The decentralized finance (DeFi) world has given rise to some exciting new staking opportunities. As dozens of chains have native assets supporting yield farming and staking, there is tremendous potential to explore. However, personally, I feel the current landscape is far too fragmented, dissuading users from using their liquidity for the greater good of the broader ecosystem.
Issues Affecting Staking And Yield Farming
Most people think they invest in a cryptocurrency, keep it in a wallet or exchange, and wait for prices to increase. Although that approach works for an asset like Bitcoin, it is very different where Proof-of-Stake cryptocurrencies are concerned. Those can be held for longer, hoping for a price increase, or users can “put them to work.” I am a big fan of staking coins, as it allows me to help support the network and earn passive income in one swoop.
More specifically, there are dozens of crypto assets with staking functionality today. Some can offer relatively high returns, although that depends on various factors. For example, the current industry average is 8.51% interest per annum, significantly outpacing banks and other traditional financial solutions. Moreover, users can still benefit from price increases by holding their assets over time, as stakers do not part with their assets permanently.
At such high rates, it is almost surprising that not more people are staking. Unfortunately, I know the reason why that is the case. It isn’t straightforward to explore staking options when one handles multiple crypto assets. Using different wallets and protocols can be exhausting. Moreover, there is much news to keep up with, turning crypto staking into a part-time job. The current landscape is too complex for novice users, and even advanced users, like myself, can’t keep up with everything to maximize their earnings. Over 235 assets support staking today, and they all deserve the same level of attention.
Sadly, this issue is not unique to staking cryptocurrency. As a DeFi enthusiast, I am always looking for the next opportunity to farm a higher yield. However, I grew beyond frustrated by swapping between protocols, assets, and blockchains manually. Both staking and DeFi yield farming need interoperable cross-chain interfaces and protocols to make either option more accessible. Whoever can bring that solution to the market first will gain a tremendous competitive edge.
Creating A Unified Staking And DeFi Solution
Although there are many innovative ideas in the crypto and blockchain world, I am a big fan of “pool” concepts. Letting users deposit their assets in a pool to earn staking rewards or farm yield is straightforward and can still provide beneficial results. A staking pool can also support multiple assets, even though most solutions exploring this option stick to assets on one specific blockchain. Unfortunately, that does not aid in our search for cross-chain interoperability.
Kine Protocol, one of the many decentralized protocols in the crypto and DeFi space, has the answer to my prayers. It provides a staking pool supporting cross-chain assets residing on Ethereum, Binance Smart Chain, and Polygon. These three chains are a good starting point, although I hope to see them expand to other blockchains in the future. I can stake these supported assets and benefit from multiplied rewards. More specifically, I earn trading fees from their native exchange — I provide liquidity — and receive token distributions from the Kine Ecosystem Grant.
More importantly, I can adjust my staking contributions to my needs at that time. If I want to add or remove assets, that is possible, and it doesn’t affect my overall position. The support for these cross-chain assets, combined with higher rewards and the freedom to adjust my liquidity, creates a compelling use case for those who want to stake coins and farm yield. Through Kine, I can have the best of both worlds, without compromises, and optimize my returns in the process.
It is essential to push the boundaries of innovation in the crypto and blockchain space. Unified pools that provide staking rewards and yield farming through a convenient interface with liquidity customization options are the way forward. Ideas like Kine’s will lead to better exchange and staking solutions while also attracting a new audience seeking the benefits of DeFi yield farming.
More importantly, innovative concepts like these have a chance of giving me and others a more competitive landscape with even better passive income rates. Many blockchains with native assets can offer high returns, but they need to be made more accessible. Unified staking and DeFi pool, with a strong focus on cross-chain support, can change the landscape forever.