionless and permissioned pools. Permissionless pools allow any user to operate a node with just 4 ETH and the equivalent of 0.4 ETH in Stader tokens (SD), while permissioned pools include selected, stable-performing validators. Additionally, Stader is also developing pools based on Distributed Validator Technology (DVT), which, once stable, will significantly reduce slashing risks and increase the security and decentralization of the network.
Stader's liquidity staking tokens have been integrated with various DeFi protocols such as Curve Finance, Balancer, Uniswap, Aave, and Beefy, expanding users' operational options in the DeFi ecosystem and enhancing user experience. Validators use staked assets to validate blocks and earn rewards, from which Stader extracts a 10% fee.
In addition to providing staking and liquidity solutions, Stader also emphasizes the multi-purpose use of its tokens, including governance, lending, and liquidity restaking, increasing user participation incentives and the staking attractiveness of the network. Through a Decentralized Autonomous Organization (DAO) format, SD token holders can participate in important governance decisions, such as the issuance of new tokens.
02. SD Economic Model Deconstruction
Stader (SD), as the utility and governance token of the Stader Labs ecosystem, is an ERC-20 token with a total supply of 120 million. The design of the SD token revolves around increasing its utility and participation, supporting the sustainable growth of the ecosystem.
The main applications of the SD token include:
Node Operation Support
Node operators need to stake SD tokens to participate in the secure and stable operation of the network, which also provides them with the opportunity to earn rewards.
Incentive Mechanism
SD token holders can lend their tokens to earn additional SD tokens as incentives and receive a 10% return from the deposits of node operators.
Token Economics
Stader Labs has introduced $xSD, a new mechanism that allows SD token holders to stake SD to obtain $xSD. $xSD holders will share a certain proportion of protocol income and have governance rights.
Buyback Mechanism
The protocol will use a certain proportion of income to repurchase SD tokens and stake them as $xSD to support the market.
Despite transparency issues, the Stader Labs team has committed to increasing transparency regarding the treasury address, token issuance rate, and income in the future. Additionally, the launch of ETHx and integration with the EigenLayer network heralds Stader's continued expansion in the liquidity staking field.
Industry experts believe that the SD token plays a core role in Stader Labs' development strategy, driving the growth and stability of the entire ecosystem through various mechanisms and strategies. As the ecosystem continues to mature and expand, the SD token is expected to continue to appreciate, bringing long-term returns to participants.
Conclusion
As a vibrant ecosystem, Stader has established partnerships with many leading venture capitalists in the industry, such as Pantera Capital, Coinbase Ventures, and Huobi Ventures, further proving the market attractiveness and potential value of its platform and solutions.
Stader Labs is not just a driver of liquidity staking; it is also a bridge connecting traditional staking and the modern decentralized financial world, providing innovative solutions for a wide range of user groups to participate in blockchain network security and ecosystem development.
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