Innovative Liquid Staking Protocol with Enhanced Rewards

[huihzhao]

Main Objectives/Goals:

Increase the liquid staking APY and provide additional benefits to users through enhanced MEV rewards, restaking, and liquid restaking. This will be a comprehensive, one-stop staking service that captures all the benefits from the ecosystem.

Challenge Description:

Ethereum has proven the success of liquid staking with over $46B in TVL. As one of the top blockchains, BNBChain is proactively promoting staking and liquid staking, currently with < $1B in TVL. MEV solution is enabled and adopted by 30+ validators, and some builders are actively working in this direction. This is expected to increase the staking APY by 5% to 10%.

At the same time, Restaking protocols like Karak and Binlayer have already launched on BNBChain, which will provide robust infrastructure for secure and efficient restaking of BNB. With these layers in place, BNBChain is fundamentally prepared to enhance and simplify the experience of liquid staking, restaking, and liquid restaking.
This innovative liquid staking layer will function as both the liquidity and aggregator layer for the entire staking service, streamlining and enhancing the overall staking experience.

[9012Jessie]

It‘s not fully fulfilled yet.

[jasonrale]

🏦 OutStake

Not Only Native Yield Stake Protocol

Outstake is a protocol entirely built around native yield tokens, introducing the first non-USD stablecoin model tied to native yield rates. Compared to other yield token protocols in the market, such as Pendle, Outstake offers greater flexibility, enhanced composability, and provides higher returns along with multiple sources of income. The assets supported by Outstake form the foundational support for the Outrun ecosystem, providing a stable base for the entire system. Specifically, Outstake operates as follows:

1. A New Staking Model Based on Native Yield Tokens: Outstake adopts a unique design that allows users to control the native yield generated by their assets. Through Outstake, users can mint Principal Tokens (PT) by staking their assets, thereby unlocking liquidity for their staked assets and utilizing these tokens across a range of DeFi applications.
2. Native Yield Stablecoin (YT): The value of the native yield stablecoin is directly tied to the native yield rate. The economic model built around it offers stakers higher income and multiple sources of revenue. It is highly composable, allowing developers to create new products around it, thereby enriching the Outrun ecosystem.
3. Universal asset principal token (PT): The universal asset principal token is obtained by staking the native yields tokens of the same native asset type (such as Stone, stETH, rETH, etc.). Staking native yield tokens of the same native asset type will mint the same universal asset principal token. This allows for liquidity sharing among different native yield tokens of the same asset type, enhancing the composability of PT and reducing the difficulty of liquidity accumulation for native yield tokens.
4. Position Option Tokens(POT): These option tokens represent the right to redeem the native yield token at the end of its lock-up period. This option allows users to trade for a fixed interest rate without trading the PT itself, thereby enhancing capital efficiency.

Difference between OutStake and Pendle

Currently, Pendle is the most popular native yield staking protocol on the market. Here’s a comparison of Outstake and Pendle, highlighting the advantages of Outstake and the problems it addresses:

1. Token Types and Composability

• Pendle: The minted PT (Principal Token) and YT (Yield Token) have expiration dates. PT and YT are not standard ERC20 tokens but are closer to NFTs (Non-Fungible Tokens). Throughout the operation of the protocol, Pendle deploys numerous PT and YT contracts for the same Native Yield Token with different staking expiration dates, leading to fragmented liquidity and limiting the composability and use cases of assets on Pendle. In particular, YT's value goes to zero upon expiration, further restricting its usability.
• Outstake: The minted PT and YT are standard ERC20 tokens with no expiration date and can be freely integrated into other DeFi protocols. During the operation of the protocol, there is only one corresponding YT and PT contract for each Native Yield Token, which enhances composability and flexibility. Importantly, Outstake's PT is a universal asset principal token, allowing the minting of the same PT when staking Native Yield Tokens of the same native asset type, thereby sharing liquidity. Additionally, Outstake's YT can be viewed as a stablecoin pegged to the yield rate, enabling users to take long or short positions on the yield rate.

2. Fixed Rate Yields

• Pendle: The quantity of PT minted is equal to the amount of staked tokens, and PT experiences a time-decreasing negative premium. The fixed-rate yield comes from the negative premium of PT, which represents the losses incurred by stakers and users who purchase YT. To obtain a fixed interest rate, users must purchase the corresponding PT. Due to the negative premium of PT, early sellers of PT incur losses, significantly reducing the practical value of PT and making it difficult to integrate into other DeFi applications.
• Outstake: The number of PT minted is related to the amount of YT minted and the redeemable value of YT, avoiding the negative premium of PT. Outstake introduces tradable Position Options Token (POT), representing the redemption rights of native yield tokens at the end of the lock-up period. This allows users to obtain fixed-rate rights without trading PT, improving capital efficiency. The yield comes from demand exchanges, not from staking losses.

3. Staking Duration

• Pendle: The staking duration is determined by the protocol, and users cannot freely choose the staking period.
• Outstake: Users can freely select the staking duration, controlling the amount of PT minted. The staking duration is abstracted as POT, making the position expiration time a tradable asset, further increasing flexibility.

4. Yield Sources

• Pendle: Pendle does not generate real external yield; its fixed-rate yield essentially comes from the losses of stakers and users who purchase YT. The high fixed-rate yields of Pendle in the past were primarily due to various airdrop points from Restaking and other protocols, which led users to willingly incur losses in exchange for airdrop rewards, creating a temporary high fixed yield.
• Outstake: Through the Outrun ecosystem, which supports multiple assets, Outstake creates a rich arbitrage market and multiple income sources. Users can earn native yields, fixed-rate returns from trading POT, enhancing the overall profitability and scalability of the protocol.