July 12, 2022: Raising the Stakes π π
Stake DAO Liquid Lockers pass $20MM TVL in rapid growth
We agree, @cosmic_ape1! Letβs respectfully underlook at Stake DAO.
The Stake DAO team, one of the original trio of applications authorized to lock $CRV, has built many great things in their year and a half, but perhaps nothing as suddenly impactful as their Liquid Lockers.
Built as a true βhave your cake and eat it tooβ product, liquid lockers aim to provide users with all the benefits of locked tokens with none of the drawbacks of locking.
The mechanics are simple enough you could instruct your grandparents on how to stake their money.
For the sake of $CRV:
Deposit your $CRV into the Stake DAOβs liquid locker to receive $sdCRV.
Stake the $sdCRV into the rewards gauge to earn all benefits.
When youβre done, unstake and retrieve $CRV via the Curve pool.
These rewards are themselves appealing. The effect of folding in bribes means $sdCRV is able to advertise double the rewards of $cvxCRV out of the box, with the potential to boost as high as 75% via Warden or Votium.
While Stake DAO gives you the ability to steer your locked Curve towards the bribe income of your choice, you can also run a βset it and forget itβ Llama Airforce Union-style passive approach, in which you delegate your voting capabilities to the core team. When you do so you donβt have to take any actions to maximize bribes, but can still vote on proposals.
Importantly, this does not just apply to staking raw $CRV. These apply to nearly any Curve liquidity pool LP token. Users can even add the tokens themselves if nobody has done so already.
Itβs not merely the Curve ecosystem that Stake DAO is working to corner. Stake DAO also supports Angle, Frax, Balancerβ¦ anything with a successful veToken is likely to fall into Stake DAOβs orbit.
So if Stake DAO liquid lockers are so great, why isnβt everybody using them? Admittedly, we canβt speak for everybody. Information asymmetry in crypto is a real thing β nobody can be expected to understand the inner workings of thousands of tokens, of which the supermajority are scams. Yet as things work out, word tends to spread. It seems this may be happening now with Stake DAO.
This week they celebrated $20MM in TVL, a value thatβs been climbing since the release of the Liquid Lockers earlier this year.
Crazy thing is, they were celebrating $15MM just the week before.
But Iβd heard DeFi was supposed to be dead?!? Maybe, maybe not, but at the very least traders have been bullish on Stake DAOβs $SDT token relative to $ETH over the past month.
Accordingly, much of this recent growth comes from protocols wising up to Stake DAO. The team released a case study a few weeks back on how Alchemix turned their activity to Stake DAO. The study details how an over-crowded Votium was diluting their voting power, but Alchemix was able to boost their voting power 1.4x using Stake DAO.
Itβs not just Alchemix. Frax Finance has been seen directly utilizing Stake DAO.
Tokemak has also been sighted around the premises.
The entire operation of Stake DAO, which also includes plenty of other products theyβve built over the last year, defies a comprehensive look. For more info, definitely check out this great thread by @0xBoka!
A great thread, although the Stake DAO team points to a small error, which is that the 16% performance / 0.5% withdraw fee is actually 0%. Everything turned out better than expected!