- ID.IOTA has, in a recent post, explained how users could greatly benefit from the IOTA staking capabilities by making use of Swirlstake.
- For those who would rather invest in IOTA instead of a stablecoin, it was advised that they use Deepr Finance, which provides a good percentage of yields.
As recently updated by CNF, IOTA has successfully executed the mainnet upgrade of the much anticipated Rebased Protocol with full programmability and staking capabilities. As also mentioned in our previous news story, just 1 IOTA is required to stake with the Annual Percentage Yield (APY) positioned at 10-15%.
To explain some of the ways holders can take full advantage of these new capabilities, an educational X page of the project ID.Iota has created a thread, highlighting the intricacies around the whole process.
Firstly, ID.Iota hinted that individuals who stake with one of the existing Validators could earn up to 30% APR. However, it was pointed out that the new update comes with its own challenges. The issue is that users are stuck with the decision of either choosing a validator or exploring the Decentralised Finance (DeFi) ecosystem with their tokens. According to ID.Iota, this also presents an opportunity to earn staking rewards while actively participating in the DeFi ecosystem.
Going straight to the point, ID.Iota pointed out Liquid Staking as a provable method to earn passively on IOTA Rebased. Shedding more light on this, it was stated that staking with Swirlstake (the first liquid staking protocol on IOTA) could generate $stIOTA for users in return, as confirmed in our previous news story.
Fascinatingly, the real income comes with the stIOTA steadily growing over time by simply holding them in various wallets. Meanwhile, Swirlstake was disclosed to take 10% of the staking rewards as fees.
What To Do With the $stIOTA Tokens?
According to ID.Iota, there is nothing to directly do with the stIOTA tokens now unless it involves Virtue.Money. With its testnet currently live on the Rebased Protocol, Virtue enables individuals to use IOTA or even stIOTA to mint a stablecoin (vUSD).
Explaining why it is necessary to mint vUSD, it was stated that the stablecoin has several loads of possible DeFi strategies, with one of them being “Yield”. However, this would be possible by using Deepr Finance, which provides yield in exchange for stablecoins. According to the thread, the yield for providing IOTA is “criminally” poor. This makes it reasonable to only mint vUSD with IOTA and offer the vUSD on Deepr for a 6.6% APY.
The second strategy is to increase the leverage position by a small margin once a user has the confidence that IOTA could return to $5. According to the post, this is called Loop. Specifically, it works by providing stIOTA as collateral to mint vUSD, and use it to buy more IOTA. Repeating this three or four times could double and triple earnings on every IOTA pump. However, there is a risk of getting liquidated quickly.
The last strategy mentioned by ID.Iota is “LP.” According to the details, this is ideal for individuals who would prefer to invest in IOTA while earning the LP-Yield instead of investing in stable coins. It works by providing IOTA as collateral to get vUSD and providing it alongside another batch of IOTA as LP.
