Participation within the DeFi and staking ecosystems has seen explosive progress over the past yr, with the mixed sectors presently accounting for over $50 billion in worth.
DeFi progress was predominantly fueled by the breakthrough success of Ethereum-based initiatives reminiscent of Aave, Compound, and Uniswap, using ERC20 stablecoins like USDC and Dai to generate yield. Digital belongings staked on different networks have been left behind, unable to take part within the rising DeFi ecosystem.
If these stakers wished to entry DeFi with out introducing new capital, they wanted to unstake and promote their investments to enter the market. That meant giving up on potential capital positive factors and staking rewards from these belongings.
Singapore startup RAMP DeFi is now pioneering another resolution, opening up participation within the Ethereum-based DeFi ecosystem – with out giving up the long run advantages of different staked digital belongings. It has attracted funding from Alameda Analysis, IOST, and Blockwater Capital, amongst others.
A Cross-Chain Liquidity On/Off Ramp
RAMP DeFi’s modern decentralized protocol resolution proposes that capital staked on non-Ethereum blockchains will be collateralized into a brand new stablecoin “rUSD” issued on Ethereum, performing as a bridge between non-ERC20 tokens and the Ethereum chain.
By lending/borrowing, bootstrapping stablecoin liquidity, and integrating with different DeFi options, rUSD holders can both deploy rUSD into increased yield producing alternatives or swap into USDT/USDC. This creates a seamless on/off ramp for customers with staked capital on different chains to entry DeFi with out giving up future potential positive factors or rewards from the collateralized digital belongings.
How Does It Work?
For every blockchain “X” built-in, a RAMP staking node and sensible contract on blockchain X are set as much as handle the belongings. Token X is staked within the RAMP ecosystem to proceed to obtain blockchain X staking rewards.
A Wrapped Token X is then issued and used to collateralize and mint a blockchain X native stablecoin, xUSD. xUSD is predicated on a collateralization ratio just like MakerDAO.
xUSD can then be swapped into the ERC20 rUSD stablecoin, utilizing the on/off ramp cross-chain bridge. From there, rUSD will be deployed into yield farming alternatives or swapped immediately for different stablecoins utilizing decentralized liquidity swimming pools.
A Broadening Ecosystem That’s Gaining Traction
RAMP DeFi’s liquid staking resolution opens up an ecosystem of companies, belongings, and alternatives that’s already starting to achieve traction:
rStake is the a part of the ecosystem the place non-ERC20 tokens are staked and wrapped tokens are issued to symbolize the possession of the underlying belongings. It’s an aggregator of staking nodes on the collaborating blockchains, returning 70% of the staking rewards to the consumer, incentivizing participation by further RAMP governance token rewards. The remaining staking rewards generate charges for the RAMP ecosystem to assist with stability.
rStake has already launched integrations for the IOST, TomoChain, and Tezos blockchains.
rMint makes use of the wrapped tokens issued by rStake as collateral to mint a stablecoin for the respective X blockchain (xUSD). xUSD is then swapped into ERC20 rUSD to make use of within the Ethereum DeFi ecosystem, incomes RAMP rewards within the course of.
Early adopters embrace Elrond, NULS, and Solana for cross-chain DeFi farming.
The Vaults utility platform for RAMP and rUSD permits holders to stake, farm, and take part in yield stacking alternatives.
rUSD can be swapped for USDT/USDC immediately, and Vaults can connect with present options reminiscent of YFI, Uniswap, or Sushi.
rKeeper manages the conversion of liquidated belongings into stablecoins for rUSD the place obligatory for worth assist or redemptions. rKeeper converts the worth of liquidated belongings into USDT/USDC on the equal rUSD initially minted.
The repurchase of rUSD by rKeeper solely takes place when rUSD is lower than 1:1 with USDT/USDC, creating stability for rUSD utility.
The charges generated by rStake are used to purchase again and burn RAMP, eradicating tokens from circulation. rBurn is designed as a “sensible burn” mechanism that once more helps present stability for rUSD as a substitute steady coin and bridge to the Ethereum-based DeFi community.
Opening Up Defi To Non-ERC20 Tokens
RAMP DeFi introduces an answer with the potential to unlock over $30 billion in a beforehand illiquid staked digital asset sector, set to increase fourfold with the transition to Ethereum 2.0 alone.
The RAMP ecosystem represents thrilling progress potential for DeFi, harnessing present success whereas opening up additional potentialities for ERC20 and non-ERC20 tokens to achieve entry to further yield producing companies. It frictionlessly connects a spread of digital belongings to the decentralized finance market, throughout an more and more interoperable house, boosting DeFi adoption in consequence.
Picture by WorldSpectrum from Pixabay