Summary
The pSTAKE team proposes to enable fees for stkBNB, the liquid staking solution for the BNB chain. The team proposes to change the initial announcement of no fees for 90 days by bringing in a 3% fee for staking rewards earned on the staked BNB. This fee is essential to enable a referral program for stkBNB that will help in increasing the TVL and bringing new use cases to the stkBNB token. The entire fees collected during the remaining period of the 90 days period from launch (until 7th November) will be strictly used for the referral program. After the 90 days period, the fee will be set to 5% and will be used for a combination of referral programs and community funds.
Introduction
pSTAKE’s liquid staking solution for the BNB chain, stkBNB, went live on 8th August. The product is gaining good traction with USD 7.5 M+ in BNB (29k + BNB) staked in the protocol. For the first 40 days since launch, the pSTAKE team has primarily focussed on DeFi integrations to bring new use cases to the stkBNB token and attract retail users. The team also waived the protocol fees for users which has already provided USD 1.4K+ worth of benefits to pSTAKE users. The next step of growth for stkBNB is attracting large holders of BNB - DeFi wallets, DAO treasuries, whales, and institutions.
Through this post, we want to discuss with the community about our plan to tap into these markets by launching a referral program tailored towards these business agreements.
Why a referral program is needed
pSTAKE team has integrated with multiple protocols in the BNB chain ecosystem to bring DeFi use cases for the stkBNB token. The integrations have two major effects -
- stkBNB token gets new use cases allowing users to get the maximum benefit out of liquid staking
- The community of these DeFi ecosystems gets to know about the liquid staking product and many are incentivized to try out the product
The integrations work well to attract retail crypto holders. But, convincing mass products like DeFi wallets require the pSTAKE team to build incentives for these products to earn revenue through the additional features they provide to their users. A referral program has been developed by the pSTAKE team which rewards users or protocols that introduce new stakers to stake with pSTAKE. A referral program works best in such a scenario as the product/referrer will earn incentives based on the amount of stake they bring to pSTAKE. The referral program will also help in incentivising users and teams who introduce the pSTAKE protocol to DAOs, whales, and institutional holders of BNB.
Incentivisation for the referral program
The pSTAKE team wants to incentivise these actors who can introduce the BNB chain liquid staking product to other BNB holders. The ideal incentivisation method is to pay the referrers with the revenue they bring to the pSTAKE protocol. But, with the protocol fees currently waived off during the bootstrapping phase of the protocol, the BNB chain liquid staking product is not earning any revenue.
Within this context, the pSTAKE team is proposing to enable protocol fees for the BNB chain liquid staking product. The fees will allow the team to incentivise these business partners, and that will bring more TVL and users to pSTAKE.
A higher TVL results in a more liquid token that would allow stkBNB holders to exit their positions more easily. This will give the pSTAKE team greater leverage when pushing for integrations with other products in the BNB chain ecosystem and ultimately lead to much wider use cases for the stkBNB token holders.
Proposal for fee update
The pSTAKE team realises that we had set out with no protocol fee for the initial bootstrapping phase of 3 months. But, bringing more users to the protocol without giving out PSTAKE tokens demands enabling a referral program. The referral program will bring long-term benefits to both stkBNB holders in terms of more utility for the token and PSTAKE holders in terms of more revenue to the protocol.
At the same time, the pSTAKE team is cognizant of the initial announcement and proposes to set an initial fee of 3% (against the baseline of 5% fee) of the BNB staking rewards earned by the protocol for the remaining of the 90 days period from launch (ending 7th November). The entire fee will be used for the referral program and the protocol will not book any of the fee revenue for the community fund until the 90-day period is over.
After the end of the 90-day period, the protocol fee will be set at 5% of staking rewards earned on the staked BNB.
As the next steps, the pSTAKE team encourages everyone to provide their feedback based on which we will be putting forth a snapshot proposal up for voting.