๐ŸŒŸDOT Liquid Staking

Stake DOT to earn sDOT and rewards

What is Liquid Staking?

Stake DOT and receive sDOT. Yield daily staking rewards and put your sDOT to DeFi to work across the Polkadot and Astar ecosystems.

What's the problem of nominating your DOT on Polkadot relay chain?

Nominating on validators to earn DOT reward on Polkadot relay-chain locks oneโ€™s assets in one validator for a long time and what to expect is a fixed, predetermined staking reward in return. This limits the opportunities of generating higher returns on those assets from the DeFi ecosystem, since your asset is locked for a month where you could have utilize this asset fully on other DeFi protocols for yield-farming. If youโ€™ve staked all of your DOTs, you canโ€™t invest or trade in more profitable asset pairs on DEXs and exchanges.

In traditional Polkadot staking a user has to perform several steps manually:

  • Create a Stash Account and bond DOT to it;

  • Nominate validators;

  • Monitor validator's yield to maximize profit.

Staking on Polkadot requires expert knowledge, the main being the fact that slashing can get very severe if the staking is managed improperly.

Why stake your DOT on Starfish?

Liquid staking allows using the sDOT in other trading or investing opportunities to let the user get the best of both worlds - a reward on your staked assets, as well as the returns from new trading/investing opportunities. Liquid staking introduces various fundamental benefits by:

  • Making staking process simple - no need to worry about unstable nomination reward

  • No Minimum DOT requirement - no worries on staking small deposit while nomination requires minimum stake amount

  • Immediate appreciation โ€” you start earning from the pool from the moment of deposit

  • Maximise Earning - you can use sDOT on DEXs to trade, yield-farm and more

How does DOT Liquid Staking work?

When staking with Starfish, users receive sDOT tokens on a 1:1 basis representing their staked DOT.

sDOT is a rebasing that is pegged 1:1 to its DOT. Users can mint sDOT in 1:1 ratio of DOT by staking their own DOTs through our system. After minting any holder of sDOTs will get rewards automatically by increasing the sDOTs balance. Users also can unstake and claim their DOT tokens back in two ways:

  • By swapping sDOTs to Astar EVM DOTs on Starfish AMM, and potentially other AMMs

  • An average of 28-30 days of unbonding period for unstaking sDOT

sDOT Token Utility

With Starfish as the main DEX platform to yield farm and other star protocols on Astar ecosystem as extended sDOT usage, sDOT will become a reward earning rebasing token that can be used as collateral for borrowing.

  • Trade - AMM swap of sDOT token on Starfish balancer pools, where Meta-stable pool of DOT - sDOT tokens will be created for low slippage swapping and liquidity investment to earn swap fees

  • Provide Liquidity (SPT) - sDOT can be paired with tokens like $SEAN, $ASTR, and $DOT to yield farm dual token rewards on Starfish

  • Farm - stake SPT that has sDOT as one of the pair token to yield-farm

  • Hodl - Users can simply hold sDOT to enjoy staking without having income events triggered on-chain while staking, earn sDOT to redeem more DOT

  • (Soon) Mint stablecoins - use sDOT token as collateral to mint stablecoin BAI, and possibly other stablecoins on polkadot ecosystem

  • (Soon) Earn deposit APR - deposit sDOT on Starfish NFT-Fi Reserves to earn yields as a lender

APR Formula

The staking APR is calculated dynamically and fluctuates based on the node APY and the individual node fee. The formula is as follows:

  • sDOT APR = Node Staking APR * (1- node fee) * (1- Starfish fee)

  • wASTR APR = User's sDOT wallet balance / Total Issued sDOT * Total ASTR Reward

The sum of the above 2 APR would be the final APR user gets by staking Astar EVM DOT on Starfish DOT Liquid Staking.

Reward Fee

Reward fee is set at 9% of the net staker rewards. The node APY and the node fee changes from node to node.

Assuming a 16.5% staking APR, and a 9% Starfish fee, the final APR will be 14.71%.

16.5% * (1-9%) = 15.015% APR

The staking pool distributes 9% of the net staking reward by minting a proportional amount of the sDOT: 5% goes to node operators and 4% to the Starfish treasury. The remaining 91% of net staking rewards go to sDOT holders.

Transaction Fee

This fee applies to the both relay chain side and parachain side for polkadot native and parachain transaction fees. It's set at 0.035 DOT for now according to the parachain and relaychain's gas fee.

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