The blockchain space is teeming with various infrastructures designed to make blockchain-based activities as seamless as possible. Some, such as Polygon, are scaling solutions that address blockchain scalability issues.
A blockchain infrastructure could be a staking solution that allows individuals to stake their tokens, institutions to become validators, and blockchain platforms to run nodes.
Currently, various staking solutions are available, one of which is the liquid staking concept, which is intended to address the liquidity issues associated with PoS networks.
This article examines the Chorus One infrastructure and its exciting features. We also explore the concept of liquid staking and its advantages.
What is Chorus One?
Chorus One is a blockchain infrastructure that provides individuals and institutions with staking solutions. It is at the forefront of helping individuals and organizations “securely increase their crypto holdings by participating in decentralized networks.”
Proof-of-Stake networks depend on validators and stakers to function effectively. Validators verify transactions, while stakers delegate their tokens to validators to be bound to the network.
The Chorus One blockchain infrastructure offers Whitelabel staking and liquid staking services. The Whitelabel staking service allows institutions with more than $10 million to create customized nodes and run them on any network they want while offering their staking services to other users.
The liquid staking service allows regular crypto enthusiasts to stake their tokens with Chorus One to earn returns while having access to liquidity.
It runs nodes for multiple networks, including Solana, Cosmos, Ethereum, Lido, NEAR, Osmosis, The Graph, SKALE, Polkadot, Avalanche, Chainlink, Wormhole, Stargaze, Mina, Kava, Regen, Agoric, Akash, Oasis, Vega, Tezos, Persistence, Sommelier, Band, Secret Network, Celo, Juno, Kusama, Injective, and so on.
The expected annual returns that Chorus One offers users that delegate their tokens to the supported networks may vary based on certain conditions, such as the chosen network.
Understanding the unique features of Chorus One?
Chorus One primarily provides two services: Whitelabel staking and liquid staking.
Whitelabel staking
Chorus One’s Whitelabel staking service allows institutions with at least $10 million to run their customized nodes and offer staking services to users.
Chorus One offers Node-as-a-Service that enables institutions to customize their nodes by naming, branding, and setting their commission rate. This service comes with an on-call DevOps team that caters to the needs of the institution.
Users of the Node-as-a-Service feature can stake their tokens to earn returns while accepting tokens from regular users through delegation and earning rewards from them.
Liquid staking
Chorus One runs nodes for multiple networks, acting as validators and verifying transactions. Holders of the native tokens of the compatible or supported networks can delegate their tokens to Chorus One’s nodes to earn returns.
Traders who use the liquid staking feature on Chorus One not only earn returns for binding their tokens to the network for a set period but also benefit from access to liquidity, which is not common in standard staking. Users can choose to sell their staked tokens without worrying about unlocking them, increasing their liquidity.
Chorus One is compatible with several DeFi protocols, allowing users to use staked tokens in these protocols. Users can engage in other DeFi activities while their tokens are staked with Chorus One.
Diving Deeper: What is Liquid Staking?
Although the Proof-of-Stake (PoS) consensus mechanism may be innovative and environmentally friendly to the extent that Ethereum decided to switch from a Proof-of-Work (PoW) to a PoS system, it does have some drawbacks.
The PoS network functions with the help of validators that verify transactions and build blocks. Validators take the position of miners in a PoS chain, validating the transactions and building blocks in the process. This helps to improve the network’s operations and security and validators are subsequently rewarded with new tokens for their efforts.
Usually, a PoS network expects those that hold the native tokens of the platform to stake their idle coins. Staking involves binding or locking the idle tokens in the network for a period.
Users cannot utilize the token for other purposes during the staking duration. This means they can’t trade with the tokens, use them on a DeFi protocol, or deposit them in a liquidity pool to earn returns. They are rewarded with tokens for their efforts, which may be a combination of new coins and transaction fees.
Typically, users can select which validators they want to use. They enter an agreement to be rewarded a certain percentage for binding their tokens with the validator or node.
Once the staking duration elapses, they are given their previously-locked tokens and rewards. Suppose the validator breaks any rule in the network. In that case, they may lose a percentage or all of their tokens during the slashing penalty.
The major drawback with staking is that the individual can’t access their tokens until the staking period is over. As a result, PoS networks frequently experience liquidity issues. To address this issue, the concept of liquid staking was developed. Chorus One, Synthetix, and StaFi are notable blockchain infrastructures offering this feature.
Liquid staking is the process of locking or binding one’s tokens to the network, earning returns while still having access to them during the staking period.
Then comes the big question: how is this possible if the tokens are locked or bound to the network?
Liquid staking or soft staking is usually offered by a blockchain infrastructure that acts as a validator or runs nodes for the PoS network. This infrastructure allows users to stake their idle tokens with their nodes and then offers them a synthetic token that represents their staked PoS coins. With the synthetic tokens provided, they can carry out any type of activity, such as trading, lending, and much more.
This allows them to participate in DeFi activities and earn returns while also benefiting from staking rewards.
They can submit the synthetic tokens at the end of the staking period to receive their staked coins and staking rewards. Usually, the staking platform burns the returned synthetic token.
What Are the Benefits of Liquid Staking?
Liquid staking has numerous advantages for PoS networks and the crypto traders in general, some of which will be discussed below.
Access to liquidity
Liquidity is usually an issue for those who stake their idle tokens because they cannot access or use their assets until the staking period is over.
Before deciding to stake, a trader may need to perform an opportunity cost analysis to determine whether they will benefit more from staking or trading their tokens.
This is the enticing aspect of liquid or soft staking, as traders can stake their tokens, earn returns, and have access to a synthetic asset they can use to carry out other DeFi activities simultaneously.
Easy Unstaking
Users may encounter difficulties if they decide to unstake their tokens before the designated unstake date. The process could be lengthy, and it could result in penalties. Most liquid staking platforms make it simple to unstake before the designated unstake date.
In Conclusion,
- Chorus One is a blockchain infrastructure that provides individuals and institutions with staking solutions.
- Chorus One primarily offers two services: Whitelabel staking and liquid staking.
- Chorus One’s Whitelabel staking service allows institutions with at least $10 million to run customized nodes and offer staking services to users.
- Chorus One’s liquid staking service allows regular crypto enthusiasts to stake their tokens to earn returns while having access to liquidity.
- Liquid staking on Chorus One enables users to earn returns on staked tokens while using synthetic tokens provided by the platform to engage in other DeFi activities such as trading, lending, etc.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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