Renowned decentralized finance (DeFi) company Ankr sat down with Crypto Daily to give us a breakdown of its revolutionary Liquid Staking feature and to discuss retaking on the EigenLayer.
Crypto Daily is fortunate to have interviewed Tiago Pratas, DeFi lead at Ankr. Pratas has given us access to the nuances of Ankr's groundbreaking Liquid Staking protocol and to discuss EigenLayer's Ethereum restaking and safety features.
Give us a quick breakdown of Ankr as a DeFi infrastructure.
“Ankr is a prominent DeFi infrastructure company dedicated to making the decentralized world more accessible and user-friendly. We achieve this by providing a comprehensive Web3 infrastructure platform that caters to developers, enterprises, and end-users. Ankr's suite of services includes node hosting, staking, and developer-focused offerings such as RPC nodes and app chains. Our services are designed to be cost-effective, scalable, and secure, making it easier for developers to build decentralized applications (DApps) and for end-users to access and interact with the DeFi ecosystem. You probably already used some of our services without even knowing, and we partner with major DeFi projects like Aave, 1inch, SushiSwap, and several major L1's.”
Staking is excellent for investors to earn rewards on their assets, but Liquid Staking offers the user many more benefits. In summary, please explain what Liquid Staking is, why it is so revolutionary, and the benefits of liquid staking over traditional staking.
“Liquid Staking is a groundbreaking concept in the blockchain and DeFi space. Traditional staking involves locking up your assets in a smart contract to secure a network and earn staking rewards. However, this process renders your assets illiquid, meaning you can't readily use or trade them.
Liquid Staking, on the other hand, provides a more flexible approach. When you stake your assets, you receive a token representing your staked assets, such as ankrETH. These tokens are tradable and can be used in various DeFi protocols, from providing liquidity to collateral for loans. The revolutionary aspect of Liquid Staking is that it combines the benefits of staking, such as earning the staking rewards while participating and boosting Ethereum network security, with the advantages being more capital efficient, more flexible for stakers, and easier to participate in the validation process of Ethereum and get access to the "risk-free rate" in the form of staking rewards.”
How can users go about Liquid Staking through Ankr?
“Liquid Staking through Ankr is a straightforward process. Users can visit Ankr's Liquid Staking Platform, select the assets they want to stake, connect their cryptocurrency wallet, and select the amount and stake! In return, users will receive Liquid Staking Tokens such as ankrETH,ankrBNB, etc., which represent their staked assets. These tokens can be used across DeFi platforms, providing liquidity and earning additional yields. The list of these DeFi opportunities can be found on our DeFi Dashboard.”
Users are rewarded in ankrETH. What does ankrETH represent, and how is its value determined?
“ankrETH represents the Ethereum deposited on the Validators with all the staking rewards that it has accrued. Therefore, ankrETH is a reward-bearing token, meaning that the fair value of 1 ankrETH token vs. ETH increases over time as staking rewards accumulate. Therefore, its market price is always tied to the amount of Ethereum you can redeem each ankrETH and the Ethereum price.”
What benefits does holding ankrETH offer the user?
“Firstly, High APRs, as AnkrETH boasts one of the best APRs in the market, thanks to the efficiency of our node operation and the distribution of MEV rewards. In addition to this, additional liquidity and capital efficiency of your assets as Unlike traditional staking, ankrETH maintains liquidity, allowing users to access their assets whenever needed while allowing you to participate in various DeFi protocols while still benefiting from staking rewards. This is also meaningful as users still get exposure to Ethereum's Growth. As the price of Ethereum rises, so does the intrinsic value of ankrETH, offering users the potential for significant capital appreciation. Last but not least, knowing that they are contributing to network Security of Ethereum since by staking with Ankr, users actively contribute to the security and decentralization of the Ethereum network, further enhancing its robustness and reliability.”
We know that EigenLayer is a middleware protocol that allows for restaking. Explain to us what EigenLayer's Ethereum restaking platform is designed to do and what benefits it offers the user.
“EigenLayer enables users to restake their ETH and extend cryptoeconomic security of Ethereum to additional applications on the network. EigenLayer's Ethereum restaking platform is designed to automate the process of restaking staking rewards for users, providing several significant benefits. It simplifies the compounding of staking rewards by automatically reinvesting them, resulting in exponential growth of staked assets over time. This automation makes the process hassle-free and accessible, even for those new to DeFi. Users benefit from maximized returns due to the compounding effect, potentially achieving higher returns compared to traditional staking or holding strategies. This can lead to multiple innovations built on top of EigenLayer. From Infracture products like oracles, bridges, or L2's to more yield-focused products like Liquid Staking tokens with higher yields.”
How will Ankr utilize EigenLayer's restaking platform?
“We love innovation and pay close attention to all the new things are happening in the market, especially when it comes to Liquid Staking! So far Ankr has proposed the EigenLayer DAO to list ankrEtH, but we also are playing close attention to the liquid staking protocols that are being built on top.”
Ankr recently announced three new services to increase the security of its liquid staking service and provide more functionality and transparency for its users. Of particular interest is the ETH validator hub. Tell us more about this feature and how it will address slashing as one of the most significant risks associated with liquid staking.
“ETH Validator hub will become an open marketplace that will act as a transparent way for users to choose which nodes they want to delegate their assets to. Our focus will be on Ethereum but will expand to other networks soon. This marketplace will offer enhanced versatility and empowerment to users concerning their assets, enabling them to select nodes that align with their individual risk evaluations and APY objectives. In essence, this service delivers a delegate staking encounter for Ethereum stakers. Ankr places a strong emphasis on security and transparency, and the ETH validator hub is a key part of our efforts to address slashing risks associated with liquid staking while allowing for the introduction of restaking. This hub employs a rigorous validator selection process, considering factors like reputation and security measures. Slashing protection mechanisms are in place to minimize the risk of loss due to slashing events. The ETH validator hub operates with responsive governance, allowing the community to participate in decision-making bolstering accountability and trust.”
What are Ankr's plans for the future? Can we expect exciting and innovative strategies to improve the DeFi sector soon?
“Ankr's vision for the future revolves around continuous innovation and user-centric strategies to advance the web3 sector. We are committed to developing innovative DeFi products and services, including expanding our liquid staking offerings while providing core infrastructure to the web3 ecosystem. Our goal is to empower users by providing cutting-edge solutions that enhance their crypto experience. We'll continue to explore new avenues, partnerships, and technologies to contribute positively to the ecosystem. Expect exciting developments as we work tirelessly to improve and innovate!”
Tiago Pratas is a seasoned cryptocurrency professional with expertise in blockchain and DeFi. As the DeFi Lead at Ankr, he's played a key role in increasing TVL from $65 million to over $180 million. With a strong crypto trading and research background, Tiago is an expert in blockchain technology, DeFi strategies, and the broader crypto ecosystem.
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.
