On July 10, 2024, Coinbase announced that Stader (SD) would be included in its coin listing roadmap. SD was then listed on the Bitget exchange, and its value quickly climbed to a maximum of 0.8877 USDT. The current trading price is stable at 0.78 USDT, and the price has soared by more than 98% in 24 hours.
It is reported that on May 30 this year, Stader announced an important token economics restart plan, among which the most concerned by the market is: destroying 20% of the total supply, that is, 30 million SD, thereby reducing the number of tokens in circulation.
In addition, Stader will use 20% of its revenue each quarter to repurchase SD tokens and adjust the reward mechanism to promote the rapid growth of the total locked value (TVL).
Judging from the current market performance, the SD token economic structure optimization measures have obviously achieved good results. How will the entire ecosystem develop in the future, and can we expect the long-term value of SD?
01. Advanced non-custodial smart contract platform
Stader Labs is focused on providing convenient staking solutions and maximizing users’ staking returns. The platform leads the future direction of staking through its full suite of DeFi products, including a simplified one-click staking solution that allows users to easily invest in multiple validators.
As Ethereum moves from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism, the network's energy efficiency, scalability, and accessibility have been significantly improved. Although the PoS mechanism reduces the hardware requirements to become a validator, the high pledge threshold and long-term asset lock-up limit the flexibility of users to participate in the digital asset ecosystem. To address these challenges, Stader developed a liquidity staking solution that allows users to pool assets without meeting full staking requirements, while minting tokens representing staked assets that grow in value as staking rewards increase.
Stader's innovation is not only reflected in its technical implementation, the platform has also deployed smart contracts on seven proof-of-stake networks, including Ethereum, Polygon, Hedera, BNB, Fantom, Near, and Terra 2.0. Each of these networks has a dedicated staking contract that enables assets to be transferred to network validators.
On the Ethereum network, Stader offers two types of pools: permissionless and permissioned. Permissionless pools allow any user to operate a node with just 4 ETH and Stader tokens (SD) equivalent to 0.4 ETH, while permissioned pools include select, stable validators. In addition, Stader is developing a pool based on Distributed Validator Technology (DVT), which, once stable, will significantly reduce the risk of slashing and increase the security and decentralization of the network.
Stader's liquidity staking tokens have been integrated with multiple DeFi protocols such as Curve Finance, Balancer, Uniswap, Aave, and Beefy, expanding users' operating options in the DeFi ecosystem and enhancing user experience. Validators use staked assets to verify blocks and receive rewards from them, and Stader extracts a 10% fee from these rewards.
In addition to providing staking and liquidity solutions, Stader also emphasizes the multiple uses of its tokens, including governance, lending, and liquidity re-staking, which increases the motivation for user participation and the network's staking attractiveness. Through the form of a decentralized autonomous organization (DAO), SD token holders can participate in important governance decisions, such as the issuance of new tokens.
02. Deconstruction of SD economic model
Stader (SD), the utility and governance token of the Stader Labs ecosystem, is an ERC-20 token with a total supply of 120 million. The SD token is designed to increase its utility and participation, supporting the sustainable growth of the ecosystem.
The main application scenarios of SD tokens include:
Node operation support
Node operators need to stake SD tokens to participate in the security and stability of the network, which also provides them with the opportunity to earn rewards.
Incentives
SD token holders can lend their tokens, receive additional SD tokens as an incentive, and earn 10% of the node operator’s deposit.
Token Economics
Stader Labs introduced $xSD, a new mechanism that allows SD token holders to stake SD to obtain $xSD. $xSD holders will share a certain percentage of the protocol revenue and have governance rights.
Buyback mechanism
The protocol uses a certain percentage of revenue to buy back SD tokens and stake them as $xSD to support the market.
Despite the transparency issues, the Stader Labs team has promised to increase transparency about treasury addresses, token issuance rates, and revenue in the future. In addition, the launch of ETHx and integration with the EigenLayer network heralds Stader's continued expansion in the field of liquidity staking.
Industry insiders believe that SD tokens play a core role in Stader Labs' development strategy, driving the growth and stability of the entire ecosystem through various mechanisms and strategies. As the ecosystem continues to mature and expand, SD tokens are expected to continue to appreciate in value and bring long-term benefits to participants.
summary
As a vibrant ecosystem, Stader has established partnerships with many industry-leading venture capitalists such as Pantera Capital, Coinbase Ventures, and Huobi Ventures, further demonstrating the market appeal and potential value of its platform and solutions.
Stader Labs is more than just a facilitator of liquidity staking. It is also a bridge between traditional staking and the modern world of decentralized finance, providing a wide range of user groups with new ways to participate in blockchain network security and ecosystem development through its innovative solutions.
