Ankr’s Liquid Staking solutions offer a way for users to maximize their rewards and stake more flexibly – with no technical knowledge needed! Liquid staking grants stakers the best of both worlds; they can earn staking rewards and DeFi rewards simultaneously. All as a result of unlocking previously illiquid staked assets.
Here’s how it works:
First, choose which asset you’d like to stake from the 7 leading Proof-of-Stake networks. Then, enter the amount you’d like to stake and which liquid staking token you want to receive. These new tokens represent your staked assets and all accumulated rewards, and are automatically sent to your self-custody wallet like MetaMask. Finally, confirm the transaction and voila you’ve become a staker!
Your tokens are immediately “liquid,”meaning you can trade them, use them on DeFi protocols, or unstake them to redeem your original assets. The DeFi ecosystem offers several earning opportunities like: Providing liquidity to DEXs, farming rewards, increasing yields by depositing in a vault, or borrowing against your liquid staked tokens.
Plus, there’s minimal risk involved! Ankr will automatically delegate your stake to the best-suited nodes and reduce any risk of slashing.
The process is quite simple. Join us as we dive into the mechanics of staking assets on Ankr Staking and the implications of liquid staking for you personally, and DeFi writ large.
The staking process is quite simple, and by the end of this article, you will be a master staker.
Click this link and head on over to the Ankr Staking dashboard. You'll then be presented with a screen that looks like this.
It will ask you to connect your wallet. Simply connect your MetaMask (or preferred wallet of choice) and sign in.
Immediately after that, you'll be presented with the staking dashboard.
The next step is to choose which network you'd like to stake on. Each network will have a different APY that will allow you to get an estimation of the rewards you can expect.
We recommend choosing the network you believe in the most and want to support. I.e., If you already own a lot of Polygon and believe in the network, then choose to stake Polygon!
Now, you'll want to have a store of your preferred asset sitting in your MetaMask wallet. Let's say you have 2 ETH; then you can stake up to that amount. But keep in mind that you will also need to pay a small gas fee for each transaction. So to stake exactly 2 ETH, you will need slightly more than that available in your wallet.
Please choose the amount of available assets you'd like to stake and type it into the query. Or click Max if you prefer to stake all your MATIC.
Now we’ve reached the fun part! Ankr offers two types of liquid staking tokens in exchange for your staked assets.
Let's say you're staking MATIC. You'll see aMATCb and aMATICc. The difference is that the aMATICb is a reward earning token, meaning that its quantity will grow daily by just being on your wallet, while the redemption ratio is always exactly 1:1.
On the other hand, aMATICc is a reward-bearing token, meaning its quantity is stable, but the redemption rate increases over time.
Once you've chosen which asset you prefer, click Get aMATICb/c, and Ankr Staking will trigger a MetaMask transaction screen. Just complete the transaction on your wallet, and voila, you have staked your assets and are now supporting the validation process on your favorite network.
At this point, you are all done and just need to wait for the transaction to be processed. Note that it might take a few moments before the liquid staking token (aMATICb or aMATICc) will show up in your MetaMask, be patient.
Once the asset shows up in your MetaMask, you have officially become a staker and you’ll be earning rewards daily! You can view your staked assets and accumulated rewards on your Ankr Staking dashboard by connecting your wallet, or you can simply view your staked assets within your wallet balance.
We hope you enjoyed this short liquid staking walkthrough and found it helpful.
Now comes the fun part. So you've officially liquid staked with Ankr and received the tokens into your MetaMask wallet. Yet the question remains; How can you utilize your new capital-efficient assets in the DeFi ecosystem?
We understand. We've been there. The DeFi ecosystem can be very complex and overwhelming at times. New dApps and use-cases are coming out every day. We're here to help you along this journey and make the DeFi ecosystem a little easier to understand and slightly less overwhelming for you.
Let’s break this down. You can utilize Ankr Liquid staked tokens in multiple different protocols and DEXs, depending on the network that you stake on. Furthermore, we’ve created a DeFi Aggregator where you can see a list of all the yield-earning opportunities to use with your Ankr liquid staked assets. Keep this list in mind as it will be an invaluable tool for you throughout this process.
One of the primary utilization of your liquid-staked tokens is to lock your assets into a DEX for borrowing and lending. The idea is that you can lend your assets to allow other people to borrow, given that they pay interest on those borrowed assets which you receive in the long run.
ONX Finance is a great platform that integrates with Ankr staking. Within their platform you can filter to find all of Ankr's liquid staking solutions and what the APY / yield is for them.
One of the best strategies is to deposit your crypto into a yield aggregator which does all the heavy lifting for you. Note: another name for Yield Aggregators is Vaults.
What yield aggregators do is optimize your yield-earnings by contributing your funds to different protocols in an automated way. This algorithm not only decreases gas fees, but also automatically allocates your funds in the protocols that are most likely to earn you the greatest yield.
There are numerous liquidity pools available for you to deposit your liquid staked assets in. These pools generate yield for liquidity providers everytime someone swaps between two tokens in a DEX. The transaction fee that comes along with the swap is distributed to everyone that has liquidity invested in the pool.
Remember, the Ankr DeFi Aggregator displays every vault, lending pool, liquidity pool, protocol, and DEX, where you can earn rewards for your liquid-staked assets. If you want to start depositing assets into a liquidity pool, that database is the place to start.
On it you’ll find all of the liquidity pools that you can participate in and which liquid staked assets are found in each one. Here’s a peak at the dashboard.
It’s incredibly helpful. We would recommend perusing the different pools and finding one that has an APY and risk that you’re comfortable with. There are numerous options and it’s hard knowing which one will be right for you.
A few of the most popular DEXs and solutions among our users is Curve Finance, Ellipsis Finance, Sushiswap, and Uniswap Pools. The specific pool that you choose will depend on which asset you've liquid staked, your risk-tolerance, and specific financial goals.
Since you understand how you can earn yield from liquidity pools, it will be much easier to understand the dynamics of Yield Farming. The core concept is this: after you deposit your assets into a liquidity pool, you receive LP tokens in return. These LP tokens represent the amount total value of your stake in the liquidity pool.
Farming comes when you can earn the protocols native token as rewards for holding the LP tokens.
As we can see in this image, each of these different protocols give rewards in their native token. Sushiswap rewards your LP tokens with SUSHI tokens, ApeSwap with BANANA tokens and Ellipsis Finance with EPX tokens. These tokens have a value of their own and have the potential to appreciate over time further increasing the rewards that you receive.
And for the cherry on top, you can stake these protocol-native assets to receive even more rewards! The staked SUSHI, EPX or BANANA will generate yield as a result of the original LP token yield that you earned from owning a percentage of the liquidity pool.
Combining a few of these DeFi strategies can lead to much higher yields than anything usually found in the TradFi sector. Especially for passive income, the best you'll get with a savings account or bonds is 1%, whereas you rarely see any yield farming strategy yield less than 2%. The vast majority of strategies will earn you anywhere from 4%-15%+
As you begin staking and experimenting with different protocols and yield-earning strategies you’ll find the specific strategy that works best for you. We advise that you start small with only enough assets that you’re willing to lose and as you become more experienced with investing in the DeFi space. Once you get comfortable, you can slowly start ramping up the amount of assets you’re depositing into these protocols. Remember, there are significant risks across all of DeFi. Proceed with caution, and happy yield hunting!