The first LSD protocol of the ICP ecosystem StakedICP: Release NNS Liquidity

Recently, there have been many comments about "the token is dead" in the ICP community, reflecting the disappointment and frustration of early supporters. The performance of Internet Computer since its mainnet launch two years ago has indeed been unsatisfactory, leaving those supporters who staked ICP for as long as 8 years feeling frustrated.

Currently, the LSD narrative based on PoS tokens has been thriving on multiple mainstream public chains. This trend has also extended to the Internet Computer, as ICP holders can stake their tokens in NNS to participate in network governance, providing a foundation for the development of LSD. This article will introduce an LSD protocol within the ICP ecosystem - StakedICP.

Introduction to LSD

LSD stands for "Liquid Staking Derivatives," which are one of the hottest sectors in the crypto industry this year. LSD essentially serves as a substitute for staked PoS tokens, aiming to release the liquidity of staked assets. Users can earn staking rewards while using LSD for trading, providing liquidity, lending, and other DeFi activities to obtain additional profits.

According to the data, the TVL of the LSD sector is close to $22 billion, maintaining its position as the leader in the DeFi space since early March. LSD protocols not only enhance the security and stability of PoS networks but also maintain the flexibility for users to manage their assets, encouraging more people to participate in staking and DeFi activities.

How to Release NNS Liquidity for StakedICP?

NNS is the governance system of the Internet Computer, responsible for network upgrades, token economics, and more. Users who stake ICP become "neurons," participating in on-chain governance and receiving rewards. Currently, approximately 249 million ICP are staked, accounting for 49% of the total supply, with a TVL of about $821 million.

StakedICP is the first LSD protocol designed for NNS neurons, allowing users to stake ICP and immediately receive the liquid token stICP. stICP is the sole proof for redeeming ICP and can capture the daily earnings generated from staked ICP. In short, holding stICP is equivalent to holding ICP that is currently being staked.

The protocol is currently in the testing phase, with 123 users staking 2600 ICP, and an APY of approximately 15.8%.

When users stake through StakedICP, ICP will be staked on NNS, and they will receive stICP, which represents their staking share. As the voting rewards of StakedICP on NNS keep accumulating, the value of 1 stICP will gradually exceed 1 ICP.

For example, suppose the initial 1 ICP = 1 stICP, staking 10 ICP to obtain 10 stICP. A few years later, due to voting rewards, the total amount of ICP in the StakedICP neuron increases to 160, at which point 1 stICP is worth 1.25 ICP. Redeeming 10 stICP can obtain 12.5 ICP, which includes the NNS voting rewards.

StakedICP provides a more flexible staking solution for the IC chain. Users can obtain stICP through staking and redeem it at any time to participate in SNS project investments, achieving both "staking + new investment" without compromise. In the future, as the IC DeFi ecosystem develops, stICP is expected to gain more application scenarios, further enhancing the ICP staking rate and the scale of DeFi.

How to Use StakedICP

Currently, StakedICP has opened the staking function, allowing users to stake ICP to obtain stICP. In terms of redemption, currently only delayed unstakes (Delayed Unstake) are supported, which requires a certain amount of time to complete. StakedICP has 16 different staking term neurons to maintain redemption liquidity.

Fast redemption ( Fast Unstake ) feature is under development. Staked ICP will build a one-sided liquidity pool for stICP/ICP, allowing users to quickly exchange for ICP.

In terms of risk, StakedICP is still in the early stages and carries certain centralization risks. In the future, there are plans to reduce risks by launching SNS public offerings, allowing the community to take over the management rights of the smart contracts.

StakedICP Founder Interview Summary

The founder of StakedICP, 0xAegir, stated that the project aims to enjoy long-term staking returns of ICP while avoiding the inconvenience of long-term token lock-up. He looks forward to seeing more DeFi developers build new applications based on stICP, promoting the development of the IC ecosystem.

0xAegir introduced the operating principles of StakedICP and the future development roadmap. The core functionalities are expected to be completed by December this year, with internal testing and code auditing scheduled for the first half of next year, and the plan is to launch SNS in June.

Regarding the LSDfi application of stICP, 0xAegir expressed great anticipation. He believes that stICP can provide users with more flexible yield solutions, helping people to fully participate in the ICP ecosystem. At the same time, the unique technical characteristics of the IC chain also offer significant opportunities for DeFi innovation.

0xAegir emphasized that StakedICP is expected to become an important component of the IC DeFi ecosystem. He looks forward to seeing more innovative applications based on stICP, such as an exchange system combined with SNS and stICP stablecoins, to promote the further development of the IC ecosystem.