A common critique of Web 3 is that the sector finds solutions for problems that don’t exist. We can agree with that comment in some cases, given the exuberance of the sector. However, the emergence of decentralized solutions creates additional needs that couldn’t be accounted for before. Tenderize is targeting one of those needs.
Discover what problem Tenderize is really solving, how we identified it, and the approach we’re taking to boost tokenized stake for Web 3 players.
What flexibility do holders have when staking their tokens?
Traditional staking in crypto is fundamental for networks to be secure and functioning at high performance, while stakers get rewarded for their allocation of tokens. Sounds good, but there are quite a few limitations to the traditional model.
With regular staking, investors have to lock their funds for a determined period (depending on protocol, this could be anywhere from 0-30+ days), earning rewards but not having the flexibility to use their tokens across other investment opportunities.
With traditional locking periods, investors have an opportunity cost of not diversifying their investments while being subject to changing market conditions that can lead to reduced returns or even losses when there’s high selling pressure with the staked token.
Current staking is complex and not optimized for mainstream investors
Beyond the lack of flexibility, current mechanisms for staking are too complex for the ordinary investor.
One of the major setbacks of the current Web 3 product suite is the focus at technical-savvy users while ignoring the larger portion of the less technically inclined who could also benefit from diversifying their investments in crypto-based vehicles like staking.
One example of the current challenges is certain staking products requiring users to adjust parameters during the investment period, like claiming/re-staking funds to ensure that they get compounded rewards for optimal returns.
With Web 3 staking, to get the best return possible, delegators also need to identify the best performing nodes in the network, allocate funds to those nodes, and constantly re-evaluate if their allocation is still the best to optimize their investment.
This process is not straightforward or sustainable for crypto and Web 3 to reach mainstream adoption.
The current scenario: Superficial yields without long-term sustainability
Let’s imagine that the current product suite in crypto and DeFi would solve these flexibility and usability challenges with staking. Would it solve all the issues?
The answer is no.
With the rise of Decentralized Finance (DeFi), protocols have been relying on artificial token emissions to attract users from competitors, increasing the offered yields in the short term in an unsustainable way.
Usually, the token emissions are so high and disconnected from the adoption of the protocols that it leads to negative price action on the token. This approach results in heavy losses for stakers and other holders, even if they profit during a short period due to being early adopters.
There is a need for a solution that brings simplicity, flexibility, and long-term sustainability for rewards in a crypto environment.
We have the solution to this problem. You won’t have to “lose your instant liquidity freedom when staking,” as our COO would say.
Tenderize emerged to bring a simple solution for Web 3 token holders
Web 3 infrastructure is key for the development of decentralized technologies and the adoption of such solutions. The connection between protocol layers and application relies on the infrastructure to boost the development cycle of these new technologies.
Tenderize is tapping into Web 3 infrastructure players since these protocols generate true rewards based on their adoption and growth, unlike other speculative investments in the crypto world.
Tenderize enables Web 3 token holders (GRT, LPT, MATIC, and AUDIO) to find an easy-to-use, flexible, and long-term oriented solution to staking, opening a new era for staked assets and their utility potential.
With Tenderize, investors can stake their tokens and have full flexibility over them to use in other investment vehicles while earning automatically compounded rewards in the form of more tokenized staked assets.
From there, a new world of use cases opens up for holders of staked tokens in secondary markets, including leveraging staked assets by borrowing against collateral while earning rewards.
Ready to get started with improved capital efficiency, liquidity freedom, and tokenized stake? Tenderize now with https://app.tenderize.me/