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pSTAKE Project Summary: Binance supported LSD waist project
Summarized by AI
原文标题：《 pSTAKE 项目速览：币安支持的 LSD 的腰部项目 》
原文来源： Mint Ventures
1. Research points
1.1 Core investment logic
In addition to ETH liquidity pledge, BNB and ATOM pledge markets are beginning to gain investors' attention. Among these projects, the development of pSTAKE Finance after embracing BNBchain deserves attention. If pSTAKE Finance's other public chain strategies, such as ATOM's liquidity pledge service, can achieve the same dual business and ecological expansion as its BNB liquidity pledge service, then pSTAKE Finance deserves a careful look from investors.
1.2 Valuation
From the perspective of static valuation, pSTAKE Finance is expensive, which may be related to the concentrated distribution of PSTAKE chips: at present, more than 75% of chips are concentrated in several addresses, and the circulating market value is small.
1.3. Major risks
Public chain development risk: Right now, pSTAKE Finance is betting on ATOM and BNB's liquidity pledge business, and the biggest beta in the future comes from public chain development. staking staking staking staking staking staking staking staking staking staking staking staking staking staking staking staking staking staking staking staking staking In the future, we need to expand other potential public chains with low pledge rate, which is a great test of the strategic judgment of the founding team. Contract risk: On December 2, 2022, the contract risk problem of Ankr affected the BNB pledge track and has not fully recovered to the pre-incident level until now. If something like this happens again, and pSTAKE Finance has a liquidity pledge service on such a public chain, then pSTAKE Finance is likely to suffer as well. staking, staking, and staking, staking, staking, staking, staking, staking, staking, staking, staking, staking, staking, staking, staking, staking, staking, staking.
2. Basic information of the project
2.1 Business scope of the project
pSTAKE Finance is a liquid pledge agreement that currently focuses on liquidity pledge services for Ethereum, BNBchain and Cosmos. In the future, it is expected to expand the liquidity pledge business of more public chains and expand its LSD application scenarios in other DeFi.
2.2 Past development and roadmap
Developed by Persistence, pSTAKE Finance has gone through the following two phases since its inception in 2020:
The first stage:
Q4 2020: Project concept was determined and MVP was designed; Q1 2021: pSTAKE Finance is staking. Its primary business line is to provide Cosmos staking. 2Q2021: Launch of airdrop and bug bounty and contract audit; Third quarter of 2021: pBridge (cross-chain bridge developed by pSTAKE Finance) verifier and pSTAKE verifier go online; Fourth quarter of 2021: pSTAKE Finance main network was launched and public offering was conducted; Q1 2022: Expansion to COSMOS Other Chain (Terra); Q2 2022: Launch ETH staking services;
The second stage:
Third quarter 2022: launch V2 version, promote stkToken usage scenario, reach strategic cooperation with Binance, provide liquidity pledge service for BNB, and officially launch in August 2022; Q4 2022: Drive PoS asset management and plans to offer ATOM pledge services within the Persistence Core-1 Chain, a COSMOS based public chain developed by the Persistence team, and offer more DeFi services from stkATOM.
2.3 Service Situation
2.3.1 Service Objects
pSTAKE Finance's primary service target is users who hold POS public chain tokens. In order to provide a complete pledge service and realize the security of the verification link, pSTAKE Finance finds the verifier meeting the requirements through a verifier scoring system, and puts the user's public chain token to the verifier for pledge.
Client: Since the launch of pSTAKE Finance, it has provided pledge services for ATOM, XPRT, ETH and BNB public chain tokens. Also included in the early plans are future pledge services for SOL, AVAX, and other Cosmos Layer 1 public chain tokens. As the business progressed, especially after a strategic partnership with Binance in 2022, pSTAKE Finance focused its business on ATOM and BNB tokens. Validator side: pSTAKE Finance has chosen to partner with a number of good validators to provide validation services for pBridge and liquidity pledge businesses. At present, the validator partners of pSTAKE Finance include Figment, Chorus One, CertiK, etc.
2.3.2 Service Classification
Source:https://app.pstake.finance/
At present, pSTAKE Finance supports ATOM, BNB and ETH pledge services, among which stkATOM and stkXPRT are being migrated. Future liquidity pledge services for ATOM and XPRT will be conducted on the Persistence Core-1 Chain public chain developed by pSTAKE Finance.
2.3.3 Service Details and Multi-chain Deployment
The liquidity pledge business model can be simplified as follows:
The mechanism varies between POS chains, but the general business logic is as above. Among ATOM, ETH and BNB pledges, BNB is a special one. There are two chains related to BNB: BNB Beacon Chain, which is responsible for BNB governance and pledge; BNB Smart Chain, compatible with EVM, supports the running of all types of DApps. In addition, BNB's validator has designated 42.
As with other LSD programs, pSTAKE Finance takes a fee when it provides its services: In ATOM's case, 5% of the rewards earned during the pledge period are paid to pSTAKE Finance as a fee; There is also a "Redeem Instantly" fee of 0.5% of the total amount for users who want their pledged token quickly when they cancel their pledge.
Source: pSTAKE Finance, Mint Ventures
In addition to providing pledge services, pSTAKE Finance also provides users with their own pledge certificates for application scenarios: Take pSTAKE Finance's BNB staking document, stkBNB, for example. While BNB staking is staking later in staking, with Binance staking in the second half of 2022, eco-partners are staking fast. Users' stkBNB can be applied to many mainstream DeFi in the BNBchain ecosystem. For example, stkBNB can be deposited in Beefy Finance to earn extra income, and can also be used as margin for trading in OpenLeverage. It can also be stored in Midas Captal to earn the loan proceeds and so on.
In contrast, stkATOM and stkETH's app scenario tie-ups have been slower to move forward.
2.4 Service Data
Overall TVL
Current pSTAKE Finance TVL totals approximately $7.41 million, of which approximately 60% is BNB, 40% is ATOM, and ETH staking is next to negligible.
Price anchoring and liquidity
The following two graphs are of stkATOM. Although the cooperative DEX generally has poor liquidity and a short period of cooperation, stkATOM does not show a large deviation on the whole, and the proportion of stkATOM and ATOM in the trading pair is balanced.
Source:https://info.osmosis.zone/pool/886
Generally speaking, the liquidity of the two pools can basically meet the demand of users for small-scale non-slip point exchange.
After the stkBNB-BNB exchange went live, the main unstake occurred on December 2, 2022, but this was not due to any major problems of pSTAKE Finance itself, but due to the Ankr attack: On the same day, the attack on Ankr led to the overcasting of its aBNBc, which triggered market concerns about BNB LSD assets. However, stkBNB returned to the anchor one hour after shedding the anchor, with no lasting impact.
Source:https://dexscreener.com/BNBchain/0xaa2527ff1893e0d40d4a454623d362b79e8bb7f1
Source: https://info.wombat.exchange/#/assets/0x0e202a0bcad2712d1fdeeb94ec98c58beed0679f
The stkBNB-BNB pool size of Thena and Wombat can also meet the exchange needs of users on a small scale without slippage.
As ETH pledge business has been greatly reduced, the current Uniswap V3 project Stketh-eth transaction for TVL only slightly more than $50,000, the price loss caused by trading one stkETH has reached 7.25%.
Source: https://eth.pstake.finance/defi
Source: https://app.uniswap.org/#/swapchain=mainnet& inputCurrency=0x2C5Bcad9Ade17428874855913Def0A02D8bE2324& outputCurrency=ETH
2.4 Team Situation
2.4.1 Overall situation
According to LinkedIn, Persistence, the development and operations team behind pSTAKE Finance, has a total of 45 employees comprised of engineers, marketing, BD, media and community operations.
Source: (2) personal Labs: People | LinkedIn2.4.2 founder
Source: Tushar Aggarwal | LinkedIn
Tushar Aggarwal is the co-founder and CEO of Persistence and a graduate of Nanyang Technological University in Singapore. Prior to founding Persistence, he worked at crypto funds Decrypt Asia, Antler, LuneX Ventures, and was also a partner at Outlier Ventures. In 2019, Tushar founded Persistence in the hope of driving the Cosmos Eco-liquidity pledge business. Subsequently, in 2020, led the Persistence team to develop the pSTAKE Finance project.
2.4.3 Core Members
Members of the major lines of business have rich and deep backgrounds in related fields.
Head of Ecology and Marketing: Abhitej Singh, formerly head of marketing and media at BLOCK42.network, became co-founder of Cosmos India in 2019. Project Leader: Mikhil Pandey has been at Persistence, where he has held positions as a market research assistant, Head of Strategy and Business Development.
2.5 Financing Situation
pSTAKE Finance went through two separate rounds of financing.
In November 2021, pSTAKE Finance closed a $10 million funding round at a valuation of $50 million, and the platform token PSTAKE was sold at $0.1 per coin. Investors include Three Arrow Capital, Sequoia India, Galaxy Digital, Defiance Capital, Coinbase Ventures, Tendermint Ventures, Kraken Ventures, Alameda Research, Sino Global Capital and Spartan Group. Ajit Tripathi, head of institutional business development at Aave, Do Kwon, founder of Terra, and Tascha Punyaneramitdee, co-founder of Alpha Finance, also participated in the round. In December 2021, pSTAKE Finance completed a $10 million funding round on CoinList and sold 5% of the tokens. The platform token PSTAKE was sold at $0.4 per coin, with an estimated value of $200 million. In May 2022, pSTAKE Finance received a strategic investment from Binance Labs for an undisclosed amount.
3. Service analysis
3.1 Industry space and potential
3.1.1 Classification and market size
Among the public chains whose TVL is higher than $200 million, the average pledge rate is 46.9%, except for some of the public chains that have not launched the pledge business. Among them, Ethereum, Tron, Polygon and other public chains pledge rate is lower than this level. As Ethereum's Layer 2 network comes online, more chains will offer its token pledge service in the future. Some investors in the market are more optimistic about the pledge ratio of the public chain, and the pledge rate of Layer 2 will also reach the corresponding proportion.
For a liquid pledge track, assuming the market value stays the same, the pledge size of a single chain is relevant only to the pledge ratio. The overall revenue size of the track is also relevant to the PoS yield rate and the percentage of service charges. The average pledge yield of the chain in the chart below is about 8.6%.
Source: DeFi Llama, StakingRewards, Mint Ventures, data as of 04/11, 2023
In the current market, the liquidity pledge project generally takes 5%-15% of the income as the service fee. According to the PoS yield rate of 8.6%, the total yield rate of liquidity pledge project is between 0.43% and 1.29%. Thus, we can roughly estimate the rough relationship between the liquidity pledge profit and the market value of the public chain. Of course, we can also adjust the PoS yield rate for estimation.
Source: Mint Ventures, data as of 04/11/2023
By assuming a different valuation parameter -- PS ratio, we can also get the data in the figure below.
Source: Mint Ventures, data as of 04/11/2023
Therefore, if we only start from the basic dimension of liquidity pledge base, to improve the overall valuation of liquidity pledge track, we need to find a public chain with substantial growth of pledge rate, PoS yield rate and market value in the future.
Since liquidity pledge projects provide users with very similar services, under the condition of no obvious difference in rates, users are more inclined to preferentially occupy the market, have a long-term safe operation record, good LSD liquidity and no obvious discount projects. Taking Ethereum liquidity pledge track as an example, the market share of TOP 3 in the market has reached 94.8% at present, among which Lido alone occupies 73.4%. The Lido program is older than some other liquidity pledge programs.
The high market share also has something to do with stETH's performance. With the exception of the last two years, when the market has seen sharp declines, stETH has had few notable anchor breaks. It is also highly liquid. For Steth-Eth pool on Curve, a single transaction of 100,000 stETH has only 0.78% impact on the price, while for cbETH, which ranks second, only about 623 stETH are needed to achieve a similar value loss in a single transaction. It can be seen that Lido is a better choice for large investors with large ETH holdings. Of course, the subsidy incentive provided by Lido is also one of the important factors leading to its high market share.
Source: https://dune.com/LidoAnalytical/Lido-Finance-Extended
Source: https://curve.fi/#/ethereum/pools/steth/swap
Source: https://curve.fi/#/ethereum/pools/factory-crypto-91/swap
3.2 Analysis of the token model
3.2.1 Total amount and distribution of tokens
A total of 500 million tokens, PSTAKE, went into circulation in February 2022. Among them:
2% belongs to Alpha Launchpad and is distributed to Alpha Finance's pledge users and Alpha Finance. Initially, it was a loan project, and now it has become an Alpha Finance DAO, providing comprehensive services including project incubation, VC, etc.) team; 20% is a strategic sale that starts unlocking 6 months after the investment, followed by a linear unlock within 12 months; 5% are public offerings on CoinList, of which 25% are unlocked on the day of sale and the rest are unlocked linearly within 6 months; 6% is retroactive reward for liquidity providers of stkATOM-ETH and stkXPRT-ETH pools. Linear unlocking will be completed within 6 months; 16% belonged to the team, which unlocked the token 18 months after it opened in the secondary market and completed linear unlocking within the following 18 months; 26% are incentives and Community development funds: linear unlock every quarter and unlock all within 2 years; 3% belongs to XPRT pledge, quarterly linear unlock within 1 year; 20% belongs to the Treasury. The tokens are unlocked linearly within 24 months after they are circulated in the secondary market. The 2% is bootstrapping of the project, which is ready to be circulated once the token is online.
Source: https://blog.pstake.finance/2021/12/13/pstake-tokenomics/
Source: https://blog.pstake.finance/2021/12/13/pstake-tokenomics/
According to the above token release rules, about 55.2% of the token PSTAKE is already circulating and will be fully released by 2025. Average annual inflation of about 35 per cent over the next two years is high.
3.2.2 Token value capture
At this stage, the PSTAKE token only has a governance function and does not share the revenue of the project. The holder of a PSTAKE can participate in the governance vote of the community and can also pledge the security of the PSTAKE maintenance project.
3.2.3 Core demand side of tokens
At the present stage, the token of pledge governance function is recognized by investors, there may be two factors:
Directly participate in governance and influence the development direction of future projects. pSTAKE Finance stipulates that investors/institutions holding at least 250,000 PSTAKE tokens can initiate proposals within the community. This may be more attractive to investors with large capital volume and the ability to bring ecological support and business resources to the project. By initiating and voting on proposals, large investors can influence pSTAKE Finance fees, public chain deployment strategies, ecological incentives, and other aspects that may allow the value of PSTAKE to grow in the medium to long term.
Source: https://blog.pstake.finance/2022/03/24/introducing-pstake-community-governance/
Similar to UNI, the value capture of tokens is likely to be achieved through subsequent proposals. However, it is not necessary for UNI to acquire value capture or profit sharing attributes in the near future. In the stock market, stocks issued by companies with high growth rate may not necessarily pay dividends within a certain period of time. For example, Amazon's stock has not paid dividends for a long time, but it does not affect the long-term rise of Amazon's stock price, because the company is still in the stage of long-term rapid growth and needs a lot of investment. So PSTAKE may not have a cash flow dividend in the short term, but it needs to expand, whether it's a multi-chain deployment strategy like Uniswap, or a multi-line development model like Frax Finance, As long as the pSTAKE Finance project can grow through expansion, the lack of value capture capability may not be a core concern for potential investors at this stage.
3.2.4 Summary of token model
Judging from the token economy model, there is room for improvement in PSTAKE. For example, in view of the high inflation rate in the short and medium term, Ve model can be adopted to slow down the inflation pressure in the short and medium term, improve the efficiency of governance and retain long-term investors. It is important to note that the ve model is a possible solution, and the final token appeal still depends on the project itself. Without the obvious benefits of participating in governance, the ve model cannot save the currency price.
For value capture, in the middle and late stages of a project's rapid growth, pSTAKE Finance can put a portion of the cost to buybacks, etc., and the income earned at this stage does not have to be all in the Treasury. Some of the money can be used for ecological promotion, or even to buy tokens for other projects that can have synergistic effects.
3.3 Project competition pattern
3.3.1 Basic Market Pattern & competitor
From the perspective of pSTAKE Finance's business layout and external cooperation, BNB and ATOM liquidity pledge services are important directions that will determine its development in the future. The competitive pattern of liquidity pledge of these two tokens, especially the liquidity pledge of BNB, is very critical. The dimension of token liquidity and ecological cooperation is the focus of our attention.
In the BNBchain ecosystem, there are currently 5 companies providing liquidity pledge services: Ankr, Stader, SteakBank Finance, Stafi and pSTAKE Finance. From a rate perspective, pSTAKE Finance charges in the middle.
Source: Project websites, Mint Ventures, data as of April 11, 2023
In terms of ecological cooperation, pSTAKE Finance currently has the most diverse application scenarios, which can basically meet most of the financial needs of PSTAKE holders in the BNBchain chain.
In terms of liquidity, pSTAKE Finance can meet the trading needs of large households with small slippage points.
Source: Project websites, Mint Ventures, data as of April 11, 2023
Currently pSTAKE Finance lags behind Ankr and Stader in the number of BNB pledges (third within the liquidity pledge circuit on the BNB Chain).
Source: Project websites, Mint Ventures, data as of April 11, 2023
Cosmos' liquidity pledge market currently consists of Stride and pSTAKE Finance. We're still looking at it from the above dimensions. In contrast, the rate of pSTAKE Finance is low, and the depth of its depositary receipts can meet the entry and exit needs of small and medium liquidity at present. In the future, with the growth of the demand for ATOM liquidity pledge, at least in the competition with Stride, pSTAKE Finance has the opportunity to gradually increase its market share.
Source: Various project websites, DeFi Llama, Mint Ventures, Data as of 4/11/2023
3.3.2 Project competitive advantage
From the above comparison, we can find that the core competitiveness of pSTAKE Finance is highlighted after Binance investment:
stkBNB has a wide range of application scenarios: After obtaining Binance investment, pSTAKE Finance has the full support of the current BNBchain ecology, and stkBNB can almost meet most of the needs of users for on-chain financial scenarios. stkBNB has good liquidity and smooth access channels for traders: the number of BNBS pledged on pSTAKE Finance reaches the third level in the current market, and in terms of liquidity, it can also meet the needs of ordinary investors.
These two points are where other liquidity mortgage businesses, such as ATOM, are heading.
3.4 Project Risk
Combined with the problems of the liquidity pledge track itself, the pSTAKE Finance project mainly faces the following three types of risks:
Public chain development risk: Since pSTAKE Finance is now betting on ATOM and BNB's liquidity pledge business, the biggest future development beta comes from public chain development. If COSMOS and BNBchain fail to achieve significant growth, then the impetus from the public chain level will be less from BNBchain. Moreover, BSC and COSMOS have high pledge rates, and there is limited room for future growth from higher pledge rates.
staking, staking, staking, and staking. If we want to grow our business, then we need to staking, staking, and staking in other potential staking chains. The bet on the public chain is undoubtedly the focus of many entrepreneurs and investors, but from the development process of the public chain, can really grasp the promising public chain, which undoubtedly tests the strategic vision of the founding team.
Contract risk: Contract attack will cause a lot of bad debts, and it should be noted that the risk of contract attack is not limited to the project itself, if the project of the same track is attacked, it may also affect other projects of the same track. On December 2, 2022, Ankr contract risk problems, resulting in its liquidity pledge certificate (LSD), aBNBc appeared a huge secondary issue. Ankr is staking staking. Ankr is staking something else. The pSTAKE Finance and Stader businesses shrank by more than 70% over the same period and are only now largely back to their pre-event levels.
Source: https://dune.com/David_C/liquid-staking-on-bnbchain
Source: https://dune.com/David_C/liquid-staking-on-bnbchain
Source: https://dune.com/David_C/liquid-staking-on-bnbchain
staking, staking, and staking. As PoS chains continue to grow, and pledge rates continue to rise in the future, staking and staking will be staking. If the above reasoning occurs, it will undoubtedly lead to a substantial reduction in the overall profit margin of the liquidity pledge track, thus reducing the value within the track project. This has happened more than once in traditional financial markets, where fees for trading Chinese A-shares have been cut to as low as 500 per cent, and custody business in Chinese banks has even been given away free with other corporate business.
4. Preliminary value assessment
4.1 Core Issues
For pSTAKE Finance, the core issues that determine its value depend on three things:
Strategy of public chain selection: From the business inflection point of rapid expansion of BNBchain business after accepting Binance strategic investment, pSTAKE Finance's strategy of embracing public chain with development potential and linking ecology through capital and other channels deserves recognition. A similar development model can serve as a template for expanding new public chains.
Whether there is a substantial discount on liquidity pledge certificate LSD: staking. pSTAKE Finance's staking staking is based on ATOM and BNB, both of which are staking. This staking is friendly to large investors, and liquidity is not an issue with staking. Does LSD link enough ecosystems to extend usage scenarios: What's working now is that stkBNB can be used in a wide enough range of scenarios. The future of stkATOM is still uncertain, especially the expansion of stkATOM application scenarios has not received support from Cosmo officials, other DeFi projects and related capital parties, and the ability of the team to independently expand the ecology remains to be investigated.
4.2 Valuation level
From the perspective of static valuation, pSTAKE Finance is obviously high. The high valuation may be related to the concentrated distribution of PSTAKE chips: at present, more than 75% of pstakestakechips are concentrated in several addresses, part of which is unreleased tokens. The relatively small circulating market value provides investors in the market with a large space for speculation. Compared with the current situation that 85% of the tokens of Lido have entered the circulating stage, the price of PSTAKE is more susceptible to the influence of market makers.
Source: https://app.bubblemaps.io/eth/token/0xfb5c6815ca3ac72ce9f5006869ae67f18bf77006
Source: https://app.bubblemaps.io/BNBchain/token/0x4c882ec256823ee773b25b414d36f92ef58a7c0c
4.3 Summary
From the perspective of business development strategy and current layout, pSTAKE Finance currently has some competitiveness in BNB liquidity pledge circuit, the next test is how to expand stkATOM application scenarios and how to win customers with ATOM's high pledge rate. Whether it is the project side's own efforts to expand customers, or through the successful case of copying Binance investment, the development status of stkATOM is the touchstone to test the real operation ability of the team.
On valuation, this may not be a good window of time to buy PSTAKE, and investors need to wait for prices to fall or fundamentals to grow quickly before making a decision. If the Atom-based liquidity pledge business shows signs of turning around, PSTAKE could be in range.
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