Orchai Liquid Staking
Last updated
Last updated
Oraichain is a Proof-of-Stake (PoS) network that incentivizes returns for users who assign the ORAI token on validator nodes to assure the network.
Orchai Liquid Staking is built on Oraichain with the purpose of tokenizing the staked ORAI and allowing users to freely utilize it in Decentralized Finance dApps.
In Orchai Liquid Staking, the unique feature is users have the right to choose their preferred liquid staking strategy.
sAssets are tokenized representations of staked assets in a PoS blockchain. Like the basic staked asset, sAsset grants the holder block rewards. On the other hand, sAsset is different from the staked asset because of being both transferable and fungible at the same time. Therefore, users can transact with sAssets as easily as they do with the underlying PoS asset. In Orchai Liquid Staking, there are two types of sAssets: sORAI and scORAI.
In Orchai, staked ORAI in the Orchai protocol will be called sORAI. After users stake ORAI in the Orchai protocol, Orchai Liquid Staking will give them back sORAI as the tokenized version of ORAI with equal value and functions. By implementing this mechanism, Orchai will ensure the benefit of users in receiving staking rewards and maintaining the utilization of the sAssets in Decentralized Finance dApps. The rewards from this option can be withdrawn at any time.
Orchai also implements automatic compounding of staked ORAI at a fixed frequency. With this mechanism, users can enjoy the benefits of no manual input. Therefore, they can receive the compound rewards (from staking ORAI and from staking the rewards) with less effort and gas fees spent on staking the rewards.
The difference between sORAI's and scORAI's mechanism is that in scORAI mechanism, the rewards earned from staking will be automatically re-staked to earn compound rewards. The rewards in this mechanism can only be withdrawn by unstaking scORAI, which takes a minimum of 14 days to process.
After receiving sORAI or scORAI, users can freely use them for different purposes. This can open the door to multiple opportunities, such as providing liquidity to DEXs, doing leverage staking or taking out a loan from a lending protocol such as Orchai Money Market.
As you might have already known, DEXs have many liquidity pools where users can swap CW-20 tokens. sORAI and scORAI are also CW-20 tokens, which means that they can be deposited into DEXs with the purpose of providing liquidity for pools. Hence, users can earn LP rewards generated from swapping fees on DEX.
sORAI and scORAI can be utilized in lending protocols to provide liquidity to lending pools to earn interest or be utilized as collateral to borrow.
Users can stake ORAI and get sORAI or scORAI, then use them to borrow some other supported tokens and exchange them to ORAI, and stake them in the Orchai protocol again to have more sORAI and scORAI to continue the cycle. By doing this, users can receive higher staking returns but also a considerable amount of liquidation risk.
Besides the main advantages above, with sORAI and scORAI, users can enjoy many other utilities in Orchai protocol and others.
