The XinFin Network's approach to enhancing its staking mechanisms showcases a visionary outlook aimed at fostering greater participation, liquidity, and security within its ecosystem. As we delve into the future of XDC staking, four pivotal enhancements emerge: liquid staking, restaking, Eigenlayer staking, and protocol restructuring for XDC masternodes. Each of these developments contributes to a more robust, flexible, and innovative staking landscape, ensuring the XinFin Network's competitive edge and appeal to a broader range of stakeholders.
Liquid Staking, Democratizing Participation
Liquid staking represents a transformative step forward, enabling participants to stake smaller amounts of XDC in a liquid pool. This model addresses the current limitation requiring masternodes to lock in a substantial 10 million XDC, alongside a one-month lock-in period for resignations. By providing a mechanism for immediate withdrawal from the staking pool, liquid staking not only democratizes participation but also enhances the liquidity and accessibility of the XinFin ecosystem. It leverages the existing masternode framework, adding a layer of flexibility and inclusivity that attracts a wider audience of stakeholders.
Restaking, Unleashing Liquidity
The concept of restaking within the XinFin Network introduces a novel approach to liquidity. Masternode operators can restake their locked XDC in protocols such as Fathom or Prime Numbers, enabling them to unlock and repurpose their capital while still contributing to network security. This mechanism, however, poses a risk of underlying XDC ownership loss if the restaked assets are traded away. To mitigate this risk, implementing fixed income product solutions akin to those offered by Fathom.fi provides a safer, more predictable avenue for liquidity without compromising on the integrity of staked assets.
Eigenlayer Staking, Securing Layer2 with Mainnet Assets
Drawing inspiration from Eigenlayer's model of using restaked ETH to secure Layer2 networks, the XinFin Network can adopt a similar strategy for XDC. By allowing Layer2 subnets to be programmatically secured using mainnet XDC, this approach enhances the overall security and efficiency of the network. Subnets acting as Layer2 solutions can thus benefit from the robustness of the mainnet's security parameters, encouraging innovation and the development of scalable applications within the XinFin ecosystem.
Protocol Restructuring, Ensuring Long-Term Sustainability
A critical aspect of future-proofing the XinFin Network's staking ecosystem is the innovative restructuring of the protocol for XDC masternodes. This restructuring aims to balance long-term sustainability with controlled inflation or deflation, optimizing staking incentives to maximize participation. Such adjustments are pivotal in maintaining the network's health, attractiveness to stakers, and its economic stability. By fine-tuning the protocol, XinFin ensures that staking remains a lucrative and appealing option for existing and potential participants, driving the network's growth and securing its future.
The future of XDC staking is marked by significant advancements that promise to enhance liquidity, accessibility, and security across the network. Through liquid staking, restaking, Eigenlayer staking, and thoughtful protocol restructuring, the XinFin Network is poised to redefine blockchain staking paradigms. These developments not only underscore XinFin's commitment to innovation but also reinforce its position as a leading blockchain platform ready to meet the demands of a rapidly evolving digital asset landscape. As these enhancements come to fruition, the XinFin Network will undoubtedly attract a diverse array of participants, securing its role in the future of decentralized finance.
Discussion (10)
Change is definitely needed. While it is an institution-centric chain, it must evolve to also embrace retail-focused applications. Otherwise, eventually, there will be no retail community left, only institutions. I believe that in this still nascent market, demand comes from rapid growth driven by retail users. Despite numerous advancements, without community engagement, nobody in the crypto world will acknowledge these efforts. It's late, but it's essential now more than ever to make staking more appealing for retail users to engage with XDC, create an environment where various DApps can onboard easily, and move XDC from CEX to DeFi to increase TVL. Additionally, there must be enough demand to dilute the impact of master node reward selling. While the XDC Network has secured a very positive influence in reality, it's not an attractive asset for retail users in its current state. The on-chain data situation looks very dire. Moreover, even if the community shares information through social media, it just circulates within specific groups like XRP, ALGO, XLM, QNT, and doesn’t spread to major EVM chain communities. The reason is that these communities feel isolated and lack significant DeFi experience. Swift improvements are necessary.
Hey there, can you share the on-chain data that you were referring to? Thanks for the post, I agree with your statements.
The detailed information about on-chain data seemed to have been omitted during the translation. It refers to the TVL (Total Value Locked) on-chain data, which can be checked on DefiLlama. Of course, currently through block scan, you can observe the significant difference between the number of XDC transactions and actual on-chain transactions compared to other chains. What I meant in that paragraph is the Defi TVL compared to the total circulating supply. While this TVL will surely increase due to the institutional demand for FXD issuance, it's desirable for retail adoption to occur simultaneously. While the goal is to bring a significant amount of XDC from CEX to DeFi, institutions typically use methods like OTC that don't impact the market price. Therefore, if institutions initially bring CEX liquidity to DeFi, the subsequent rise in retail adoption, attracted by various strategies using XDC Network's DeFi products, should also increase.
If I understand the vision of the XDC Network correctly, it is currently focusing on institutional-centered development and infrastructure building, having completed the foundational work. Now, at this stage, the network is moving forward to embrace retail users and provide products that offer a superior experience compared to what other ecosystems offer. I believe that 2024 is a crucial year for these efforts, and thus, it's important for retail users like myself to offer diverse and practical opinions about the XDC Network in the market. While many believe that retail user adoption is unnecessary and that everything will be perfect with institutional participation alone, I think this perspective differs somewhat from the vision pursued by the XDC Network. We are an EVM-compatible chain, recently updated to support the latest Solidity, which I see as measures to onboard various dApp developers. Additionally, we regularly participate in events that attract many developers and encourage projects through hackathons. Although we are leading in trade finance, we are lagging behind in the dApp ecosystem where XDC can be utilized. Therefore, it seems that we are currently very busy trying to catch up in this area.
To establish an environment where a diverse range of dApp developers can onboard, the demand from the retail community is essential. Not all dApp developers target institutions, and there may be more products targeting retail demand. However, teams building dApps also need demand to build platforms and generate revenue through them. Due to the lack of demand, it is natural for most projects to be built on chains such as Solana, Ethereum, and L2. Therefore, I believe that it is necessary to first create an attractive environment for teams building projects to come in.
Interesting stuff!
I'd like to hear more about the restaking of masternodes' locked assets, and how that might work using the fixed income products referenced above. If those large and valuable pools of assets were recognized as such and were able to be unlocked and repurposed through Fathom or other protocols, that could potentially increase TVL on the network, and at the very least provide a large influx of value into those protocols. Otherwise, that liquidity is just sitting there.
I'm also interested in more details about the protocol restructuring and how that might affect the community.
Looking forward to hearing more about it.
Furthermore, please update information about subnets on CodeRUN. I would like to deepen my understanding of subnets. Could we imagine subnets of Avalanche?
Does this mean that a restructuring is currently taking place? After the vote for transitioning to PoS was rejected, have you found a new solution?
exusme where link DAOFIN ?
i have proposal to create XDC Dapps and ecosystem
daofin.xdc.network (The beta version link on Apothem testnet)
You can find updates here: twitter.com/DaoFinXDC