TheDinarian
News • Business • Investing & Finance
šŸ’„stkATOM Exchange Rate MechanicsšŸ’„
November 11, 2022
post photo preview

Learn more about the underlying mechanics that drive the stkATOM exchange rate model with ATOM when liquid staking on pSTAKE.

Our upcoming non-custodial ATOM liquid staking solution on the Persistence Core-1 Chain will bring stkATOM directly into the Cosmos ecosystem. Through Interchain Accounts (ICA), pSTAKE will allow users to stake their ATOM and mint stkATOM based on the exchange rate (which follows Compound Finance’sĀ cToken model).

When liquid staking your ATOM on pSTAKE, an exchange rate model drives the relationship between ATOM and stkATOM – the value of stkATOM will increase against ATOM as it accrues staking rewards in the background. pSTAKE automatically compounds ATOM staking rewards after every epoch, resulting in higher yields.

Today, we’ll dive deeper into how this exchange rate model works by answering FAQs and an in-depth case study of on-chain actions, including how they affect the stkATOM/ATOM exchange rate.

FAQs about stkATOM/ATOM Exchange Rate

Below is a list of key questions surrounding the stkATOM exchange rate and its underlying mechanics.

What is the stkATOM exchange rate?

stkATOM’s exchange rate is the rate that defines how much stkATOM is minted when a user stakes ATOM or how much ATOM is claimable when a user unstakes or instantly redeems their stkATOM. It establishes a direct conversion relation between ATOM and stkATOM and is identical to Compound Finance’s cToken model.

How is the exchange rate calculated?

The calculation of the exchange rate between stkATOM to ATOM is a sum and division. The sum of tokens received in deposits for that day’s epoch and the ICA Host chain delegation account balance (all staked ATOM, including auto-compounded staking rewards) divided by the total supply of stkATOM.

What will the stkATOM exchange rate be at launch?

Initially, at launch, the exchange rate will be 1, meaning that 1 deposited ATOM will mint 1 stkATOM.

How is the stkATOM exchange rate calculated?

Below is the exchange rate formula for stkATOM:

Below is a breakdown of the values that make up this formula:

  • ATOMava:Ā ATOM deposited but not yet staked
  • ATOMstkd:Ā ATOM staked on Cosmos (includes earned staking rewards)
  • stkATOM:Ā Total minted stkATOM in circulation

Which on-chain action changes the stkATOM exchange rate?

The stkATOM exchange rate automatically updates whenever any part of the above equation changes:

  1. Depositing ATOM and unstaking stkATOM doesn’t affect the exchange rate value because minting and burning stkATOM is based on the current exchange rate.
  2. Reward auto-compounding increases the exchange rate value because staked ATOM is added to the numerator.

Is the stkATOM exchange rate the same for everyone?

Yes. All users can mint stkATOM when they deposit ATOM or unstake stkATOM to claim ATOM, always at the same ongoing exchange rate.

How does the stkATOM exchange rate change?

The stkATOM exchange rate changes (increases) when the pSTAKE protocol auto-compounds ATOM staking rewards every epoch. stkATOM in the (n+1)’th epoch will be worth more in terms of ATOM than in the n’th epoch.

Why do I receive less stkATOM for my staked ATOM?

As established, the stkATOM exchange rate will keep increasing as staking rewards accrue. Over time, new users who stake ATOM and existing users staking new ATOM will receive fewer minted stkATOM as per the ongoing exchange rate.

Will the amount of stkATOM in my wallet change?

No. The value of stkATOM does not change in any circumstance (unless you unstake). Over time, your same amount of stkATOM will be claimable for more ATOM than you initially deposited.

Case Study

Now that you understand the components and underlying mechanics of stkATOM’s exchange rate, let’s see how this model works in practice through a detailed case study.

Note:Ā All numbers in this case study are arbitrary and only for explanation purposes. Protocol fees are considered 0% for simplicity. pSTAKE will have a 5% fee only on ATOM staking rewards generated.

At launch, the exchange rate of stkATOM to ATOM will be 1 and gradually increase as and when rewards are received every day epoch.

Alice & Bob will receive stkATOM at a 1:1 ratio to the ATOM they’ve staked, as the current exchange rate is 1.

After the first rewards day epoch, rewards received (100 ATOM in this example) are automatically claimed and restaked by pSTAKE for auto-compounding. Next, rewards are distributed to stkATOM holders (in the form of an exchange rate increase).

As the total ATOM has now changed (while the total stkATOM remains the same), the exchange rate will also change according to the formula mentioned above:

  • New exchange rate = 2,100 (Total ATOM) / 2,000 (Total stkATOM) =Ā 1.05

The claimable ATOM by Alice & Bob will increase according to the new exchange rate:

  • Alice ⇒ 1500 (stkATOM) x 1.05 (new exchange rate) =Ā 1,575 ATOM
  • Bob ⇒ 500 (stkATOM) x 1.05 (new exchange rate) =Ā 525 ATOM

When Jake stakes 1,000 new ATOM, the exchange rate for stkATOM/ATOM does not change. Jake receives stkATOM as per the ongoing exchange rate:

  • stkATOM received by Jake = 1,000 (ATOM staked by Jake) / 1.05 (current exchange rate) = 952.38095238 stkATOM

After the second rewards epoch, the exchange rate will change as follows:

  • New exchange rate = 3,255 (Total ATOM) / 2952.38095238 (Total stkATOM) = 1.1025

Consequently, the total ATOM claimable by our stakers will change as follows:

  • Alice ⇒ 1,500 (stkATOM) x 1.1025 (new exchange rate) = 1,653.75 ATOM
  • Bob ⇒ 500 (stkATOM) x 1.1025 (new exchange rate) = 551.25 ATOM
  • Jake ⇒ 952.38095238 (stkATOM) x 1.1025 (new exchange rate) = 1,049.99999999 ATOM

After Bob sends an unstaking request, his stkATOM tokens are blocked from further usage and an unstaking request is made corresponding to his balance. As per the current exchange rate of 1.1025, Bob will be able to claim 551.25 ATOM after a 21-25 day unbonding period against his originally minted 500 stkATOM.

Powering Cosmos DeFi

stkATOM’s exchange rate model enables easy integration with other DeFi protocols and provides a much simpler user experience, given that users don’t need to manually claim their rewards or worry about auto-compounding them for extra yield.Ā 

Because it follows this exchange rate model, stkATOM is a yield-generating asset that will supercharge its composability in Cosmos DeFi, along with numerous other use cases.

About pSTAKE

pSTAKEĀ is a liquid staking protocol that unlocks liquidity for your staked assets. With pSTAKE, you can securely stake your Proof-of-Stake (PoS) assets, participate in protocol improvements and security to earn staking rewards, and receive staked underlying representative tokens (stkASSETs) which can be used to explore additional yield opportunities across DeFi.

At present, pSTAKE supports Binance Chain (BNB), Cosmos (ATOM), Persistence (XPRT), and Ethereum (ETH) networks’ native tokens, with a view to support more chains and assets in the future (SOL, and AVAX).WebsiteĀ |Ā TwitterĀ |Ā TelegramĀ |Ā BlogĀ |Ā YouTubeĀ |Ā Forum

community logo
Join the TheDinarian Community
To read more articles like this, sign up and join my community today
0
What else you may like…
Videos
Podcasts
Posts
Articles
Trump just posted this about chemtrails šŸ‘€

ā€œThe enthusiasm for experiments that would pump pollutants into the high atmosphere has set off alarm bells here at the TRUMP EPA.ā€

00:02:52
The future of crypto = access, trust, transparency.

@evernorthxrp gives institutional + public investors simple, regulated, liquid exposure to XRP – and we’re compounding that value.

Watch below to learn how. šŸŽ„šŸ‘‡

OP: @Ashgoblue

00:01:32
Coinbase CEO Brian Armstrong on CNBC: Crypto Market Structure Bill is CLOSE to passing šŸ‘€
00:00:39
šŸ‘‰ Coinbase just launched an AI agent for Crypto Trading

Custom AI assistants that print money in your sleep? šŸ”œ

The future of Crypto x AI is about to go crazy.

šŸ‘‰ Here’s what you need to know:

šŸ’  'Based Agent' enables creation of custom AI agents
šŸ’  Users set up personalized agents in < 3 minutes
šŸ’  Equipped w/ crypto wallet and on-chain functions
šŸ’  Capable of completing trades, swaps, and staking
šŸ’  Integrates with Coinbase’s SDK, OpenAI, & Replit

šŸ‘‰ What this means for the future of Crypto:

1. Open Access: Democratized access to advanced trading
2. Automated Txns: Complex trades + streamlined on-chain activity
3. AI Dominance: Est ~80% of crypto šŸ‘‰txns done by AI agents by 2025

🚨 I personally wouldn't bet against Brian Armstrong and Jesse Pollak.

šŸ‘‰ Coinbase just launched an AI agent for Crypto Trading
Pyth šŸ¤ Hyperliquid

The HIP-3 Ecosystem Map:

Full report and projection of year one HIP-3 volumes dropping tomorrow on @MessariCrypto

post photo preview

🚨JUST IN: POLYMARKET TO LAUNCH A TOKEN!

CMO Matthew Modabber confirms a native $POLY token and airdrop. Polymarket is eyeing a new funding round valuing it up to $15B.

⚔ BREAKING: GOOGLE’S WILLOW QUANTUM PROCESSOR COMPLETES 3.2 YEARS OF COMPUTATION IN JUST 2 HOURS, 13,000Ɨ FASTER THAN THE WORLD’S MOST POWERFUL SUPERCOMPUTER, SPARKING FRESH CONCERNS OVER BITCOIN’S ENCRYPTION SECURITY.

post photo preview
post photo preview
New Human Force
Join this Now! YOU have what it takes!

They are in our solar system, and in our event-stream in this Eternal Now.

Officialdom is clueless.

They think we are going to be at WAR with the Aliens.

Officialdom is very stupid.

Aliens is here. It’s not WAR. It’s Contention.

There is a difference.

Officialdom is clueless, still living in the last Millennium.

Aliens is here.

The Field in which we contend is This Eternal Now.

ALL HUMANS LIVE HERE, and ONLY HERE, in this

ETERNAL NOW.

It’s a Field of potentials, of pending Manifestation, this continuous event-stream of karma in which we have always lived our body’s Life.

This Eternal Now has always been our body’s Field of Contention.

The Aliens is here, in our Eternal Now.

Our common, shared, reality that we all continuously co-create now has Aliens.

It’s getting very complex in here.

Officialdom is clueless. They see the Aliens. They are freaking out. They think you are children, when it is their small minds, trapped in a reality that is only grit, mud, and ā€˜random chance’ who are childish.

Officialdom is stupid. They will and are reacting badly. As is their way, they are trying to hide shit from you. Silly grit bound minds don’t realize you can see everything from within the Eternal Now. They have yet to grasp that what they perceive as this Matterium, filled with ā€˜matter’, is but a hardening of our previous (past) internal states of being.

WAR happens in the Matterium.

Contention occurs within this Eternal Now where Consciousness shapes the manifesting event-stream.

YOU know this to be fact. You are a co-creator.

Contention with Aliens is happening in this instant in this Eternal Now.

Officialdom ain’t doing shit. They are still stuck in trying to move matter around to affect unfolding circumstances. That’s redoing the mirror trying to affect the reflection. Dumb fucks….

It’s up to US. To the New Humans. Those of us who live in this Eternal Now. Those of us who see that our body’s Lives (the Chain that cannot be broken) are expressions of the Ontology revealing itself to itself. It’s up to us guys.

We are not an Army. That’s a concept from the past, from before the emergence of the New Humans. We are a Force. A self-organizing collective with leadership resident in each, and every participant.

We are the New Human Force. By the time officialdom starts to speak about the Aliens in near-factual terms, we will already be engaging them in this Eternal Now.

By the time officialdom begins to move matter around (space ships & such) thinking it’s War, we will already be suffering casualties in this Eternal Now. That part is inevitable. It’s how we learn.

By the time officialdom realizes that some shit is going on in places and ways beyond its conception, we will already be pushing our dominance onto our partners in this First Contention, the Aliens. Nage cannot train without Uke.

Just as officialdom is scrambling to research the Ontology, this Eternal Now, and the event-stream, we will be settling terms with our new partners, the Aliens.

Come, join with us. It’s going to be a hellacious Contention.

We ARE the NEW HUMANS!

Together we are the Force that cannot be defeated.

Start YOUR training in this instance of this Eternal NOW.

Consume Neville Goddard videos as though all of human existence depended on YOUR mind and YOUR active, effective, imaginings!

It’s not a question of Mind over Matter as there is only Mind and it cares not for Matter. That’s residue.

Source

šŸ™ Donations Accepted šŸ™

If you find value in my content, consider showing your support via:

šŸ’³ PayPal:Ā 
1) Simply scan the QR code below šŸ“²
2) or visit https://www.paypal.me/thedinarian

šŸ”— Crypto DonationsšŸ‘‡
XRP: r9pid4yrQgs6XSFWhMZ8NkxW3gkydWNyQX
XLM: GDMJF2OCHN3NNNX4T4F6POPBTXK23GTNSNQWUMIVKESTHMQM7XDYAIZT
XDC: xdcc2C02203C4f91375889d7AfADB09E207Edf809A6

Read full Article
post photo preview
The Great Onboarding: US Government Anchors Global Economy into Web3 via Pyth Network

For years, the crypto world speculated that the next major cycle would be driven by institutional adoption, with Wall Street finally legitimizing Bitcoin through vehicles like ETFs. While that prediction has indeed materialized, a recent development signifies a far more profound integration of Web3 into the global economic fabric, moving beyond mere financial products to the very infrastructure of data itself. The U.S. government has taken a monumental step, cementing Web3's role as a foundational layer for modern data distribution. This door, once opened, is poised to remain so indefinitely.

The U.S. Department of Commerce has officially partnered with leading blockchain oracle providers, Pyth Network and Chainlink, to distribute critical official economic data directly on-chain. This initiative marks a historic shift, bringing immutable, transparent, and auditable data from the federal government itself onto decentralized networks. This is not just a technological upgrade; it's a strategic move to enhance data accuracy, transparency, and accessibility for a global audience.

Specifically, Pyth Network has been selected to publish Gross Domestic Product (GDP) data, starting with quarterly releases going back five years, with plans to expand to a broader range of economic datasets. Chainlink, the other key partner, will provide data feeds from the Bureau of Economic Analysis (BEA), including Real Gross Domestic Product (GDP) and the Personal Consumption Expenditures (PCE) Price Index. This crucial economic information will be made available across a multitude of blockchain networks, including major ecosystems like Ethereum, Avalanche, Base, Bitcoin, Solana, Tron, Stellar, Arbitrum One, Polygon PoS, and Optimism.

This development is closer to science fiction than traditional finance. The same oracle network, Pyth, that secures data for over 350 decentralized applications (dApps) across more than 50 blockchains, processing over $2.5 trillion in total trading volume through its oracles, is now the system of record for the United States' core economic indicators. Pyth's extensive infrastructure, spanning over 107 blockchains and supporting more than 600 applications, positions it as a trusted source for on-chain data. This is not about speculative assets; it's about leveraging proven, robust technology for critical public services.

The significance of this collaboration cannot be overstated. By bringing official statistics on-chain, the U.S. government is embracing cryptographic verifiability and immutable publication, setting a new precedent for how governments interact with decentralized technology. This initiative aligns with broader transparency goals and is supported by Secretary of Commerce Howard Lutnick, positioning the U.S. as a world leader in finance and blockchain innovation. The decision by a federal entity to trust decentralized oracles with sensitive economic data underscores the growing institutional confidence in these networks.

This is the cycle of the great onboarding. The distinction between "Web2" and "Web3" is rapidly becoming obsolete. When government data, institutional flows, and grassroots builders all operate on the same decentralized rails, we are simply talking about the internet—a new iteration, yes, but the internet nonetheless: an immutable internet where data is not only published but also verified and distributed in real-time.

Pyth Network stands as tangible proof that this technology serves a vital purpose. It demonstrates that the industry has moved beyond abstract "crypto tech" to offering solutions that address real-world needs and are now actively sought after and understood by traditional entities. Most importantly, it proves that Web3 is no longer seeking permission; it has received the highest validation a system can receive—the trust of governments and markets alike.

This is not merely a fleeting trend; it's a crowning moment in global adoption. The U.S. government has just validated what many in the Web3 space have been building towards for years: that Web3 is not a sideshow, but a foundational layer for the future. The current cycle will be remembered as the moment the world definitively crossed this threshold, marking the last great opportunity to truly say, "we were early."

šŸ™ Donations Accepted šŸ™

If you find value in my content, consider showing your support via:

šŸ’³ PayPal:Ā 
1) Simply scan the QR code below šŸ“²
2) or visit https://www.paypal.me/thedinarian

šŸ”— Crypto DonationsšŸ‘‡
XRP: r9pid4yrQgs6XSFWhMZ8NkxW3gkydWNyQX
XLM: GDMJF2OCHN3NNNX4T4F6POPBTXK23GTNSNQWUMIVKESTHMQM7XDYAIZT
XDC: xdcc2C02203C4f91375889d7AfADB09E207Edf809A6

Read full Article
post photo preview
US Dept of Commerce to publish GDP data on blockchain

On Tuesday during a televised White House cabinet meeting, Commerce Secretary Howard Lutnick announced the intention to publish GDP statistics on blockchains. Today Chainlink and Pyth said they were selected as the decentralized oracles to distribute the data.

Lutnick said, ā€œThe Department of Commerce is going to start issuing its statistics on the blockchain because you are the crypto President. And we are going to put out GDP on the blockchain, so people can use the blockchain for data distribution. And then we’re going to make that available to the entire government. So, all of you can do it. We’re just ironing out all the details.ā€

The data includes Real GDP and the PCE Price Index,Ā which reflects changes in the prices of domestic consumer goods and services. The statistics are released monthly and quarterly. The biggest initial use will likely be by on-chain prediction markets. But as more data comes online, such as broader inflation data or interest rates from the Federal Reserve, it could be used to automate various financial instruments. Apart from using the data in smart contracts, sources of tamperproof data šŸ‘‰will become increasingly important for generative AI.

While it would be possible to procure the data from third parties, it is always ideal to get it from the source to ensure its accuracy. Getting data directly from government sources makes it tamperproof, provided the original data feed has not been manipulated before it reaches the oracle.

Source

šŸ™ Donations Accepted šŸ™

If you find value in my content, consider showing your support via:

šŸ’³ PayPal:Ā 
1) Simply scan the QR code below šŸ“²
2) or visit https://www.paypal.me/thedinarian

šŸ”— Crypto
XRP: r9pid4yrQgs6XSFWhMZ8NkxW3gkydWNyQX
XLM: GDMJF2OCHN3NNNX4T4F6POPBTXK23GTNSNQWUMIVKESTHMQM7XDYAIZT
XDC: xdcc2C02203C4f91375889d7AfADB09E207Edf809A6

Read full Article
See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals