By the end of 2023, liquid staking remains one of the priority ways to generate passive income. Users often choose this investment strategy if they do not want to actively participate in the process or understand more complex income methods, such as yield aggregation.
Liquid staking involves providing and locking assets in a liquidity pool to receive rewards.
Unlike traditional staking, which requires a lock-up period till the end of the staking period, liquid staking allows users to use their funds. Despite the existing lock-in period, in return users receive additional tokens that represent their share of the pool.
Source: Stader Labs
This investment strategy remains popular as users can not only receive income from staking, but also use additional tokens in the DeFi space to generate additional profit, as well as participate in other crypto projects and applications.
Despite the variety of opportunities offered by liquid staking, several outstanding protocols in the market offer users certain advantages that set them apart from the competition. Today's review from Notum will help you understand in detail what the Stader platform is, what unique features it offers, and what investment strategies are worth considering in 2023.
Stader Platform: The Essentials
- Average APY: 3.50%
- Risk Level: Low
- Blockchains: Ethereum, Polygon, Hedera, BNB, Fantom, Near, Terra 2.0
- Foundation Date: Apr, 2021
Stader Labs is a non-custodial liquid staking platform that is made to ease the search of staking options and offer the best staking solutions. Stader operates on smart contracts and provides users with maximum security for their crypto due to their leading blockchain experts.
‘It acts as an essential staking middleware infrastructure for various Proof-of-Stake (PoS) networks, catering to retail cryptocurrency users, exchanges, and custodians' – Stader.
Stader facilitates the use of staking and allows users to find the most suitable and profitable investment opportunities for PoS networks.
The operating principle of the platform is quite simple: the user deposits any number of tokens in one of the offered networks to receive rewards. After connecting crypto wallet to the platform, the user must enter the asset amount they want to stake and follow the instructions on the main page. Depending on the selected network, Stader Labs staking will also show the annual staking rewards as a percentage and the TVL of the staking asset on the platform.
For example, in the case of ETH staking, the annual staking reward on Stader is 3.91%, and TVL is currently more than $97 million. After entering the amount of ETH to stake, users will receive additional liquid tokens (ETHx), which represent their share of the pool.
Additional tokens allow users to explore additional reward opportunities while still receiving rewards for staking their main asset.
If the user wants to stop the staking process, they can click on the “unstake” button on the staked assets tab. Although the staking process can be stopped at any time, the conditions may vary depending on the selected network. For example, in the case of ETH staking, the request is processed on average around 7-10 days, while withdrawing MATICx usually takes 2-3 days.
Staking rewards on Stader vary depending on the network and token chosen. For example, staking Matic on average brings users 5.25%, while Ethereum is 3.91%.
Why Invest in Liquid Staking With Stader?
Liquid staking is one of the most popular investment strategies of 2023 as it offers users several benefits such as:
- Additional rewards. Liquid staking not only allows users to receive rewards from staking their assets but also provides them with additional tokens that can be used to earn additional profits.
- Participation in DeFi projects. Since liquid staking is often integrated with DeFi projects, users have access to a wide range of financial services, such as loans, asset exchanges, and more.
- Proof-of-Stake Networks’ Security. Participating in liquid staking helps ensure the security of the blockchain network by increasing the number of staked coins. Since Stader works specifically with PoS networks, staking assets on the platform increases the security of the network chosen by the user.
- Flexibility in asset use. Users can trade or use their staked assets in liquid markets, increasing the potential use of their cryptocurrency. In addition, they can often also participate in votes regarding the network or protocol development.
“The main advantage of LS is the ability to earn money from your crypto assets while still being able to freely use them in the DeFi space.” – Notum.
Thus, liquid staking on Stader is an excellent opportunity to generate passive income with a low level of risk and moderate user involvement. Moreover, the platform offers an automated process and increased security thanks to constant audits, bug bounty, and on-chain monitoring.
However, before investing in liquid staking with Stader, note that it offers relatively low rewards with an average APY of 3.50%, while its rival Lido has an APY of 4%. But at the same time, Lido, the monopolizer of liquid staking, only supports two networks – Ethereum and Polygon, while Stader offers users seven supported blockchains.
As you know, Stader offers several liquid staking investment strategies on its platform. The most popular of them is ETHX (Stader - Ethereum), which we will consider today:
ETHX on Ethereum
Total APY – 3.5%, TVL – $95.37M
This investment strategy allows users to deposit ETH into a liquidity pool to earn passive rewards. In addition to receiving rewards from staking, users who stake ETH also contribute to the security of the Ethereum network. The interest rate for staking ETH on Stader often varies from 3 to 4%.
After providing funds, users receive ETHx liquidity tokens that can be used in the DeFi ecosystem. With ETHx, users can participate in other projects, take part in voting, and even receive additional rewards. At the moment, the exchange rate is 1 ETHx = 1.015786 ETH, and the transaction cost is $15.39.
Stader Labs: Risks
While liquid staking platforms are an easy and convenient way to earn passive rewards, they are not without risks. According to Stader, the platform is audited and secured by leading blockchain experts, which means that its use is safe.
Moreover, Stader has a bug bounty, on-chain monitoring, and regular audits by Halborn, PeckShield, BlockSec, and others. Stader has undergone one audit that proves a basic security check, which maintains this standard through a recent audit shows consistency.
However, the platform still has some risks, the main of which are:
- Smart contract risk. Since Stader, like most other liquid staking platforms, runs on smart contracts, it may be susceptible to bugs, vulnerabilities and exploits. However, Stader has a fairly good reputation and has no known exploits or hacks, which emphasizes its security.
- Volatility. As you know, cryptocurrency is a volatile asset with a changing value, which means the income from staking is unstable.
- Technological risk. Blockchain platforms and smart contracts may be susceptible to technical problems, bugs or malicious attacks, which may result in a loss of funds.
- Slashing risk. Stader and other similar platforms are also often subject to risks associated with staking tokens, the main one is a possibility of slashing events.
However, these risks are quite general and apply to almost all liquid staking platforms. Stader, in turn, does everything possible to ensure the maximum security of the protocol and user funds.
Actual Risk Score
Weight in percentage
|Overall protocol passed 1 Audit
|Protocol Audits in the Last 2 Years
|1 Audits passed in the last 2 years
|There are no known exploits
|Protocol’s Exploits for Current Version
|There are no known exploits
|The protocol has been running for more than 2 years
|Protocol’s Liquidity (TVL)
|Protocol overall liquidity exceeds $100M
Stader is an easy-to-use liquid staking platform with a user-friendly interface that offers users staking solutions on seven different networks. While giant Lido only supports Ethereum and Polygon, Stader offers Ethereum, BNB, Polygon, Terra, Hedera, Near, and Fantom staking.
By investing on Stader, users receive additional tokens that can be used in the DeFi space for extra income, in addition to the main rewards received from staking assets.
With a TVL of over $242 million and a low-risk level, the platform is an excellent choice for both beginners and advanced investors. Despite potential risks such as market volatility and smart-contract risks, Stader firmly holds its position in the DeFi market.
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Disclaimer: Notum does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Cryptocurrency is subject to market risk. Please do your own research and trade with caution.