What are the pledged blockchain projects? Is it reliable? What are the currencies in the pledged sector?

Staking is a way for cryptocurrency users to earn interest through their digital assets, a process that runs under the Proof of Stake (PoS) model of the blockchain network to verify transactions. With the introduction of liquid staking agreements, staking has become more convenient and users are more likely to participate. Common staking blockchain projects on the market currently include Ether.fi, Renzo, EigenLayer, StakeWise, etc. For investors, it is far from enough to understand these basic knowledge. I want to know more about whether the staking blockchain project is reliable? According to data analysis, pledged blockchain projects also have risks. The editor will tell you in detail below.

 What are the staked blockchain projects?

Staking blockchain projects include Ether.fi, Renzo, EigenLayer, StakeWise, Marinade, etc. Pledge is an important way of participation in the cryptocurrency world. Users support the network operation and obtain rewards by locking the cryptocurrency they hold in the blockchain network. As the core of the proof-of-stake consensus mechanism, pledge not only promotes the decentralization of the network, but also provides users with opportunities for additional benefits. The following is a detailed introduction to some projects:

 1. Ether.fi

Ether.fi is a decentralized staking platform built on Ethereum. It enables users to stake their ETH while maintaining control of the private key. It has unique integration capabilities such as using NFTs for validators and integrating with EigenLayer for additional benefits. The native re-staking function implements compound interest in pledge rewards, allowing users to earn more profits over time. This technology allows users to maximize their benefits without manual intervention. Ether.fi has two native tokens: eETH and ETHFI.

 2. Renzo

The Renzo protocol is the main interface for users to connect to the EigenLayer ecosystem. It is EigenLayer's liquidity re-staked token (LRT) manager, responsible for managing the staked policies. Since its launch in January, Renzo has become a popular and widely distributed liquidity re-staking agreement. In addition to providing higher returns than traditional Ethereum staking methods, it also simplifies the complexity associated with Ethereum staking. This protocol uses Active Verification Services (AVSs) to protect applications developed on EigenLayer, leveraging Ethereum’s Layer 1 security standards. REZ is the native governance token for this protocol. REZ holders can vote on governance proposals within the ecosystem.

 3. EigenLayer

EigenLayer is a new protocol built on Ethereum. It developed a new concept in the security of crypto-economics—re-staking, leveraging ETH on the consensus layer. Users who natively stake Ethereum or use liquid stake tokens (LSTs) can choose to join the EigenLayer smart contract, restake their ETH or LST, and expand the crypto-economic security of more applications on the network to earn more rewards. EIGEN tokens are universal subjective working tokens that anyone can use. It is the main token of the EigenLayer ecosystem.

4、StakeWise

StakeWise is an infrastructure that provides liquid staking solutions for Ethereum. In terms of Ethereum staking, the platform provides an alternative to well-known protocols such as Lido and Rocket Pool. StakeWise is controlled by StakeWise Decentralized Autonomous Organization (DAO), which uses SWISE governance tokens to vote and incentivize the adoption of protocols. SWISE holders can comment on protocol parameters (such as fees, placement criteria in activation queues, selection of node operators, fiscal expenditures, etc.) through regular voting based on StakeWise Improvement Proposals (SWIPs).

 5. Marinade

Marinade is a community-led and based on a decentralized autonomous organization (DAO). It is committed to open source development and transparent governance. Users use Marinade Decentralized Autonomous Organization (DAO) management protocol. MNDE is a native token used to participate in DAO governance. Users who pledge MNDE tokens can participate in the voting pool or proposal.

 Are staking blockchain projects reliable?

Staking blockchain projects also have risks and are not necessarily reliable. Staking is a common participation mechanism in the blockchain field, especially for those projects that adopt Proof of Stake (PoS) or its variant consensus mechanism. Through staking, users lock their cryptocurrency into the network to support network security and operations, thus earning rewards. Regarding the reliability of the pledge project, we can analyze it from the following 7 aspects:

1. The credibility and transparency of the project itself: A project with a well-known team and strong background is usually more reliable. It is best to choose those projects behind a well-known team or known large blockchain companies. Quality blockchain projects often open source their code and provide detailed technical documentation for public inspection and verification. Transparent operation and code are an important foundation for trust.

2. Consensus mechanism and technical foundation: Pledge is based on the PoS consensus mechanism. If you choose to pledge a project, it is best to understand how its consensus mechanism works and whether it can provide sufficient security guarantees. Whether blockchain technology is mature, has been audited multiple times or has been verified by the community will affect the reliability of the project.

3. Network security: High-quality blockchain projects usually undergo regular security audits. Choosing projects that have been reviewed by third-party security companies will greatly reduce potential risks such as smart contract vulnerabilities. Understand whether the project has a complete protection mechanism, such as cold wallet storage, distributed nodes, etc., to prevent tokens from being stolen.

4. Incentive mechanism and reward allocation: Understand the project's reward allocation mechanism and rate of return. If the returns are too high, it may be a risk of instability in incentive mechanisms or fraud. Typically, reasonable annualized yields are common between 5% and 20%. Some pledge projects require locking positions within a certain period of time, which means that you cannot withdraw assets at any time. Understand the rules and terms of the lock-up period to avoid funds being locked for too long to flow.

5. Project market performance and community support: Check the project's market value and transaction volume. Higher market value and liquidity mean that the project is widely accepted and relatively stable. Projects with low market cap or inactive may face higher risks. Most reliable projects will have strong community support. Joining the project’s community platform to understand the community’s activity and trust in the project can help you evaluate the stability and prospects of the project.

6. Whether the project is regulated: Check whether the project complies with the laws and regulations of the country or region, especially for pledge platforms involving capital flows. If the project is regulated, it is often subject to more scrutiny and constraints, so compliance is a guarantee of project stability.

7. Choice of pledge platform: Choose a large and trusted pledge platform to pledge assets. Projects that work with the platform are often subject to more scrutiny and therefore more secure. If you choose to pledge through decentralized methods (manage your own wallets and nodes), you need to have certain technical capabilities. If pledged through the platform, the security and operation of the platform are crucial.

 What are the currencies in the pledge sector?

There are 8 types of coins in the pledge sector, namely LDO, RPL, FXS, ANKR, SSV, FLS, PSTAKE and SWISE. The following editor will introduce it to you in detail:

 1. LDO

Lido DAO is a community that establishes liquid staking services for Ethereum. Lido allows users to receive staking rewards without locking assets or maintaining staking infrastructure, and Lido's DAO plays a vital role in platform governance, helping build liquid staking solutions and promoting community-driven approaches to project development. DAO enables users to directly influence the future of the platform and provides collective decision-making mechanisms. This makes Lido's DAO a key factor in shaping the direction of the pledge platform.

 2. RPL

Rocket Pool is an Ethereum PoS infrastructure service. All individuals and organizations who want to obtain Ethereum interest through regular stakes can participate in staking by running the network using Rocket Pool's decentralized and nodes. Rocket Pool said that the main network will be divided into four stages and gradually opened. Each stage will have a staking upper limit, namely 480 ETH, 1440 ETH, and 4320 ETH. The staking amount in the last stage will not be set, but the staking amount of rETH in each stage will be limited.

 3. FXS

Frax Finance (Frax for short) is originally named Decentral Bank, and is a fractional algorithm stablecoin protocol. Frax is an open source, permissionless, fully on-chain protocol, currently running on Ethereum (cross-chain operation may be implemented in the future). The ultimate goal of the Frax protocol is to provide a highly scalable, decentralized algorithmic currency instead of fixed-supplied digital assets such as BTC. FRAX is a stablecoin with a target of around USD 1 per coin. Frax Shares (FXS) is a governance token that accumulates fees, seizures revenue and excess collateral value.

Frax (FRAX) is a partially algorithmic stablecoin whose supply is supported by collateral and partly stable by algorithmic. The collateral ratio depends on the market price of the FRAX stablecoin. If FRAX trades above $1, the agreement reduces the collateral ratio. If FRAX trades below $1, the agreement increases the collateral ratio.

 4. ANKR

Ankr is a distributed computing platform that uses idle computing power in data centers, personal computers and edge devices. Its computing power market unlocks the sharing economy based on cloud computing, bringing huge convenience and benefits to suppliers and users. Ankr leverages containers, Kubernetes, blockchain and trusted hardware to bring users cheaper, safer and better experience clouds. The Ankr team includes multiple serial entrepreneurs and senior engineers. Recently, it has reached a strategic technical cooperation with large technology companies SAP, Telecom and DigitalOcean, and will further expand and implement it. ANKR tokens are used to store/transfer value in the platform and are practical. Meanwhile, ANKR tokens can be used to pay for the calculation fee of PoUW. Users can contribute their computing power within the platform to obtain ANKR tokens. The more you participate, the more tokens you will get.

 5. SSV

The Blox (CDT) brand has been upgraded to SSV.Network (SSV) and is distributed at a rate of 100 CDT = 1 SSV. SSV (Secret Shared Validators) is a secure and robust way to split the validator key between untrusted nodes or operators for ETH staking. SSV (Secret Shared Validators) is a native token of SSV.Network. The main use cases of SSV are payment and governance.

Payment – ​​as a way for the stakeholder to compensate the operator for management of the validator;

Governance - a way to participate in decision-making and fund allocation related to SSSV network.

 6. FLS

StaFi is a DeFi protocol that frees up liquidity of collateral assets. Users can stake PoS tokens (such as DOT, FIS, etc.) through StaFi staking contracts and get rTokens (such as rDOT, rFIS, etc.) in return, which can be used to trade to hedge market volatility while still obtaining collateral gains. Verifiers in StaFi consensus need to invest in FIS to join the consensus network, and nominees need to stake FIS to participate.

To avoid system abuse, the initiator of the transaction must pay FIS to access computing resources. This will eliminate invalid transactions, similar to other Polkadot chain features, and most of the platform fees (transaction fees and liquidity fees) of the StaFi protocol will be used to fund the repurchase and burn of FIS tokens. According to governance decisions, the distribution of StaFi revenue may change.

 7. PSTAKE

pSTAKE is a liquid pledge protocol based on Proof of Stake (PoS)-based assets that unlock the true potential of pledged PoS assets (such as ATOM), allowing holders of pledged assets to receive rewards while maintaining the liquidity of the assets. PoS token holders can deposit their tokens into the pSTAKE platform to mint unsolicited tokens in 1:1-pedaled ERC-20 packages, expressed as pTOKEN (such as pATOM). It uses custom bridges to help the Cosmos ecosystem grow, while improving the liquidity and composability of Ethereum ecosystem assets.

 8. SWISE

StakeWise is an Ethereum 2.0 staking service, committed to achieving the highest profits for users. StakeWise is a liquid staking protocol that distributes users' deposits and pledge reward tokens through sETH2 (deposit token) and rETH2 (reward token). All tokens are 1:1 mapped to the ETH in the pool, which means that the tokens are pledged on the Ethereum chain.

Staking opens a new avenue for crypto news enthusiasts to actively participate in the maintenance and security of blockchain networks while earning rewards. With the continuous transformation of the crypto market, staking represents a big step towards a more participatory and sustainable blockchain ecosystem. The editor recommends that it is best to choose a reputable blockchain project when choosing, and understand its risk control measures, and not be confused by short-term returns. Always do a good job in risk management and avoid overinvestment or overreliance on a single project.