On March 17 2021, Anchor protocol went live.
The release of Anchor protocol unleashed a new era for Decentralised Finance (DeFi) on Terra blockchain. Anchor protocol targets 20% APY for depositors of UST (TerraUSD) by transferring staking rewards of liquid LUNA (bLuna) from borrowers to depositors using a liquidation mechanism that converts bLuna rewards into UST. The result of this, is a seamless user experience that non-native crypto users can easily navigate. Anchor protocol solves APR volatility demonstrated in competing DeFi lending protocols by ignoring a singular asset approach, where the amount of one asset that is able to be borrowed is directly related to the amount of an asset available in a pool for it (assets supplied by depositors). Before Anchor, depositors were exposed to high amounts of liquidity risk. If borrower demand for an asset exceeded what was being supplied by depositors, the asset might be being ‘utilised’ 100%, meaning there are no extra funds available to be borrowed and the full amount of someone’s deposit is being used, opening up the possibility of a bank run.
Anchor has instead chosen to focus on transferring borrower yield to depositors. This minimises liquidity risk as the principal amount that has been deposited by a user is always protected. The yield (APR) that a depositor can achieve in Anchor relies on borrower behaviour.
Liquid staking is the mechanism behind Anchor APY and why we at Chorus are so excited about the protocol. Before the release of Anchor, staked LUNA was not able to be utilised as collateral in DeFi protocols on Terra blockchain and had an unbonding period of 3 weeks. Concurrently with the release of Anchor, Lido DAO announced that they would be providing liquid derivatives of staked LUNA (known as bLuna) that would be used in the protocol. Chorus One is a proud partner of Lido DAO and we are one of 8 validators offering the service to users on Anchor to mint bLuna using LUNA. The newly minted bLuna allows users to earn rewards on their LUNA that is being staked by a white-listed validator whilst also gives the user the opportunity to transfer ownership of the bLuna or use it as collateral — liquid staking at its finest! Understanding the mechanism of bLuna is the key to understanding how depositors are able to earn 20% APY in Anchor.
Borrowers in Anchor use their liquid staking derivative (bLuna) to lock up as collateral in order to borrow TerraUSD (UST). Because the bLuna earns staking rewards and is being used as collateral by borrowers, Anchor protocol is able to liquidate the collateral’s rewards being earned on bLuna by borrowers into UST for depositors. Essentially, Anchor protocol passes on staking derivative cash-flows from borrowers, liquidates the cash-flows into UST and transfers the UST cash-flows onto depositors, to earn them the target yield (20% APY as of time of writing).
If you’re excited by all of this and want to get involved — read on to learn about how you can mint your first liquid staking derivative (bLuna) through Lido, use your newly minted bLuna as collateral to borrow TerraUSD ($UST), earn Anchor’s native governance tokens ($ANC) whilst your bLuna is ‘locked up’ as collateral during the loan and then earn a further stable yield on your newly borrowed $UST by depositing it back into the protocol. This is known as yield farming in DeFi.
Step 1
Make sure you have abided by the prerequisites and you have LUNA in your Terra Station wallet.
Step 2
Navigate to the Anchor webpage and click ‘Web-app’ at the top right
Step 3
Once you have entered into the web-app, you will be shown the ‘earn screen’. This screen shows the amount of interest you can earn on your UST deposit in the protocol, how much UST you have deposited from your wallet so far and your transaction history on Anchor. Right now, we only hold LUNA and not liquid Luna (bLuna). We need to bond our LUNA from the exchange to mint bLuna (a derivative that unlocks liquidity of our tokens earning staking rewards and can be transferred at any time) in order to use our LUNA as collateral to borrow. Navigate to the ‘bond’ tab and click on the tab.
Step 4
Once you have clicked on the bond tab, you will be able to choose the amount of LUNA that you would like to bond. To bond your LUNA, click ‘I want to bond’ field and enter in the number of LUNA you would like to lock-up to mint bLuna (derivative of your LUNA). When you have entered the amount of LUNA in the ‘I want to bond’ field, you will see the amount of bLuna you will receive in return. Once you are happy with the amount of LUNA you want to bond as bLuna, you can choose your validator. bLuna is minted by Lido DAO and Chorus is a proud partner of Lido. Lido DAO has the most trusted validators in the world issuing liquid staking derivatives. When you bond your LUNA as bLuna, you will have the option to choose 1 of 8 (currently) world-class validators, which will stake and earn your LUNA staking rewards whilst you get given a bLuna derivative (claim to your stake with the validator). Chorus One is available as an option to stake your LUNA. When choosing a validator, always be aware of the risks. When you have selected the amount of bLuna you want to mint, the price for each LUNA <> bLuna will be displayed — it should be a 1:1 swap and the tx fee will need to be paid for the swap in UST. When you are happy with the amount of bLuna you would like to mint and you have selected a validator to stake your assets to earn rewards, click ‘mint’.
Step 5
You will be taken to your terra station wallet to sign the transaction. Enter the password you created when you set-up the wallet.
Step 6
Once you have submitted your transaction, wait ~6 seconds (time it takes for a new block to be created on Terra blockchain).
Step 7
Once a new block has been created, you will receive a successful transaction message. You will be able to see the amount you bonded into a liquid staking derivative (bLuna), exchange rate for it (should be 1), your transaction hash and the transaction fee you paid to convert your LUNA into bLuna by bonding LUNA with a validator. If you would like, you are able to view your transaction on Terra explorer. Click on the ‘Tx Hash’.
Step 8
All details of your conversion of LUNA to bLuna is transparent on Terra blockchain and you can view it on Terra Finder — Terra’s explorer.
Step 9
Great! You have now minted bLuna and you are now able to borrow on Anchor protocol (using bLuna as collateral for your loan). Navigate back to the Anchor web-app where you were before and click ‘OK’’.
Step 10
You are now back in the bond tab where you started, navigate to the ‘borrow’ tab and click on the ‘borrow’ button.
Step 11
Now you are in the borrow tab, you are ready to provide the bLuna you just minted as collateral to obtain a loan in UST from Anchor Protocol (and earn ANC rewards for doing so, the governance token of Anchor). On this page you can see the amount of value you have borrowed (none so far), value of collateral you have provided (again nothing yet) and the ‘net APR’ — this is the annual percentage rate of what you earn for borrowing on Anchor — that’s right, you get paid to borrow! When borrowing on Anchor, you earn ANC rewards, the amount of ANC rewards you earn is based on the amount of UST you borrow, using your bLuna as collateral. But first, we need to provide collateral in order to borrow. Click on the ‘provide’ button.
Step 12
Put in the ‘deposit amount’ — the amount of bLuna that you would like to use as collateral. In this example, we will use 10 bLuna as collateral and the system will tell us the maximum amount of UST we can borrow against our Luna as collateral. You are not able to borrow more than 50% of your bLuna amount (denoted in $USD). For example, if you bond 10 bLuna and the value is $20 for each LUNA, your $USD amount of LUNA is $200 (10 * $20). You can only borrow up to $100 USD with your bLuna as collateral in this instance, meaning you can only take a loan out of maximum $100 UST in Anchor. You can see the new borrow limit automated (up to this 50% threshold) that you can take out from Anchor using your bLuna as collateral and the fee for your borrowing transaction. When you are happy with the amount of bLuna you would like to use as collateral, click the ‘proceed’ button.
Step 13
Sign the transaction. The same method as Step 6.
Step 14
Wait for your receipt (~6 seconds to wait for a new block to be created in Terra).
Step 15
Great success! The transaction should have completed. You can see the amount you have collaterised, your new loan-to-value (amount of value you can receive from your loan, maximum 50% in USD of the bLuna you have used as collateral — more on this later) and can see your transaction hash and fee too. You can either view your transaction hash (like in step 8) or you can click ‘OK’.
Step 16
Now you are back in the borrow tab and you have provided bLuna as collateral, which you have previously minted. You are now able to borrow UST on Anchor! You can see the value of your bLuna collateral (denoted in USD), net APR (% of ANC you earn for using your bLuna as collateral), borrowed value (nothing yet) and the type of collateral you have provided — LUNA. In the future, Anchor aims to allow other liquid staking derivatives to be used as collateral — for now though, bLuna is the only available option. You are now ready to borrow — click the ‘borrow’ button in the top right corner of the page.
Step 17
You will now be given options about how much UST you would like to borrow with your bLuna as collateral. The first field is a ‘borrowed amount’ field. This field is automated depending on the green slider below it that you can drag to the left and right of the screen. This slider is the ‘Loan-To-Value’. As explained in step 16, this is the amount of a loan you can take out compared to the value you have put in the system as collateral (bLuna). It is impossible to take more than 50% of a loan out with the value of your bLuna (in USD) so on the right hand side it has a max LTV of 50%. The system recommends a 35% safe LTV. We would recommend much safer than this, perhaps somewhere around the 20% mark to be extra safe. If your loan to value is 50%, you have 10 bLuna valued at $20 — your value is $200. You are able to take out a loan of maximum $100 UST with this. However, if the value of the LUNA drops e.g. to $9 (cryptocurrencies are volatile), your collateral will be liquidated by the protocol to pay your debt as your LTV is 55%. This is because the value of your collateral is now $180, you have a loan of $100, the system does not accept this (too risky) and instead sells your collateral (bLuna) to recover the loan it issued you of $100. You are then left with whatever is left of your collateral that was not sold off by the system to recover its debt. However, if your LTV starts at 25%, you will take out $50 of UST in a loan and have value at $200 USD of bLuna. If the price of LUNA falls to $9 as above (collateral value now $180 USD), your LTV is still much lower than the required 50% threshold (it would be 27%) and here you would be much less susceptible to market risk of LUNA and costs of being liquidated. For the above reasons, we recommend exercising caution and hedging risk by borrowing a very small amount of UST to your bLuna collateral. Click the ‘proceed’ button when you are satisfied with your LTV.
Step 18
Sign the transaction by entering your password, the same method as Step 6, then click Submit.
Step 19
Wait for your receipt.
Step 20
Your transaction is complete! You can view your new LTV, outstanding loan ($UST), transaction hash and transaction fee you paid for your loan. Click ‘OK’ to exit out of the confirmation box.
Step 21
Nice one! You have successfully minted bLuna and then used your bLuna as collateral to take out a loan on Anchor! You can see all the details on the borrow page. You can also see your ‘borrow limit’ — this is related to your LTV. The borrow limit in this example is at 40% because we chose a low LTV (~20%). The system is telling us that we can borrow more if we would like to, however we recommend not going anywhere near your borrow limit.
Step 22
Navigate to earn and click the ‘earn’ tab. It’s time to start earning a yield on the $UST you have borrowed!
Step 23
In the ‘earn’ tab, click the ‘deposit’ button.
Step 24
Enter in the amount of $UST you would like to earn a yield on. This is like a savings account. If you only have $UST that you have borrowed from Anchor using bLuna as collateral, you can enter in the amount you borrowed. In this example, we borrowed ~$37 UST, so we will deposit our borrowed amount into the protocol to earn a yield. Click the ‘proceed’ button to deposit your $UST.
Step 25
Enter in password to sign the transaction to officially deposit your $UST into Anchor — like in Step 6.
Step 26
Congratulations! You have successfully minted $bLuna using $LUNA (choosing Chorus One as a validator of course), used your $bLuna as collateral to borrow $UST (earning yourself $ANC, Anchor protocol’s governance token) and then deposited your borrowed $UST into a money market protocol and received $aUST (a token that is a claim on your underlying $UST), which earns you a stable yield above >20% on your $UST — not bad compared to a traditional savings account! Click the ‘OK’ button to proceed.
Step 27
You will be taken back to the ‘earn’ tab, which also shows you the APY currently (it is variable and can fluctuate day-to-day — but it should always remain close to the target rate of 20%). Another cool feature on the ‘earn’ page is the amount of interest you can expect to earn in 1-year with your $UST deposit. In this example, you can see our deposit of ~$37 and we will earn ~$8 on our deposit over the course of a year. You can always visit https://app.anchorprotocol.com/earn and look at the total deposit tab. Your total amount should increase every block — you receive a yield on your savings every ~6 seconds (block time).
Step 1
If you would like to repay the loan, withdraw your deposit from Anchor’s savings protocol. You will receive $UST back in return for return $aUST.
Step 2
Put in the amount you would like to withdraw, then click the ‘proceed’ button.
Step 3
Sign the transaction on Terra station, as in Step 6 of the borrowing tutorial.
Step 4
Wait for transaction to process
Step 5
Withdraw complete! You have received the $UST back that you initially loaned using bLuna as collateral. You will have returned your aTokens back to Anchor protocol (your original claim to your underlying $UST tokens). Click OK to return back to the webpage.
Step 6
Navigate to the ‘borrow’ tab and click the ‘borrow’ button.
Step 7
Click the ‘repay’ button.
Step 8
Use the toggle to bring your LTV to 0%. This means that you have no loan with your value (collateral) — because you are repaying your debt! Click proceed when you have dragged your LTV to 0 and you have officially repaid your loan and you have returned all $UST that you borrowed.
Step 9
Sign your transaction in your Terra station wallet.
Step 10
Wait for your receipt (should take ~6 seconds).
Step 11
Transaction complete! You have repaid your debt and have no outstanding loan! Click OK to finish.
This is the end of the tutorial! If you would like, you are also able to withdraw your bLuna as collateral from Anchor in the ‘borrow’ tab, where the ‘Collateral List’ is.
Congratulations! You have successfully used your $LUNA to mint $bLuna (an instantly transferable and usable liquid staking derivative of $LUNA), used that $bLuna to take out a $UST (TerraUSD) loan in Anchor, received $ANC governance tokens as reward for supplying collateral to the protocol for the loan (>100% $ANC APR )and deposited your minted $UST into the savings protocol to earn a 20% $UST APR on your $UST deposit.
Yield farming ain’t much, but it’s honest work.
Our content is intended to be used and must be used for educational purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. The information is general in nature and has not taken into account your personal financial position or objectives. Before making any commitment of financial nature you should seek advice from a qualified and registered financial or investment adviser. Chorus One does not recommend that any cryptocurrency should be bought, sold, or held by you. Any reference to an opportunities past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit. Always remember to do your own research.
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We are looking forward to sharing further opportunities going forward!
Chorus One is offering staking services and building protocols and tools to advance the Proof-of-Stake ecosystem.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
Telegram: https://t.me/chorusone
Newsletter: https://substack.chorusone.com
When an individual or team come(s) up with an innovative idea, often the first source of funding they turn to is in the form of a grant. Grants in the blockchain ecosystem are usually milestone-driven and issued by either foundations or patron organisations. Recently though, there has been a new approach to promote ecosystem development. Free TON, a blockchain with roots stemming from the Telegram Open Network community and a live instantiation of the Telegram Open Network protocol, has focused on endorsing ‘permissionless innovation’ within its ecosystem. Free TON has been using decentralised contests as opposed to issuing grants to reward those that are making contributions to its network. Whilst it is still early days, this innovative rewarding mechanism used by Free TON could be a secret ingredient that other blockchains could adopt, to assist them to foster faster innovation and community growth within their own ecosystem.
When it comes to fundraising, grants are often a good place to start. Grants are distributed to individuals or teams with no expectation of return from grantors (e.g. there is no surrendering of equity or requirement to pay back the principle and/or interest in the future). There is usually immense competition to receive grant money as there are limited amounts of funds available to be distributed by grantors and receiving funds without needing to make a return on the original investment is a highly lucrative prospect for grantees.
In blockchain, grants are generally issued on a milestone basis to ensure the grantor’s funds are being used appropriately. If an individual or team shares the same vision as a foundation or patron organisation, they can request funds from them to bootstrap their project. Once both grantor and grantee are aligned, a grant ensues and the grantee begins work on reaching deliverables specified in their grant application.
There are two typical types of grants a team can apply for in the cryptocurrency ecosystem: foundation grants and ecosystem grants.
Foundation grants in the blockchain industry are given by non-profit organisations dedicated to supporting growth within their own ecosystem. A longstanding foundation is the Ethereum Foundation, an organisation committed to fostering Ethereum’s research, development and community. In February, the Ethereum Foundation announced an allocation of more than $1M across 25 grants to make the Ethereum staking experience easier, safer, and more secure.
Ecosystem grants are grants from patron organisations [1], meant for supporting blockchain development. Ecosystem grants come from organisations that have an interest in developing an ecosystem for the benefit of their organisation, rather than the benefit of the blockchain itself. For example, Huobi is a patron organisation that has recently announced a $10m fund for Polkadot ecosystem grants. Patron organisations are prepared to disperse grants to ecosystems (such as Polkadot in this example) because the development of the ecosystem brings their organisation more business.
Non-repayable funds have traditionally been dispersed by foundations and patron organisations in the form of grants to encourage development of software that helps grow an ecosystem, often specifically focused on applications and tools that might be hard to monetise in a different way.
Recently an argument has been made by Lane Rettig on grants:
Grants do not make the most of one of blockchain’s core properties, permissionless innovation as grants are given first to people we already know and trust, then to people who are like us.
In turn, this leads to conflicts of interest from grantors and there is a lack of transparency over how biases affect decision processes to issue grants. For this reason, Free TON has introduced a novel way to disperse non-repayable funds in order to develop their blockchain in a more decentralised manner, using contests to reward contributions rather than grants.
Free TON is a blockchain derived from the original Telegram Open Network protocol. Telegram Open Network itself was halted by the SEC for being considered a security in 2020. However, the underlying code of TON was already open-sourced and therefore some individuals in the TON community that were excited about the original TON project, decided to use and continue developing the code from TON repositories to deploy the blockchain in a completely decentralised manner, without any corporate entity backing it. In fact, just 5 days prior to Telegram officially announcing that it was completely removing itself from any association with the blockchain it had created on May 12 2020, a collective banded together to announce they would continue advancing the technology that had been created by developers working on TON, completely separate to Telegram under a new name, Free TON. Free TON has unique features, such as the “self-healing” vertical blockchain mechanism and Instant Hypercube Routing, which enable it to be fast, reliable, scalable and self-consistent at the same time. What separates Free TON from other projects re-using Telegram Open Network’s code is the large community they have managed to build around the project. To date, there have been 3,000 entities join contests to earn TON Crystals (the token for Free TON blockchain) and there are 10,000 members in the Free TON community globally.
As it stands, Free TON contests are the only way to receive TON Crystals, meaning TON is only distributed amongst those who have contributed to the network. There are 5 billion Free TON Crystals; 85% of these will be distributed to those who contribute to the project (partners and users), 10% will be distributed to developers and 5% will be distributed to validators. To date, there has been 528,444,782 Ton Crystals distributed to 115,874 unique addresses out of a total supply of 5,022,346,449 TON Crystals (i.e. 10.5% of tokens have been distributed to contributors so far). Founders of Free TON wanted to distribute TON Crystals in a meritocratic way by rewarding users with TON Crystals who are actively involved in developing the project. Currently, it is very difficult to obtain TON Crystals on secondary markets. Meaning for now, the main utility of TON Crystals is to use them in governance processes (e.g. voting on contests). Free TON is committed to empowering their community to engage, contribute and make decisions via decentralised governance.
To spur innovation within Free TON blockchain, contests are created with rewards of TON Crystals for winners. Anyone in the Free TON community can propose/vote on contests, vote on solutions to contests and propose/vote on jurors to judge the solutions to contests. Contests are wide-ranging in Free TON and there are 19 different Free TON sub-governance groups, all hosting their own contests. Contests are not just for developers in Free TON, it is also possible for those with non-technical backgrounds to participate.
Using an example, Free TON has a DeFi sub-governance group. The first proposal was to select a jury, which would judge future submissions to Free TON DeFi contests. There were 7 Free TON Sub-Governance DeFi members initially in charge of selecting additional members for the jury. Any Free TON community member could apply to be a Free TON DeFi Juror by submitting a CV (if it had adequate DeFi experience, they would be selected). All selected DeFi Jurors receive rewards as incentive to monitor and vote on DeFi contest submissions. Once a DeFi Jury was established, it was possible to propose Free TON DeFi contests in the sub-governance group. In order for a Free TON DeFi contest to be initiated, it must first be discussed in the DeFi sub-governance forum and before it is officially proposed as a contest. Once it is proposed as a contest, it must receive over 50% of votes in favour from Free TON community members to initiate the contest. Once a Free TON DeFi contest has reached quorum at over 50% and been initiated, anyone with a Free TON address is then able to submit responses to the contest. Descriptions of contests are clear and include: description, motivation, requirements, terms, criteria, artefacts, rewards and voting process for each one. The most recent Free TON DeFi contest was a Stablecoin Architecture and Design contest with 137,000 TON Crystals available as a reward for submissions reaching the Top 10. The contest had 13 submissions and 12 jurors voting on each submission. Votes (and comments) from jurors on submissions are transparent and publicly available to see.
Free TON has introduced a novel way to engage community members in the longevity of the project. Contests are a fast and accessible way for participants to contribute to a blockchain. Free TON has decentralised all aspects of their contests, meaning rewards are going to those who truly deserve them. Contests remove the conflict of interest that sometimes arise from foundations or patron organisations giving grants to projects they might have a previous relationship with. Contests that are decentralised are in line with the ethos of blockchain and decentralisation. Traditionally, grants have been issued by centralised foundations or patron organisations. A centralised entity fostering development of a blockchain might not achieve the same efficiency and innovation as what Free TON can achieve with their decentralised contests. Free TON are already improving their contest process and are now discussing BFT governance as the new Free TON governance system for contests. Innovative governance and accessible contests without reward distribution bias is Free TON’s competitive advantage over other blockchains. Building an active, decentralised community around a blockchain is perhaps one of the most critical facets to get right to ensure longevity of a blockchain. Using contests to reward individuals or teams working on development of a blockchain has rarely been seen prior to Free TON. We find innovative governance that uses contests to promote innovation within a blockchain might be a trend that other blockchains could use to foster their own ecosystem development in the future. For now, Free TON’s community continues to grow, albeit slightly in the shadows, as there has been little speculation on the token due to the fact it is not widely available on secondary markets. When the token is eventually widely able to be traded on secondary markets, those that have participated in contests to contribute to developing the blockchain might be handsomely rewarded by the time the rest of the ecosystem discovers the blockchain’s capabilities and community.
Today, we are excited to announce that we will acquire and continue operating Cryptium Labs validator nodes on Tezos, Near, Polkadot, and Kusama following their announcement to terminate their services to focus on other ventures.
This first of its kind acquisition will enable Cryptium’s delegators staking over $125M worth of assets to continue earning rewards through a professional (and likewise Swiss-based) staking provider.
“Cryptium Labs has been one of the pioneers of Proof-of-Stake. They were among the first professional validators and contributors to protocol development, especially on Tezos. It’s an honor for us to continue operating their nodes and ensure a continuous high-quality service for their customers. We have no doubts that the Cryptium Labs team will go on to do great work through their new venture and make major contributions to the crypto industry.”
Brian Fabian Crain, CEO and Co-Founder of Chorus One
“Looking back it has been a wild journey and while it’s sad to leave the validation game, the team is incredibly excited to share with the world what we have been working on. We started Cryptium Labs as one of the first Proof-of-Stake validation companies in the world with the simple premise to provide secure and available validation from the Swiss Alps. Chorus One has been there with us since the beginning and has been incredibly innovative in the PoS space. I am excited that they will continue providing high-quality validation services to all the original Cryptium Labs delegators.“
Adrian Brink, Managing Director & Co-Founder of Cryptium Labs
If you have been delegating to Cryptium Labs on Near, Polkadot, Tezos, or Kusama, you do not need to take any action. You should be aware that there will be a migration from Cryptium Labs’ to Chorus One’s infrastructure within the coming weeks. We will maintain the former Cryptium Labs validators with the same care we operate our existing validator nodes and will relocate all server infrastructure and migrate cryptographic material to our platform.
As a result of the acquisition, the display name, commission rates, and other metadata related to the respective validators will be adjusted. Validators will be Chorus One branded and, on networks we are already active on, commission rates will be brought in line with our existing nodes to remain consistent. On Tezos, where we do not operate a baker as of now, we will maintain the commission rate Cryptium established.
This acquisition serves as our entry into the Tezos ecosystem. Our initial focus on Cosmos and Tendermint resulted in us never launching a Tezos baker. With the acquisition of the Cryptium Labs baker, we are finally becoming a part of this long-standing and established Proof-of-Stake network and its community. We are thrilled to expand our portfolio of networks to Tezos and are hopeful to maintain and even improve upon the secure and stable operation Cryptium set up.
While Cryptium Labs is dissolving, its former team centered around Adrian Brink, Awa Sun Yin, and Christopher Goes will work on bringing financial privacy and sovereignty to everyone. Stay tuned for future announcements!
The Chorus One team wishes them the best of luck for their future endeavours; we are thankful for their contributions to the staking ecosystem and grateful to be able to continue their legacy!
Finally, we would like to welcome all former Cryptium Labs delegators into our community. Please don’t hesitate to reach out through our channels linked below if you have any questions or want to learn more.
Chorus One is offering staking services and building protocols and tools to advance the Proof-of-Stake ecosystem.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
Telegram: https://t.me/chorusone
Newsletter: https://substack.chorusone.com
Cover background photo by Isaac Struna on Unsplash.
Originally published at https://blog.chorus.one on March 1, 2021.
Happy New Year! Today, we are excited to announce the launch of our The Graph mainnet indexer node. Find us e.g. on the official dashboard (chorusone.eth). This post will focus on our journey so far and what you can expect when considering to delegate GRT tokens.
The Graph has become the industry standard for retrieving data from Ethereum applications, with prominent users including Coingecko, Uniswap, and many others.
We have experienced ourselves what it means to write custom code to retrieve blockchain data, to store it, and to service it for our staking platform Anthem. One of the reasons that makes us excited about The Graph is the potential to make extracting valuable information from any blockchain much easier, while at the same time not relying on a centralized party to maintain availability and to ensure integrity of the data.
The Graph is a core piece to enable truly trustless applications. By providing our infrastructure and expertise to the community, we hope to accelerate the growth of this ecosystem!
The Graph is one of the most complex decentralized protocols with various, highly interconnected elements. The intricate economic design that features multiple roles (check out a primer here) is designed to optimally provide indexing and querying capabilities through a decentralized network of participants.
As a GRT holder, one option to participate in the system is by delegating to indexer nodes that are storing and servicing data. By delegating, GRT holders essentially increase the power of their chosen indexer operator in the protocol. Indexers need to allocate stake to subgraphs and are required to service queries from data consumers, the volume of which is determined by their relative stake allocated to a specific subgraph. To compensate delegators for putting up their capital to back indexing nodes, they receive a portion of the query and inflation rewards earned by the indexer. Indexers can determine their reward cut (the commission taken on newly minted GRT from the protocol) and their query cut (the commission taken on fees from queries served).
The rest of this post will focus on the inflation and reward cut dynamics, since these are expected to have the majority impact on the staking rewards received, especially in this early bootstrapping phase of the network.
If you are seeking to find out how much you will earn at the start, when queries fees are still low, these are the things you need to consider:
There’s also a one-time 0.5% fee when delegating GRT that is burned lowering the circulating GRT supply. At the time of writing there is around 9% of the GRT supply staking meaning the APR for staking GRT is 30% (before commission). Since our indexer does not have many delegations yet, our effective commission rate is actually negative meaning you’ll earn an even higher APR until delegations fill up!
Fellow indexers and community members have already written delegation guides and built dashboards that are helpful if you want to put your GRT to work, here is a selection:
Official The Graph Dashboard: https://network.thegraph.com/
Staking Facilities Guide for Ledger + Metamask: https://stakingfac.medium.com/the-graph-staking-guide-5ec1455f4783
Graphlets Dashboard: https://graphlets.io/
The Graph Portal: https://thegraphportal.com/
Cover background image by Arash Ashgari on Unsplash.
Originally published at https://blog.chorus.one on January 1, 2021.
It’s been over 2 months since the decentralization of the SKALE Network ( mainnet phase 2) began. With an unique approach of requiring participating investors to stake a minimum of 50% of their tokens for a period of at least 2 months ( Proof-of-Use), the SKALE team focused on attracting long-term supporters of the project, as opposed to speculators looking for a quick flip.
In this post, I want to take a look at a snapshot of the on-chain data that shines light on how SKL holders are engaging with the network now that the Proof-of-Use period has come to an end.
SKL is an ERC-777 token (backwards compatible with ERC-20), so information about it is available on Etherscan. We can see that there are 4,083,530,877 SKL tokens, which are held by 3,903 different addresses. 166,857,860, or roughly 4%, of those were sold in a public sale through the Activate platform. For a detailed breakdown of the supply and associated lockups, check out this 1-pager.
I want to start this analysis by taking a look at token transfers. Visualizing the transaction counts and amounts, we can clearly see how the initial tokens were distributed to investors leading up to the phase 2 mainnet launch on October 1. We can also note an uptick in activity when the first SKALE staking period ended Dec 1 (as of now, tokens can only be staked for periods of 2 months). At this point, the first tokens unlocked and the SKL token gets listed, e.g. on Binance. On Dec 1, 6,358 transfers were carried out moving 267m SKL, or around 6.5% of the supply (see chart). Right after, activity declined significantly with on average around 500 transfers happening per day during the past week.
Looking at the total stake in the network, which e.g. can be found here, we see that the overwhelming majority of tokens are involved in staking. 74.5% of all tokens are delegated, which places SKALE in the company of established networks such as Cosmos (71.42%) and Tezos (79.44%, see Staking Rewards). In terms of addresses that are involved in staking, we see that there are 1,167 unique delegators. 30% of all addresses that hold the SKL token are also staking.
Furthermore, one may wonder how many SKL tokens have been unstaked or are planning to unstake at the next boundary (Feb 1). The official dashboard shows 112m SKL (~3.7% of the currently staked supply) have been unbonded after the first staking period. So it seems like a majority of token holders plan to continue staking (it should be noted that a majority of token holders like the foundation, team, and early investors have longer lockup periods and cannot transfer their tokens yet).
Generally speaking, the interest in staking seems to remain high. While this amount will likely increase as the month continues, we can currently see that 15m SKL tokens plan to unstake at the next boundary (Feb 1). This is three times as much as new delegations that are coming in (i.e. accepted and proposed), which amount to around 5m SKL tokens at the time of writing. If we assume constant growth and that this ratio will remain until the end of January, then the staked supply would decline by roughly 80m, which would barely impact the staking ratio.
There are currently 47 validator organizations running a grand total of 152 nodes, whose resources are distributed across elastic SKALE-Chains. The average reward per node, which is split between the node operating entity and its delegators, is 211,075 SKL per node. With 152 nodes, this means the SKALE Network is currently paying out 32,083,400 SKL (or 1.04% of the supply) per epoch.
Using the median commission rate across validators of 12%, this means the average SKL delegator is currently earning 0.9152% per month on his SKL, translating to an APR of 11.55% (including compounding).
Looking at the stake distribution among nodes, we can see that a majority of the stake is controlled by a small subset of validators with only 3 of the 47 entities controlling right about 33% of the stake (see chart).
SKALE’s design seems to have successfully incentivized an engaged base of holders that are interested in supporting the project through staking. Nevertheless, it should be noted that the project is still in a very early phase of decentralization, which can be seen both by looking at the token distribution among addresses (the top 100 addresses hold a majority of all tokens), as well as in the stake distribution across validators. For more on the importance of censorship resistance in Proof-of-Stake, check out e.g. this thread by the Solana team.
Chorus One is offering staking services and building protocols and tools to advance the Proof-of-Stake ecosystem.
We are an active validator on the SKALE Network. Support our work by delegating to us. Learn more here.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
SKALE is an elastic blockchain network that gives developers the ability to easily provision highly configurable fully decentralized chains that are instantly compatible with Ethereum. SKALE chains can execute sub-second block times, run up to 2,000 tps per chain, and run full-state smart contracts in addition to decentralized storage, execute Rollups, and machine learning in EVM.
Website: https://skale.network/
Twitter: https://twitter.com/skalenetwork
Originally published at https://blog.chorus.one on December 10, 2020.
On November 18, 2020 the Oasis mainnet transitioned to a fully permissionless platform with ROSE tokens becoming transferable on the network. This constitutes a major milestone for the Oasis ecosystem and we are proud to be part of the initial 75 validators that made this possible!
Oasis and its privacy-preserving technologies allow developers to build entirely new types of applications in which users remain in control of their data enabling a better Internet and a responsible data economy.
Coinciding with the official mainnet launch, we are excited to announce that we have finished our Ledger integration of Oasis in Anthem enabling ROSE holders to transfer and delegate their tokens to earn staking rewards to initially earn up to 20% APY (more on the economics here).
Connect your Ledger device or try out Anthem’s portfolio feature with any Oasis address at: https://anthem.chorus.one
At Chorus One, our goal is to improve non-custodial participation in the staking economy to strengthen decentralized networks and help them deliver on the promise of an open and transparent financial and user-owned Web3 ecosystem. Anthem is a tool geared towards helping users participate in these emerging networks.
To support our work, delegate ROSE tokens to our node and safely earn rewards. Learn more here: https://chorus.one/networks/oasis/
PS: A recent Chrome update is resulting in the Ledger integration not working on Chrome and Brave for some users. To fix it, you will need to go to chrome://flags#new-usb-backend and disable that flag.
Chorus One is offering staking services and building protocols and tools to advance the Proof-of-Stake ecosystem.
Chorus One is a grantee of the Oasis Foundation and a genesis mainnet node operator on the Oasis network. Learn more about us in our Node Operator Spotlight.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
A better internet is only a matter of time. The Oasis network is trying to fix what’s broken by giving users back control of their data using a combination of secure compute and a proof-of-stake blockchain.
Website: https://oasisprotocol.org/
Twitter: https://twitter.com/oasisprotocol
Originally published at https://blog.chorus.one on November 26, 2020.
Today, we are excited to announce our partnership with German-based, regulated custody provider Finoa. Our integration with Finoa will enable retail and institutional customers that use Finoa’s custody solution to utilize Chorus One’s staking services starting with support for Polkadot. Other networks that are part of the portfolio of both companies such as Oasis, NEAR, Centrifuge, and others will follow shortly after.
This partnership signifies a larger movement towards adoption of cryptoassets by institutional players. We are excited to help enable access to the vibrant ecosystem of yield-bearing staking assets to newcomers and established crypto investors alike.
We are constantly increasing the product and service offering to our customers. With Chorus One, we add a leading and innovative Staking provider with a wide array of protocols to our portfolio. Especially for the Polkadot ecosystem, Brian and his team provide innovative, yield-optimizing Staking solutions.
Henrik Gebbing, Co-Founder and Co-CEO of Finoa
Our partnership with Finoa goes beyond purely providing infrastructure to participate in decentralized networks. In the past few weeks, we have developed capabilities to improve the user experience and returns for staking users on Polkadot through a first version of what we refer to as a “staking agent”. The staking agent is an API that algorithmically manages staking participation on behalf of DOT holders . It makes use of a proprietary algorithm and Polkadot’s key management design that allows the delegation of staking-related rights without giving up custody of funds.
The staking agent enables Finoa users that want to stake DOTs to improve their staking reward APR by continuously updating their nominations across supported validators while requiring no intervention by the user.
We have been impressed with the professionalism and vision of Finoa, who is quickly becoming one of the industry’s leading custody providers. We are also excited to make a first foray into the area of staking yield optimization and to be able to offer this to Finoa’s customers.
Brian Crain, Co-Founder and CEO of Chorus One
We will soon have more information about our staking agent and its benefits available. For now, if you are a DOT holder, wallet provider, or custodian interested in using or integrating the staking agent, please reach out to us at hello[at]chorus.one.
Finoa is a regulated custodian for Digital Assets, servicing professional investors with Custody and Staking. Reference customers include the world’s most renowned Venture Capital firms, large corporations and financial institutions. Finoa was founded in Berlin in 2018, is a qualified crypto-asset custodian (§64y Para. 1 KWG) and supervised by the German Federal Financial Supervisory Authority (BaFin).
Website: https://finoa.io
LinkedIn: https://www.linkedin.com/company/finoabanking/
Twitter: https://twitter.com/Finoa_Banking
Chorus One is providing staking services and developing cross-chain communication technologies for Proof-of-Stake blockchain networks.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
Telegram: https://t.me/chorusone
Background picture by Ben Neale on Unsplash.
Originally published at https://blog.chorus.one on October 7, 2020.
We are excited to announce support for the Oasis mainnet release candidate Amber on Anthem! Starting today, token holders on the Amber network can track their account and transaction history by pasting in their address.
Try it out on https://anthem.chorus.one
Anthem is an essential tool for staking users on blockchain networks. Our goal is to improve non-custodial participation in the staking economy by giving users access to historical data about their investments, as well as allowing them to stake tokens and vote in governance on supported networks.
On Oasis, Anthem allows you to connect any address and access historical portfolio and transaction data with a focus on staking rewards. Token holders can display their balances in different fiat currencies (for Oasis this feature is not available yet). In addition, users can export account data as a CSV file and transaction data as a JSON file, enabling them to easily get the correct data for tax compliance or analytics purposes.
Try out Anthem for Oasis today and feel free to ask us questions on Telegram or through the live chat feature!
After Anthem has been live for a couple of months for the Cosmos Hub, adding Oasis marks the first step towards the multi-network experience we are aiming towards. We expect to soon add Celo and Terra, as well as expand features to improve participation for token holders in Proof-of-Stake networks such as Oasis in the near future.
Chorus One is providing staking services and developing cross-chain communication technologies for Proof-of-Stake blockchain networks.
Chorus One is a grantee of the Oasis Foundation and a genesis mainnet node operator on the Oasis network. Learn more about us in our Node Operator Spotlight.
Website: https://chorus.one
Twitter: https://twitter.com/chorusone
A better internet is only a matter of time. The Oasis network is trying to fix what’s broken by giving users back control of their data using a combination of secure compute and a proof-of-stake blockchain.
Website: https://oasisprotocol.org/
Twitter: https://twitter.com/oasisprotocol
Originally published at https://blog.chorus.one on June 30, 2020.
