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Velar is teaming up with StackingDAO to inject more liquidity into the market to support “Stackers”, or those who stake STX crypto to support the Stacks Layer-2 blockchain. It’s doing so through the launch of a new stableswap trading pair for STX/stSTX tokens, which is available now on its decentralized exchange platform.
Stacking is crucial for Stacks, one of the leading decentralized networks bringing smart contracts to Bitcoin. Stacking really just means staking, where STX token holders lock their funds into smart contracts to support validators who process transactions on the L2, boosting its security. But one of the primary differences between Stacking and staking other tokens is that users don’t earn the native token as rewards, but rather BTC.
It’s in the interest of Stacks and other projects built atop of it, like Velar, to entice more STX holders to stake their tokens and boost the strength of the network, and that’s what the new stableswap pair STX/stSTX is all about. Traditionally, Stackers have to wait a while to unlock their staked STX tokens, which means they’re unable to access their capital when they need it. With the new trading pair on Velar, users can quickly swap stSTX tokens, which are dished out to Stackers on a 1:1 basis for every STX they stack, so they can quickly enter and exit a staking position, boosting capital efficiency.
It makes sense for Velar to support the growth of Stacks in this way, as doing so will help to accelerate its broader mission of bringing greater utility to the Bitcoin ecosystem and BTC holders. Velar is a liquidity protocol that’s best known for its Bitcoin-based perpetuals and DEX platforms. It taps into Bitcoin’s security while leveraging Stacks to achieve greater scalability.
Through its DEX and other offerings, Velar provides BTC holders with a way to use those funds as collateral in various DeFi protocols on Stacks. It’s playing a key role in the evolution of Bitcoin, as the world’s top cryptocurrency morphs from being a store of value to an asset that’s just as flexible as altcoins like ETH or SOL.
Velar says the STX/stSTX trading pair will help to solve a growing liquidity challenge in the Stacks ecosystem. It does this in a couple of creative ways, using a specialized “stableswap curve” mechanism to enable swaps with lower slippage and reduced fees that are palatable to those holding big bags of STX and stSTX.
In addition, Velar is going all out to encourage STX and stSTX holders to provide liquidity for its swaps with some enticing incentives. These include a share of the 5,000 VELAR daily rewards pool for liquidity providers, and the promise of a 50% increase in StackingDAO points earned by those who stack STX via that protocol.
The StackingDAO points don’t amount to anything just yet, but in many projects “points” are awarded to users for their participation and engagement, and are later used to determine eligibility for airdrops and other token rewards. That’s why most Stackers are keen to amass as many points as they can, and providing liquidity to the STX/stSTX pool will be a great way to obtain even more.
With such strong incentives, Velar is confident that it can attract enough liquidity to support even the largest institutional investors that need an efficient, low-cost way to swap thousands of STX tokens and their staked counterparts.
It’s also good to see the increased unity within the Stacks ecosystem. StackingDAO, along with Velar, is one of the biggest protocols running on Stacks. It’s a liquid staking protocol for Stackers that allows them to unlock liquidity while providing added protections against impermanent loss to boost investor’s returns from yield farming activities.
StackingDAO’s expertise is evident in the stableswap pool’s “upgradeable variable midpoint”, which is a feature that’s designed to protect LPs and limit any impermanent loss they might suffer.
Velar Chief Marketing Officer Peter Watson said the launch is a “proud moment” for him and his team. “Collaborating with the talented StackingDAO team has been an incredible experience, and together, we’re setting a new benchmark for what’s possible in Bitcoin DeFi,” he insisted.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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