We are excited to announce our development of cross-chain staking derivatives alongside our partners Ramp DeFi and TomoChain. In the coming months, users will be able to trade staking derivatives with leverage across multiple layer one protocols.
What are Staking Derivatives?
Staking is of course a method via which capital is locked via smart contracts to help secure PoS based blockchains. Staking also earns users a yield which serves as a payout for helping to secure the network. However, a drawback to this is the loss of liquidity which is crucial for DeFi projects.
Staking derivatives aim to provide a solution to this conundrum by enabling users to earn staking rewards while simultaneously being able to unlock liquidity via the minting of a collateralized token. One promising case in point of such a project is Injective’s partner, Ramp DeFi.
Ramp DeFi proposes that the staked capital on the non-ERC20 staking blockchains be collateralized into a stablecoin, “rUSD”, which is issued on the Ethereum blockchain. rUSD holders can directly deploy rUSD into DeFi protocols to earn multiple income streams or exchange rUSD for USDT / USDC via liquidity pools , creating a seamless liquidity “on/off ramp” for users with capital locked into staking arrangements. This of course enables the extraction of liquid capital from your staked portfolio to invest into new DeFi opportunities while you continue to earn your staking rewards.
An Introduction to Cross-Chain Staking Derivatives
One salient issue that remains in the blockchain sector today is the rise of multiple layer one chains that each have their own disparate ecosystems. As a result, value locked onto Ethereum cannot directly help to increase use cases for DeFi on other layer ones such as Cosmos for instance.
This is where the introduction of a cross-chain staking derivative becomes key to expanding the DeFi universe. Ramp can help to mint wrapped tokens for PoS based chains and send those tokens to Injective for trading. Now users will be able to earn staking rewards while having access to wrapped tokens that can be used to create new markets on Injective. This can help to unlock not only new yield farming opportunities but also the ability to trade on limitless markets on Injective, thereby forming new avenues for traders to capitalize on their assets that were not possible before.
The Process: Trading Cross-Chain Staking Derivatives
We will begin this process with the introduction of wrapped TomoChain assets which will be provided by Ramp DeFi. TomoChain is a PoS based blockchain that is used by a number of enterprises and institutions such as the Vietnam Ministry of Education.
Users will be able to put their TOMO into Ramp smart contracts on TomoChain to create wTOMO. This means that users staking TOMO will continue to receive their staking rewards, where being able to send wTOMO to Injective for new trading opportunities.
From a user interface perspective, one click will be used to stake and generate wTOMO with rewards claimable per epoch. A second click will be used to send wTOMO to Injective. These steps will then allow users to create new markets using wTOMO, whether that be a new yield farming derivative contract or even a unique index. The possibilities are truly endless for how a savvy user can capitalize on their staking derivative while continuing to earn the staking rewards from their native TOMO asset.
“We are excited about the upcoming launch of cross-chain staking derivatives on Injective alongside our partners Ramp DeFi and TomoChain. This is a monumental contribution to the DeFi sector as a whole and will provide traders with innovative trading opportunities on Injective that are not available on any other exchange today. We look forward to continuing our work with our partners to further accelerate the adoption of DeFi globally,” said Eric Chen, Injective CEO.
Ramp DeFi is also working alongside other promising layer one protocols such as Elrond and Tezos. So we also hope to add new cross-chain staking derivative markets in the future as well.
“This three way partnership is powering a new innovation frontier for DeFi by letting TOMO users participate in leveraged derivatives trading on Injective Protocol, while earning staking rewards at the same time. We are excited that Ramp’s liquidity wrapping solution is now used to deliver real passive yield for the TomoChain community, and are committed to working closely with our partners to make this a success,” commented Lawrence Lim, Project Lead for Ramp DeFi.
TomoChain is continuing its development to become a core component of the burgeoning DeFi ecosystem. They will certainly serve as a valuable partner as our initial cross-chain staking derivative market.
“I am excited about the collaboration opportunities between TomoChain, Ramp Defi, and Ịnjective Protocol. The integration of TOMO as an asset on Ramp Defi and on Injective for leveraged trading helps to illustrate the composability and effectiveness of DeFi as a whole. We should further explore other collaborations and integrations in the future to build a strong foundation for DeFi and Open Finance,” said Long Vuong, TomoChain CEO.
Closing Remarks: A New Age in DeFi
The teams at Ramp DeFi, TomoChain, and Injective share a common ethos to further democratize opportunities within the financial sector. The upcoming launch of cross-chain staking derivatives furthers this goal and marks the creation of entirely new markets that were thought to be unimaginable before.
Our plan at Injective is to continue adding support for new stocks, indices, ETFs, and other unique derivatives. Moving forward, our team at Injective will continue to take steps in order to unlock a truly limitless trading experience.
About RAMP DEFI
Backed by world-class investors, Ramp DeFi is a global decentralized finance solution that focuses on unlocking liquid capital from staked digital assets. Using the Ramp solution, users with staked assets can continue to receive staking rewards, retain capital appreciation potential on their staked portfolio, and unlock liquid capital to invest in new opportunities at the same time.
TomoChain is a scalable blockchain-powered via Proof-of-Stake Voting consensus which is used commercially by companies globally. Its mission is to accelerate the onboarding of millions of users by empowering today’s applications with technology that masks the friction of Blockchain, all while retaining its underlying benefits. An array of original features and protocols are designed to support speed, privacy, usability, and liquidity needs all in one platform.
About Injective Protocol
Injective Protocol is the first layer-2 decentralized exchange protocol that unlocks the full potential of decentralized derivatives and borderless DeFi. Injective Protocol enables fully decentralized trading without any restrictions, allowing individuals to trade on any derivative market of their choosing. Injective Protocol is backed by a prominent group of stakeholders including Pantera Capital, one of the most renowned venture capital firms in the world, and the leading cryptocurrency exchange, Binance.