A DeFining proposal awaits your approval—maximizing the upgradability, security, and flexibility of IoTeX.
IIP-13 (IoTeX Improvement Proposal 13) clears the way for Liquid Staking dApps and interest-earning derivatives to flourish in the IoTeX ecosystem.
By enabling new use cases for staked IOTX, this IIP can contribute to a more dynamic and versatile ecosystem, ultimately benefiting token holders and developers alike.
By representing staking buckets as non-fungible tokens (NFTs), the IoTeX network can leverage the unique features of NFTs to enhance protocol security, making it easier to track and manage individual staking buckets.
As NFTs, IOTX staking buckets can now be leveraged as collateral and freely traded, reducing the token's circulating supply and spurring network participation.
IIPs are essential to bolstering IoTeX's position as the leading choice for emerging DePIN economies and strengthening the network's security.
Community voting is now open for IIP-13. Cast your vote today.
Maximizing Layer One
As the fastest, most energy-efficient, and widely used consensus mechanism, Proof of Stake (PoS) secures most of today’s blockchains, including IoTeX Layer One (L1).
This PoS mechanism disincentivizes network attacks, creating crypto-economic security—the higher the ratio of staked to unstaked coins, the more secure a blockchain is.
Increasing the total amount of staked IOTX will enhance security, which has always been the goal for IoTeX.
How do we plan to do that?
Enter Liquid Staking
Currently, staking on IoTeX L1 is implemented in a native way, which does not support interaction from smart contracts.
Before Lido arrived in 2020, the traditional staking method was to lock assets for an extended period in exchange for a predetermined reward.
There are drawbacks to this method; while favorable for crypto-economic security, for technical reasons, solo (native) staking is inherently prohibitive for you, the individual. Lido’s solution to this dilemma is Liquid Staking.
How does it work?
In a nutshell, Liquid Staking dApps accept coin deposits, stake them, and provide a receipt to redeem the staked assets—they enable derivatives, in our case stIOTX, to transform illiquid assets into liquid ones.
To better support Liquid Staking and other innovations at the smart contract or dApp level, IIP-13 suggests adding support natively to represent staking buckets as NFTs on IoTeX L1.
So Liquid Staking solutions, which rely on smart contracts, could manage their stakes in system smart contracts.
With this feature implemented and deployed on testnet and mainnet, builders can easily launch their respective Liquid Staking dApps, such as Lido and RocketPool on IoTeX.
This receipt (representing the staked assets) can be freely traded or used as collateral in strategic scenarios like:
- Compounding interest: leverage your assets, and earn passive income with DeFi strategies like liquidity pools and borrowing & lending.
- Maximizing yield: Put your IOTX stake to work with a tradable NFT (representing your native staking bucket) that can be deposited in DeFi dApps to earn stIOTX rewards.
We’re still finalizing the details, but one thing is certain: IIP-13 maximizes earning potential for all IOTX stakes.
Various staking bucket sizes, including those eligible for burn-drop, will qualify for conversion.
Converted and new staking buckets will start at 10,000 IOTX and have a 30-day staking duration.
By creating liquidity (with stIOTX) where before there was none, opportunity cost is a thing of the past.
In its nascency, Liquid Staking’s mechanisms could undergo significant changes over time, and we’ve planned for that.
As futureproofing, IIP-13’s open design allows optimum flexibility, supporting the integration of developer staking contracts as plugins.
Why IIPs Matter
IoTeX Improvement Proposals (IIPs) orchestrate the development of features that make IoTeX the go-to platform for smart devices and all things data-driven.
IIPs are instrumental in ensuring IoTeX remains stable and secure while improving transparency and giving a voice to community members during the governance process.
As they drive continuous advancement, IIPs play a vital role in IoTeX’s evolution.
Upgradeability, security, and flexibility are essential for IoTeX as it distinguishes itself as a leader in the fast-growing DePIN sector.
Several leading blockchains have successfully adopted Liquid Staking in this regard, including Ethereum, Polygon, Solana, and Polkadot.
Let’s add IoTeX to that all-star roster.
We’re not stopping here—weigh in on the upcoming improvements on the IoTeX governance portal.
Community voting is now open for IIP-13. Cast your vote today and make DePIN history with us.