StakeStone founder Charles K shares about revolutionizing liquid staking and the true value of Total Value Locked
Q: Thanks for taking the time to speak to me today Charles. Can you share more about yourself and StakeStone?
Charles: Thanks for having me. Let me give you a bit of background about myself and the inspiration behind StakeStone. As a kid, I was somewhat shy and nerdy, with a deep love for computers. Growing up during the meteoric rise of Web 2.0, the expansion of big tech firms, and the advent of cryptocurrency was incredibly inspiring and transformative for me.
I was particularly moved by the success stories of Silicon Valley tech giants like Apple and Facebook, as well as the rise of Chinese technology companies such as Alibaba. This inspiration drove me to participate in numerous technology innovation and entrepreneurship competitions during my college years. At 23, my friends and I launched our own business—an e-commerce marketplace that offered daily deals by selling vouchers for services and entertainment. Our business was eventually acquired by a publicly listed shopping platform, where I then led their food delivery business.
Since the Ethereum Shanghai upgrade, we have been conducting in depth research and education regarding the staking landscape and its future. The rise of Liquid Staking Tokens (LST) and Liquid Staking Derivatives (LSD), along with innovations in Liquid Staking Tokenized Finance (LSDfi) has heralded a new paradigm shift for Ethereum.
Ethereum, which has been a cornerstone of the crypto world, is no longer as viable for us as a liquid asset due to its opportunity cost under the Proof of Stake (PoS) mechanism. We identified a unique opportunity to create a liquid asset with adaptive and optimized yield opportunities addressing the needs of DeFi communities, institutions, as well those seeking staking options that offer transparency, true liquidity, omnichain accessibility, and token standard consistency – StakeStone offers just that.
Q: There are quite a few liquid staking/ restaking protocols out there, what makes StakeStone special?
Charles: The vision of StakeStone from day one was to build a yield and reward bearing liquid ETH that’s widely trusted and adopted rather than just building a staking pool or a restaking protocol. Currently, StakeStone has over 185K ETH staked across 150K users, with over 90% utility rate on L2 ecosystems and DeFi protocols. Our solution creates a liquid ETH with adaptive and optimized yield opportunities, fitting the liquidity market of the consensus layer beyond Eigenlayer.
We believe that building the credibility and utility of STONE goes hand in hand and the fulfillment of the following criteria makes STONE the universal standard of liquid ETH for various utility scenarios:
Transparent: Our non-custodial approach ensures complete transparency of underlying assets and returns. Akin to MakerDAO, StakeStone is committed to building a fully on chain asset that is governed on chain, offering full transparency of staking routes.
Truely Liquid: StakeStone leverages deep and efficient omnichain liquidity for easy redemption with minimal price impact. Users can opt for instant withdrawals, enjoying the flexibility of no lock-up periods. Unlike other staking protocols where ETH often sits idle in buffer pools, our innovative design allows a portion of ETH to be dynamically allocated and deployed to a separate underlying yield strategy – a PMM lending pool for market makers to provide exit liquidity for STONE holders across multiple chains, ensuring optimal liquidity and yield generation.
Omnichain: STONE and its price feed flow seamlessly across multiple chains, ensuring broad accessibility. This allows for dynamic adjustments and coverage of opportunity costs through an adaptive staking network, providing users with broad access, smooth transactions, and consistent price feeds across various chains.
Adaptive: STONE is compatible with multiple consensus mechanisms, including PoS, Restaking, Decentralized Sequencing, AI, and more. Our unique modular architecture, which separates the minter contract from our strategy vault contract, allows for adjustable underlying strategies and optimized yield source opportunities. This flexibility ensures that users can benefit from a variety of consensus mechanisms while maximizing their yield potential through tailored strategies.
Optimized: With decentralized portfolio strategy, liquidity is reallocated effortlessly, maximizing staking yields. Under the staking pool logic, their users select a specific fixed yield source, however for mass adoption of our liquid ETH, STONE holders require the flexibility of switching underlying portfolio, for example from Eigenlayer to Symbiotic, Ora and other consensus mechanisms such as decentralized sequencing, DePIN etc
Consistency: Upgrading the smart contract or adjusting STONE’s underlying assets does not impact the circulating STONE, ensuring the token’s stability. This stability is by our modular architecture and rebalancing design, which facilitate seamless DeFi integration and reward yield accrual on L2 as well as both institutional and mass adoption. Liquidity providers only need to hold STONE or utilize it across various scenarios, including DeFi, IDO, IMO, INO, payments, and even as collateral on centralized exchanges, unlocking a wide array of CeDeFi use cases.
Q: How do you perceive the current landscape of liquid staking and the broader DeFi market? What trends and opportunities do you see shaping its future?
Charles: The current DeFi market emphasizes Total Value Locked (TVL) as a key metric, heavily influencing valuations and market dynamics. However, a high TVL is frequently accompanied by significant levels of debt, creating substantial sell-side pressure in secondary markets. This reliance on TVL imposes an opportunity cost within the ecosystem, as liquidity is not always efficiently utilized.
For TVL to be truly valuable, assets locked must be actively used by protocols and other applications within the ecosystem. Furthermore, any TVL attracted by incentive programs or reward systems needs to be sustainable. This is why StakeStone advocates for the concept of Total Volume Trusted (TVT), focusing on genuine trust and utility within the ecosystem.
The future of liquid staking protocols should be grounded in organic growth and the ability for assets to be redeemed at any time. Inefficient redemption strategies in liquid restaking protocols can lead to a depegging of token value from actual value. StakeStone, on the other hand, supports instant withdrawals. With over 185K ETH staked across 150K users and a utility rate exceeding 90%, we demonstrate that “locked value” is only meaningful when assets are utilized effectively.
To conclude, assets within an ecosystem should be fully liquid and efficient, not merely locked. StakeStone aims to transform the TVL paradigm by providing ecosystems with efficient and healthy liquidity solutions that cover the opportunity cost of ETH and BTC.
Q: What’s next for StakeStone? What strategic goals are on the horizon for your team? How do you envision the platform evolving to meet the needs of the ever-changing DeFi landscape?
Charles: In order to change the market’s emphasis from Total Value Locked to Total Value Trusted, StakeStone will focus on three key verticals in the short to mid-term. Firstly, we aim to expand our liquid assets to include Bitcoin, addressing user demand for diverse staking options. Secondly, to broaden the consensus layer, StakeStone will integrate Symbiotic as one of our underlying assets while keeping AI and other promising protocols on our watchlist. Lastly, we will continue to expand our use cases within existing integrated ecosystems, encompassing AI, GameFi, and payment applications to create a more diversified ecosystem.
StakeStone’s goal is to become the pioneer of liquid assets and staking. By abstracting away staking routes and simplifying the user journey, we aim for mass adoption of liquid assets among both newcomers and web3 native users. Through consistent optimization of our underlying strategy vault and increasing liquidity efficiency, StakeStone is poised to become the leading yield bearing liquid asset protocol.
======
About StakeStone
StakeStone is an omnichain liquidity asset protocol building an adaptive staking network for liquid ETH / BTC. Through its yield-bearing asset, STONE/STONEBTC, it allows for asset staking beyond the traditional consensus layer. It is fully decentralized, has multi-underlying asset compatibility, automatic yield optimization, and maximizes capital efficiency for the crypto space. StakeStone is dedicated to establishing new standards for liquid assets and enhancing liquidity distribution to earn widespread user trust and adoption. For more information, visit our website at stakestone.io or follow us on Twitter @Stake_Stone.