Stader Labs Explainer Content - Morektz

--- tags: superteam title: Stader Labs Explainer Content - Morektz description: Superteam Bounty Entry ---   [ :arrow_left: MorektzBountySmash](https://github.com/morektz/MorektzBountySmash) <a href="https://staderlabs.com/" target="_blank"> <img src="https://i.imgur.com/lKq6922.png" alt="Morektz"/></a> --- [TOC] --- # :large_blue_circle: BOUNTY DESCRIPTION This writeup is for the [SuperTeam.fun - Stader Labs Explainer Content Bounty](https://superteam.fun/500-bounties/stader-labs-deep-dive) # :black_large_square: WEBSITE & UI OVERVIEW ## Website Overview The following is a gif illustrating the overview of their main website. You can download the full resolution gif from [HERE.](https://github.com/morektz/MorektzBountySmash/blob/main/D/STBSL/WO.gif) :::spoiler <a href="https://staderlabs.com/" target="_blank"> <img src="https://github.com/morektz/MorektzBountySmash/raw/main/D/STBSL/WO.gif" alt="Morektz"/></a> ::: ## Usage Overview In order to use Stader Labs, the [Terra Station Wallet Extension](https://chrome.google.com/webstore/detail/terra-station-wallet/aiifbnbfobpmeekipheeijimdpnlpgpp) needs to be installed. Upon installation you will have to create your wallet. :::danger :no_entry: Never share your `24` word mnemonic with anyone. Doing so will give the person access to you wallet. ::: The following is a gif which illustrates the usage of the following features in detail. 1. Stake Pools - Pools - Blue Chip - Community - Airdrop Plus - Strategies - Auto Compound Rewards - Ability to set the ratio between Auto Compound Rewards and Retain Rewards - Portfolio - Community Farming - SD Rewards Vesting - My Holdings - Overview of all your assets - Manage Holdings - For Deposits and Withdrawals 2. Liquid Staking - Pools - Stake and Unstake - Add liquidity - Adding liquidity is done via [TerraSwap](https://app.terraswap.io/) - Swap - Swapping tokens are doine via [TerraSwap](https://app.terraswap.io/) - Rewards - View earned rewards in the form of SD tokens which are distributed every Tuesday based on two random snapshots taken in the previous week :::spoiler <a href="https://staderlabs.com/" target="_blank"> <img src="https://github.com/morektz/MorektzBountySmash/raw/main/D/STBSL/US.gif" alt="Morektz"/></a> ::: You can download the full resolution gif which runs for 3mins 38seconds from [HERE.](https://github.com/morektz/MorektzBountySmash/blob/main/D/STBSL/US.gif) # :black_large_square: WHAT IS STADER LABS ? :::info Approximate TVL as of Thu 10 Feb 2022 06:15:12 PM UTC ~ [$334,626,786.00](https://defillama.com/protocol/stader) ::: [**Stader**](https://staderlabs.com/), is the infrastructure middle layer which enables the building of *staking* & its derived products for crypto projects. It is a modular platform which consists of pre-existing components that can be used by crypto projects. Its objective is to onboard the next billion crypto users into the staking ecosystem[^1]. Its modular architecture brings in vast extensibility, enabling use cases for both retail & institutional investors. :::success :heavy_check_mark: [A complete audit](https://blog.staderlabs.com/stader-update-contract-audits-22dc316bd4aa) of their - Plain/Staking Pools, Liquid Staking contracts was completed on 20-Nov-21. Another audit is also curently in progress. This information is based on their official [blog](https://blog.staderlabs.com/stader-update-contract-audits-22dc316bd4aa). A third audit was also completed and announced on their [official twitter](https://twitter.com/staderlabs/status/1491808523604217866?s=20&t=UWWbXosSONJxFcjmeN076g) on 9-Feb-22 ::: ## Current Capabilities The following are the current capabilities[^1] of their existing components. These are constantly under going development. You can read more about its evolution under the section [Features.](#-FEATURES) 1. Staking with any group of validators (validator index) in a single transaction;monitoring validators’ performance and rebalance across validators for optimal performance. 2. Deploying staking rewards on any protocol, claim airdrops with one click. 3. Liquid staking token issuance (will be launched a few weeks after v1 launch). ## Components The following are the core smart contracts that are the building blocks of Stader[^1]. 1. ==*Delegator Contract*== - Delegators funds will be deposited and can be withdrawn from this contract. 2. ==*Validator Contract*== - Stakes the delegator funds. Claims rewards and airdrops. 3. ==*Pools Contract*== - Overseer of validator contract. Manages stake across each validator pool and supports multiple pools. 4. ==*Strategies Contract*== - Leverages staking rewards and synthetic assets to interact/integrate with other DeFi/ Gaming protocols to amplify yields. The following diagram describes the components and their interactions. :::spoiler [![](https://i.imgur.com/VqhXzu4.png)](https://staderlabs-docs.s3.amazonaws.com/Stader_Litepaper.pdf) ::: :::success :bulb: This ability to interact with individual contracts, greatly enhances the speed of adoption for specific use cases by DeFi ecosystems. ::: ## Extensible Modular Architecture This modular architecture enables[^1] 1. Creation of customized products to meet requirements of speciﬁc delegator groups,such as institutions, can be rapidly built. - A third party can leverage ++Stader Pool's++ contract to build their own pool with validators of their respective geography for tax and regulatory compliance, while enabling one-click staking to their users. - Venture funds can create customized ++Strategies contracts++ that deposit staking rewards into their LP wallets to avoid multiple taxation. 2. Networks can leverage the ++Pools contract++ and include a very high number of validators (e.g. Solana stake pools) in the pool and incentivise stakers to delegate to this pool by potentially paying higher staking rewards. 4. Fintech applications (e.g, Robinhood, Revolut) can use Stader’s ++Delegator contract++ to enable one-click staking right within their app, opening up Staking as a service to all their users. 6. Any DeFi protocol or gaming app can integrate with the ++Strategies contract.++ ## Revenue Model [^1] How will Stader make revenue? In the short- to medium-term, Stader tokens will earn revenue in three ways: 1. Distribution commission from validators: 10-20% distribution fees on validator commissions, if elected by governance stakers. 2. Commission on reward strategies: 2-10% management fees on rewards, if elected by governance stakers. 3. Commission on liquid staking tokens: 5-10% commission on staking rewards, if elected by governance stakers. :::spoiler [![](https://i.imgur.com/HdKExzC.png)](https://staderlabs-docs.s3.amazonaws.com/Stader_Litepaper.pdf) ::: ## Youtube Tutorial Regarding Usage **Stader Labs | Staking Solutions, Luna Auto Compounding, Community Farming Event, and SD Token** {%youtube jF7Av-gEPL4 %} The above youtube has been made by [The Wealth Tip](https://www.youtube.com/channel/UCVpb-1rh89HvvKgugNcNU3A) ## Official Litepaper *Note: If the embedded lite paper is not visible please check your adblocker extensions* {%pdf https://staderlabs-docs.s3.amazonaws.com/Stader_Litepaper.pdf %} # :black_large_square: WHY STADER? [**Stader**](https://staderlabs.com/) research[^1] has indicated the following challenges faced by key stakeholders in the DeFi ecosystem. 1. *PoS networks* face stake-centralization issues. 2. *Delegators* face complexity surrounding discovery and stake management. 3. *Node Operators* struggle to get the right visibility and delegations. # :black_large_square: FEATURES ## Stader V1 [^1] Stader started with [Terra](https://www.terra.money/) because of the ecosystem’s focus on staking, bringing mainstream users to blockchain, and the strong developer community. [Terra](https://www.terra.money/) also has a mature DeFi ecosystem that can be leveraged to build strategies with staking rewards. 1. *Multiple (4-5) validator pools* for delegators to minimize slashing risks and encourage network decentralization 2. *Auto-compounding of rewards* (conversion of stablecoins to LUNA and restaking) leading to higher returns. 3. *One-click airdrops claiming* for Stader stakers enabling much lower transaction costs. ## Stader V2 [^1] V2 will unlock more capabilities for staked assets. A planned launch to a liquid staking token on the staked [LUNA](https://staking.staked.us/terra-staking) and add multiple ecosystem integrations to powers strategies on top of staking rewards and airdrops is currently underway. V1 pariticpants will automatically have access to V2 features. 1. Liquid tokens: A liquid staking token that enables instant unlocking of staked [LUNA](https://staking.staked.us/terra-staking) along with: - Leveraging liquid token as collateral on lending protocols - Access to staking rewards and continue to earn airdrops - Potential LP pool provision on DEXs 2. DeFi strategies: Integrations with one DeFi protocol and one Launchpad on Terra to amplify APY. 3. Gaming integrations: Integrations with at least one gaming protocol powered by rewards. :::spoiler [![](https://i.imgur.com/4U8GRm0.png)](https://staderlabs-docs.s3.amazonaws.com/Stader_Litepaper.pdf) ::: :::success :bulb: Stader V2 unlocks more possibilities for staked assets ::: ## Beyond V2 [^1] Beyond V2's capabilities, the following are also being actively researched on. 1. Additional third-party app integrations and innovations on Terra. 2. Launching and integrating other blockchains (Solana, NEAR, EVM chains, etc.). # :black_large_square: STADER TOKEN (SD) [Stader Token ICO Details](https://cryptorank.io/ico/stader) A successful token sale was conducted on [Coinlist](https://coinlist.co/) on 13-Jan-2022 [^2]. Their official mainnet launch on the [terra chain](https://www.terra.money/) in accordance to their [V1](#Stader-V1-16) roadmap was announced on their official [Stader Labs Blog](https://blog.staderlabs.com/stader-is-launching-on-mainnet-and-its-time-for-you-to-farm-our-sd-tokens-here-s-how-f65f4125ef68) on 8-Nov-2021 ## Tokenomics[^1] The design of the protocol's tokenomics is to encourage long-term sustainability of the Stader Platform. The total supply of Stader tokens is lmited to `150M` The distribution of Stader tokens has been planned to incentivize the community to own a majority of the network while also reserving a suitable portion of Stader tokens to incentivize third parties to build on the Stader platform. The following diagram is the token distribution :::spoiler [![](https://i.imgur.com/HTtjJ1Y.png)](https://staderlabs-docs.s3.amazonaws.com/Stader_Litepaper.pdf) ::: A detailed breakdown is as follows :::spoiler [![](https://i.imgur.com/5Fcl7An.png)](https://staderlabs-docs.s3.amazonaws.com/Stader_Litepaper.pdf) ::: ## Launch Details [^3] The time periods mentioned below are from the date of launch of Stader on mainnet as described in their [Official Blog Post](https://blog.staderlabs.com/stader-is-launching-on-mainnet-and-its-time-for-you-to-farm-our-sd-tokens-here-s-how-f65f4125ef68), which occurred on 20-Nov-21. 1. Currently two products in which farming is applicable for both - Auto-compounding - One click airdrop which happened on 20-Nov-21 2. Liquid Staking token on [LUNA](https://staking.staked.us/terra-staking) which is similar to [aUST](https://www.terra.money/) - Farming of *SD* tokens requires staking *LUNA* with Stader. Staking rewards and stables will be swapped with *SD* tokens. 3. Liquid Staking - LP providers will get *SD* rewards apart from Transaction fees. 4. Price per *SD* started at `$0.43` and increases by `30%` for every `2.2m` *LUNA* [TVL](https://defillama.com/protocol/stader) on Stader. 5. `10%` [*Stakerverse NFT*](https://twitter.com/staderlabs/status/1450541177271246850) for select farmers. ### Launch Breakdown 1. Plain Staking - Farm *SD* tokens by staking LUNA on Stader.`2%` *SD* set aside for this and the farming lasts for `2` months. Initial options include: - *LUNA* Auto-Compounding - 1-Click Airdrops - Validator Pools - Early adopters get exclusive farming price of `$0.43` clost to the [private round](https://cryptorank.io/ico/stader) price. 2. Liquid Staking - Auto-compounded liquid staking is also available on Stader - Avoid the `21`-day unbonding period - Enjoy *LP* incentives across *DEXs* - Leverage owned liquid token while accruing stake rewards - `1%` *SD* rewards are reserved for *LP* providers for the first `2` months. An additional `1%` will be released on demand. 3. What will happen to the earned LUNA from farming? - Earned *LUNA* will be sent to Stader's Treasure Chest - `80%` of it will be used for liquidity bootstrapping on *DEX* - Rest for generating yield for [*Stakerverse NFT*](https://twitter.com/staderlabs/status/1450541177271246850) and other future growth initiatives. 4. Fees and early withdrawal - Post community farming, Stader fee structure will be as below: - `3%` on staking rewards, for auto-compounding - 1-Click airdrops and minimized slashing - Additional reward strategies will incur fees that wil be determined later 5. Early withdrawal fees - Stader would like you to stake with Stader for the long term to enjoy the complete benefits of Stader. To incentivize long-term stakers, there is a small penalty. - `1%` Withdrawal Penalty will be applicable until `2` months after the beginning of farming. There are no withdrawal fees after the first `2` months. 6. Why do you need to join Community Farming with Stader? - `LUNA` auto-compounding - 1-click airdrop claims - Leveraged Auto-compounding liquid staking token and LP incentives - Yield maximizing strategies on staking rewards and airdrops ## Stader Token Utility [^1] 1. Preferential delegations and insurance - Preferential Delegations: Validators will stake a minimum amount of Stader tokens and percentage of delegations to the pool will be proportionately allocated based on Stader tokens staked. - Slashing Insurance will be provided by validators via the Stader tokens staked. 2. Rewards and discounts: - Liquidity Pool Rewards: Liquidity provider incentives for stakers of *SD* <> *UST/Luna*, *SD* <> *Liquid Luna (LunaX)* pools where *SD* is the base token of all pools. - Discount Tokens: *SD* Stakers get a discount on fees charged on Stader solutions. - Withdrawal Fee: A portion of the withdrawal fee from Stader pools would be redistributed among governance stakers. 3. Governance - Governance Tokens: Governance stakers can propose and vote on policies related to validator pool selection, validator selection, changes in methodologies, and more. 4. Leverage Stader infrastructure - Development Access: Protocols/builders to stake SD tokens to access Stader infrastructure/smart contracts. <a href="https://staderlabs.com/" target="_blank"> <img src="https://www.gifs.cc/lines/animated-white-stars-blue-line.gif" alt="Morektz"/></a> # :thinking_face: GLOSSARY [APY or Annual Percentage Yield](https://coinmarketcap.com/alexandria/article/what-is-yield-farming) ~ Yield farmers, and most protocols and platforms, calculate the estimated returns in terms of annual percentage yield (APY). APY is the rate of return gained over the course of a year on a specific investment. Compounding interest, which is computed on a regular basis and applied to the amount, is factored into the APY. [DeFi or Decentralized Finance](https://www.investopedia.com/decentralized-finance-defi-5113835) ~ Decentralized finance (DeFi) is an emerging financial technology based on secure distributed ledgers similar to those used by cryptocurrencies. The system removes the control banks and institutions have on money, financial products, and financial services. [Delagation & Delegators](https://www.coinbase.com/cloud/discover/solutions/delegating-digital-assets) ~ Owners of digital assets from proof of stake (PoS) protocols can do more than simply hold their assets in a wallet. One of their options is to delegate crypto tokens — a process of contributing them to a public validator node to help it conduct PoS validation. [DEX or Decentralized Exchanges](https://www.coinbase.com/learn/crypto-basics/what-is-a-dex) ~ A decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. DEXs fulfill one of crypto’s core possibilities: fostering financial transactions that aren’t officiated by banks, brokers, or any other intermediary. Many popular DEXs, like Uniswap and Sushiwap, run on the Ethereum blockchain. [LP or Liquidity Providers](https://www.benzinga.com/money/how-liquidity-provider-tokens-work/) ~ Liquidity providers are investors who stake their cryptocurrency tokens on DEXs to earn transaction fees, often referred to as liquidity mining or market making. These transaction fees are often denominated in interest rates, and the interest varies based on the amount of liquidity available and the number of transactions in the liquidity pool. [LP Tokens or Liqudity Provider Tokens](https://coinmarketcap.com/alexandria/glossary/liquidity-provider-tokens-lp-tokens) ~ Liquidity provider tokens or LP tokens are tokens issued to liquidity providers on a decentralized exchange (DEX) that run on an automated market maker (AMM) protocol. Uniswap, Sushi and PancakeSwap are some examples of popular DEXs that distribute LP tokens to their liquidity providers. [Liquid Staking](https://coinmarketcap.com/alexandria/article/liquid-staking-and-its-benefits-a-deep-dive-by-lido) ~ Liquid staking is an alternative to locking up a user’s stake: it allows for users to stake any amount of chosen crypto and to effectively unstake it without the requirement of transactions being enabled. This is done through the issuance of a tokenized version of the staked funds — a sort of derivative — which can be transferred, stored, spent or traded as one would a regular token. [Nodes](https://www.ledger.com/academy/what-is-a-node-and-why-should-i-operate-one) ~ Nodes maintain the latest record of the network and consistently verify and approve new transactions. They also ensure that everyone is following the rules set forth by the network. [(PoS)Proof of stake](https://en.wikipedia.org/wiki/Proof_of_stake) ~ Proof of stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. [Staking](https://www.coinbase.com/learn/crypto-basics/what-is-staking) ~ Staking is a way of earning rewards for holding certain cryptocurrencies [Validators](https://www.pcmag.com/encyclopedia/term/blockchain-validator) ~ Also called a "blockchain verifier," validators are computers that maintain the blockchain's integrity by constantly computing the linkage from the first block to the last. There is generally an abbreviated version of the blockchain for this purpose that is much smaller than the full chain, which contains every transaction. [Yield Farming](https://www.coindesk.com/learn/what-is-yield-farming-the-rocket-fuel-of-defi-explained/) ~ The hot new term "yield farming" was born; shorthand for clever strategies where putting crypto temporarily at the disposal of some startup's application earns its owner more cryptocurrency. # RELEVANT URLS 1. [ Stader Labs Official Twitter](https://twitter.com/staderlabs) 2. [ Stader Labs Linktree](https://linktr.ee/staderlabs) 3. [ Stader Labs Official Discord](https://discord.com/invite/xJURAhSmav) # ABOUT AUTHOR <a href="https://bit.ly/morektz" target="_blank"> <img src="https://raw.githubusercontent.com/morektz/morektz/main/imgs/p.png" alt="Morektz"/></a> ## Disclaimer :::spoiler :warning: ALL INFORMATION CONTAINED IN THIS DOCUMENT IS FROM THE [STADER LABS](https://staderlabs.com/) OFFICIAL WEBSITE IT IS FREE FROM ANY DIRECT OR INDIRECT SUBJECTIVE INTERPRETATION. THE AUTHOR IS NOT ASSOCIATED WITH THE ORGANIZATION IN ANY FORM, AND WILL NOT ENTERTAIN ANY INQUIRIES REGARDING THE CONTRACTS, USAGE OR ANY INTERACTION WITH [STADER LABS](https://staderlabs.com/). THIS DOCUMENT HAS BEEN CREATED STRICTLY FOR EDUCATIONAL PURPOSES. THE AUTHOR IS FREE FROM ANY CLAIMS OR DISPUTES THAT ARISE FROM READING AND USING THE INFORMATION IN THIS DOCUMENT. READING THIS DOCUMENT IS EXPRESS AND UNEQUIVOCAL AGREEMENT TO THE CONTENTS AS SET OUT IN THIS DISCLAIMER. :::  # REFERENCES [^1]: [Stader Light Paper - Official](https://staderlabs-docs.s3.amazonaws.com/Stader_Litepaper.pdf) [^2]: [Announcing the Stader Token Sale on CoinList](https://blog.coinlist.co/announcing-the-stader-token-sale-on-coinlist/) [^3]: [Stader is launching on mainnet and it’s time for you to farm our SD tokens. Here’s how.](https://blog.staderlabs.com/stader-is-launching-on-mainnet-and-its-time-for-you-to-farm-our-sd-tokens-here-s-how-f65f4125ef68)