Article updated on 06/19/2024
Proof of Stake (PoS) networks like Flare rely on staking for security, but traditional staking often restricts access to your assets during the lockup period, limiting your liquidity.
The solution to this is liquid staking, which lets you stake your assets and receive a liquid staked token (LST) at the relevant exchange rate in return. This LST acts like a substitute for your staked assets and can be freely traded on Decentralised Exchanges (DEXs) or used in other DeFi protocols, unlocking the value of your staked assets and allowing you to earn additional income without sacrificing liquidity. To learn the difference between a Centralised and a Decentralised Exchange, we encourage you to read this article.
How does Sceptre Liquid Staking work and how do I receive my rewards?
While you stake with Sceptre, Sceptre claims rewards and FlareDrops for you. These rewards influence the exchange rate of sFLR (Sceptre’s Liquid Staked FLR) versus FLR.
As you can see in the graphic below, the price of sFLR vs FLR is continually increasing, which means your rewards are captured in the sFLR price.
When you wish to use your sFLR in another protocol, like a lending platform, you don’t have to unstake to “get your rewards”; they are added continuously so the sFLR in the lending platform will be worth more and more versus FLR.
It's important to note that the price difference between sFLR and FLR can be influenced by the source of the price feed: if the price comes from Sceptre, it will be constantly going up vs FLR, but any price feed based on a DEX pool is outside our control and might be less stable until arbitrage kicks in. Overall, Sceptre strives to provide accurate price information, but external factors can influence the displayed value.
How do FlareDrops come into the picture?
The entire FlareDrop is added to the pool as soon as it’s distributed. You can see your FlareDrop-related rewards in Sceptre's app.
What about staking rewards?
Staking rewards are added daily to the sFLR pool over a period of 14 days, thus increasing the value of sFLR vs FLR. This 14-day period is directly related to the frequency with which these rewards can be claimed and are distributed this way to protect the community from exploitation and double dipping. Once Flare increases the frequency of claiming for stake rewards, the distribution frequency will follow accordingly.
How do I stake Flare on Sceptre and regain liquidity while still getting FlareDrop rewards?
This process is fairly simple and you just have to follow the 3 steps below:
Step 1: Acquire FLR/wFLR
To get started, first you will need FLR or wFLR. If you have none at the moment, you can buy some at a Central Exchange (CEX) or swap for it at a Decentralised Exchange (DEX). If you bought your FLR at a CEX, you will need to move your FLR to your DeFi wallet (like Metamask) on the Flare network (you can follow this guide to learn how to add the Flare Network to Metamask).
Step 2: Stake Your FLR
Go to flare.sceptre.fi and open the app. Connect your wallet to the Sceptre App.
Select the type of FLR you have (FLR or wFLR) and
choose the amount you wish to stake before you
click "Stake". Follow the steps in your wallet, and at the end, you will receive your sFLR at the current exchange rate.
You can see the amount of sFLR in your wallet and what that means in wFLR by opening the Wallet Modal.
Step 3: Use your newly minted sFLR
Staking isn't a one-size-fits-all solution. Sceptre offers secure staking with liquidity, but for those seeking more, sFLR unlocks exciting DeFi opportunities for earning additional rewards. At the time of writing, one such opportunity is our partner Kinetic.market – a lending market on Flare with an sFLR market (release date unannounced). You can also explore earning additional yield by participating in liquidity pools on DEXs like Blazeswap.xyz or Enosys.global and Farming at Enosys.global.You can read more about commonly used strategies in Liquid Staking in this article on Medium.
As the Flare Network grows and other opportunities are created, you will agree that Liquidity is King 👑
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