In a news statement shared with CoinDesk, the Investment Director at BNB Chain, Gwendolyn Regina, announced the introduction of “liquid staking” with three top Web3 protocols: Ankr, Stader, and pStake. Many crypto investors enjoy staking their cryptocurrencies to earn rewards for holding long-term to generate passive income. BNB Chain Users will now have the opportunity to generate interest by allocating their BNB token to liquid staking protocols in exchange for tradable aBNBc, BNBX, and stkBNB tokens.
Ankr, which offers a software development kit allowing protocols to offer token staking, is supplemented on the BNB Chain by the liquid staking protocol pStake and Stader, a staking-as-a-service platform, according to the release. YCharts data reveals that BNB Chain is the most significant innovative contract blockchain in terms of transaction volume. On Monday, CoinDesk reported that the three had staked a combined amount of 101,100 BNB, or $30 million, in locked value.
Is this Appealing to Crytpo Users?
Liquid staking is delegating your tokens to a service that stakes for you without losing access to your funds. This form of staking allows you to access your funds even when you risk them. According to Regina, “just 24% of the market value of staking platforms is locked away in staking. Users do not yet understand the advantages of staking. It decreases concentration risk by avoiding a single point of failure by using three competitive methods.” BNB Chain anticipates several benefits for its users and enhanced utility for the blockchain. Time will tell how well this bolsters the blockchain’s growth compared to the competition.
Users can currently stake their BNB tokens on BSC (BNB Smart Chain) directly to confirm transactions and safeguard the network. Due to the network’s current staking ratio (upwards of 11%), security must be increased; yet stakeholders are compelled to give up the endless Defi opportunities provided by the BNB Chain ecosystem. By eliminating the opportunity cost of staking or taking part in Defi, liquid staking allows users to benefit from the best of both worlds.
Impact on Crypto Market?
Due to BNB Chain’s massive growth, articles have speculated for quite some time if BNB has the potential to flip Ethereum in daily market volume and total market capitalization. By launching liquid staking, BNB Chain will have added utility and continue to pose formidable competition to other blockchains by offering cheaper trading costs, more opportunities at the token sales launchpad, and exceptional staking opportunities. How this will play out long-term is impossible to tell and remains unclear. BNB may never flip Ethereum and has intense competition from Cardano (ADA), valued at $46 billion, while BNB, the third-largest cryptocurrency, had a market cap of $47 billion.
Summary & Conclusion
BNB Chain is marketing itself as the ideal ecosystem for a liquid staking solution due to its high user activity, liquidity, and growing Defi ecosystem. BNB liquid staking is expected to be successful and add to the continued growth of the BNB Chain.