Ankr Network has announced that it has launched a new feature, Fantom liquid staking. The feature will allow the user to connect their assets to DeFi, creating additional opportunities to earn rewards. Franciska Kovacs, a contributor to Medium.com, looks at what this Ankr Earn feature has to offer.
Fantom Liquid Staking from Ankr Earn offers instant liquidity for the FTM tokens you stake on our platform, enabling you to connect your staked assets to DeFi and create an opportunity to earn several extra layers of rewards.
The Fantom Chain
Fantom is a blockchain that has seen massive growth lately as a choice for developers to build on as it helps eliminate the high gas fees and slow speeds that have become associated with older chains like Ethereum.
Fantom is part of a movement of similar projects like Polkadot, Avalanche, and Solana that aim to bring better performance to an incredibly demanding area. However, Fantom has the distinct advantages of full EVM compatibility, nearly instant transfers at fractions of a cent, thousands of TPS, and a more open, secure, and powerful network.
Earning more rewards while supporting the Fantom network via staking has never been easier, thanks to Fantom Liquid Staking from Ankr Earn.
What Is Fantom Liquid Staking?
Ankr Earn is all about simplifying the staking process while opening the doors for our users to earn more layers of income. Our newest product, Fantom Liquid Staking, is designed to give you access to more ways to increase your potential rewards and boost your overall ROI from FTM assets.
Fantom Liquid Staking is an enhanced method of staking on the Fantom blockchain. Staking on Proof-of-Stake networks normally means you would need to lock your tokens up with a validator node. This isn’t ideal as your assets are now “illiquid” or unavailable to spend or earn in other places. Illiquidity is sometimes the price paid for making an APR with some financial strategies, but thanks to Fantom Liquid Staking, it is totally avoidable.
How Does It Work?
With Fantom Liquid Staking, Ankr will stake your FTM tokens with validator nodes we’ve selected while giving you back new aFTMb tokens. This is an ERC-20 reward-earning token that will distribute staking rewards to your wallet daily. In other words, your wallet’s aFTMb balance will increase daily to reflect your staking rewards.
The best part is, you can use your aFTMb tokens to generate many more layers of passive income when using it to perform liquidity mining, lending, yield farming, and any other strategies on DeFi platforms. We expect Curve to be among the first platforms to host aFTMb along with others we will disclose soon after the release of FTM liquid staking.
Benefits of Fantom Liquid Staking Over Normal Staking
Using Ankr Earn is the best way to stake FTM as you can access instant liquidity in the form of the aFTMb token. Avoiding locking your tokens up with the Fantom network is a big advantage — it allows you to use the value of your staked tokens to earn multiple layers of rewards on DeFi platforms and multiply your ROI potential. Yield farming, arbitrage trading, lending, and more will all be possible using the value of your staked assets.
As Liquid Staking solves the capital inefficiency problem of (Nominated) Proof-of-stake networks, it offers a way to earn additional rewards on your staked FTM, enabling new yield farming strategies. The main components of Fantom Liquid Staking will be:
- Liquidity mining opportunities are enabled by providing liquidity for pools in decentralized exchanges. The first main liquidity pools are expected to be aFTMb/ETH.
- Farming rewards for liquidity providers. Liquid Staking presents several yield farming strategies for users to contribute to liquidity pools and gain a share of the trading fees and governance tokens. These new LP tokens can be used to generate yet another layer of earnings.
- Staking rewards on farmed tokens. After using yield farming strategies, users can also reinvest their farmed LP tokens into more staking opportunities. This is a highly repeatable process as layers of rewards from farming and staking will quickly stack up.
- Yield aggregators and vaults can automate yield farming rewards and enable compounding returns with next to no effort from users. This is a great method for maximizing your passive income strategy.
- More trading opportunities are enabled thanks to the elastic supply nature of aFTMb, meaning that you could potentially buy aFTMb at a discount on a Decentralized Exchange and redeem it (unstake it) on Ankr Earn to extract its fair value back in up to 28 days (the Fantom Liquid Staking unbonding period).
If you would like to unstake your FTM, you can choose the “unstake” option at any time on the Ankr Earn platform. After you select unstake, you will need to wait up to 28 days unbonding period before you can claim your funds. During this time, your FTM will still be earning staking rewards. This creates a more robust price stability mechanism for Fantom Liquid Staking, where any price deviation of aFTMb vs. its fair value will create trading opportunities that can be exploited by redeeming aFTMb (unstaking FTM) or minting aFTMb (staking FTM).
That means if you buy aFTMb at a discount on a DEX and unstake it on Ankr Earn at its fair value, you will make a profit! Therefore, aFTMb price stability will be less dependent on the size of liquidity pools and associated rewards.
Borrowing and Lending
The aFTMb tokens will also allow users to borrow against their aFTMb assets in exchange for assets like FTM that can be restaked or used for additional earning strategies. Or, lend your aFTMb assets in return for interest paid by borrowers.
No technical knowledge required
Receive an easier staking experience with no technical knowledge necessary. Liquid Staking makes staking as easy as a swap: exchange your FTM for the reward-earning aFTMb token.
Our Fantom Liquid Staking will not be using only Ankr validator nodes to stake the FTM from users. Ankr Earn will select several suitable and reliable Fantom validators, making Fantom Liquid Staking as decentralized as possible. This means that Ankr will not contribute to giving any party more influence over the Fantom network as the FTM will be spread over a wide variety of nodes. Ultimately, the end-goal is having Ankr governance deciding on the target allocation to different validator nodes.
Staking with Fantom Liquid Staking allows you to play an important role in boosting the network’s security as a whole. Ankr’s Fantom staking system distributes staked tokens intelligently across the Fantom ecosystem to help the network achieve optimal decentralization. Diversity and decentralization of active validators both ensure the network remains as secure as possible.