Every investment related research you do irrespective of whether it is in stocks, mutual funds, or even gold, you will likely come across one common advice – profit lies in holding the investment.
While it is true that holding DeFi for long-term can give out more returns, the reasons why investors put money in cryptocurrencies are somewhat different than traditional investment models. A FOMO and gambling mindset that crypto investors typically act from while worked in the favor of the DeFi ecosystem earlier, has now started backfiring by adding more volatility into the space. The solution to this that the blockchain domain has found lies in DeFi staking platform development.
This article will give you a detailed insight into how to develop a DeFi staking platform, what feature-set to include, what security measures to take, and how much it costs to develop the platform.
What is DeFi staking?
DeFi staking is a process where crypto assets get locked in a smart contract. What investors get through this is rewards that often work as a passive income. Generally, the crypto assets which investors stake are non-fungible and fungible tokens while their rewards are interest that they earn by staking them.
For an easier understanding of the concept, you can see DeFi staking platform as a very high returns offering Fixed Deposit. Just like FD, you put x DeFi in the staking platform in return of which the platform gives you high return of interest.
Advantages of DeFi staking solution development
The reason why startups and enterprises are investing to build DeFi staking platforms spread across both them and their customers.
For the investors: The development of DeFi staking platform gives them greater yields compared to traditional banking models. Moreover, since they are able to hold the DeFi assets, it prevents them from market volatility in the long run.
For companies: When the tokenomics of the platform is well strategized, it attracts multiple users leading to the token appreciating in value. On the other hand, every transaction that the investors make is usually backed by handling charges that companies take.
Now that we have looked into the basics of what a DeFi staking platform does, let us get down to the details of how to make a DeFi ai platform – the answer to which typically lies in understanding the features set and tokenomics.
Types of DeFi staking
As you build DeFi staking platform you will come across two types of staking activities that you can develop your model on –
1. Staking in DeFi protocol
In this case, the investors can lock their tokens in a DeFi protocol in return of interests that they get as yields. These protocols usually consist of borrowing and lending platforms like Aave or decentralized exchanges like SushiSwap and Uniswap.
2. Yield farming
Here, the crypto investors become liquidity providers by depositing funds in liquidity pools for providing liquidity to other users. The other users of the platform can take a loan or borrow from the deposited tokens on a decentralized exchange. The platform fees then get distributed to the liquidity providers in line with their ownership in the liquidity pool.