Staking Innovation: A Five-Year Retrospective
Staking has undergone many significant updates over the past five years, each new development improving some element of innovation behind the process. As a fundamental mechanism in the decentralized finance (DeFi) space, staking has driven — and been driven by — blockchain technology advancements and cryptocurrency adoption.
Within the last five years, projects like Jellyverse have continued to build upon the innovation of staking — adding to its vast number of features, utilities, and the potential it has to bridge the space into the world of traditional finance (TradFi).
Staking: Laying Roots
In the earlier days of cryptocurrencies, staking was introduced as a fundamental part of the Proof-of-Stake (PoS) consensus mechanism. The PoS concept was introduced as early as 2011 on the renowned forum Bitcointlk by a user named QuantumMechanic.
Unlike the Proof-of-Work (PoW) consensus — which relies on computational power — PoS enables users to validate transactions on a blockchain, helping create new blocks. The user contribution to block creation is based upon the tokens help and the amount of those tokens that they are willing to delegate or “stake” as collateral.
This new approach aimed to address the energy inefficiency of the PoW consensus model while delivering a scalable blockchain network solution. The launch of Ethereum 2.0’s Beacon Chain in 2020 — which shifted Ethereum from PoW to PoS — laid the foundations for staking, exemplifying the power to incentivizing participation and secure network operations.
Faded Features Now Forgotten
As staking accumulated attention over the years, several features like delegated proof-of-stake (DPoS) came to light, only to fall back to darkness due to centralization concerns. Staking is focused around decentralization and as such, the principles behind its functions have to reflect that to help foster adoption and sustainability for future use.
Jellyverse does this in a streamlined fashion with non-fungible tokens (NFTs) dubbed Staking-NFTs. Through this innovation — referred to as JellyStake — users can accrue protocol revenues through participation after connecting their staking position to an NFT.
By fusing staking with NFTs, platforms like Jellyverse grant investors the ability to enter staked positions with gamified staking activities. This unique staking solution opens up a path to opportunities in the future otherwise inaccessible to other platforms and avoids fading into history.
Staking Fundamentals
Looking at the last five years, two fundamental elements of staking have remained unchanged, integral to the staking process: decentralization and security.
These two elements are vital for most PoS blockchain networks to ensure user participation remains fairly balanced without compromising user funds or exposure to centralization risks. By granting users that stake the ability to earn passive income securely, PoS networks establish long-term stability for not just the delegating stakers, but for the network itself as participants validate new blocks.
Co-founder of Ethereum, Vitalik Buterin has publicly indicated the importance of privacy, decentralization, and the development of a secure staking process to ensure blockchain longevity. Even with advancements in staking solutions like liquid staking platforms, platforms that allow users to stake assets while retaining liquidity through derivative tokens, decentralization and security always remain a priority.
Through the adherence to these two staking fundamentals, the innovation of staking has remained flexible, accessible, and progressively appealing to the growing DeFi population.
Jellyverse: Steady Staking Without Wobble
Jellyverse is an advanced DeFi 3.0 ecosystem compromised of the latest in staking solutions, a community-led decentralized autonomous organization (DAO) dubbed Jellyverse DAO, and more. The ecosystem aims to ensure long-term, stable, yield-driven opportunities for users through sustainable incentives and innovation.
The Jellyverse revolves around its core staking solution, JellySwap, a decentralized exchange (DEX) built on the Sei Network. Unlike other staking solutions, JellySwap distributes revenues to stakers through decentralized indices, weighted pools, and optimized math for stability in all coin swaps.
By integrating innovative Staking-NFTs, the user staking process remains easy to navigate, secure and offers stakers potential future opportunities for trading staking positions as NFTs. Furthermore, the Jellyverse also utilizes the jAssets system which uses multiple ERC20 standard tokens as collateral to provide users with a secure and diverse staking experience.
Incorporating all the best staking practices and advancements of the last five years, Jellyverse is helping towards further decentralizing and stabilizing the staking process for all participants.
What Lies Ahead For Staking
As multiple new trends in staking steadily appear, there is one clear trend that could change the entire staking experience — cross-chain staking. By facilitating staking assets across different blockchains in a seamless manner, cross-chain staking maximizes the potential utility of assets staked by delegating participants.
Moreover, the incorporation of real-world assets (RWAs) into staking mechanisms is quickly gaining traction. Platforms like Jellyverse are building on these foundations, integrating RWAs with synthetic assets that enable users to move into less volatile synthetic alternatives.
Though the past five years have seen huge leaps in staking advancements, it is clearly a technological innovation that is only getting started. While platforms like Jellyverse help break the limits of the staking space, stakers of the future can expect to see only more fruitful opportunities over time.