Stable Stake concept for Hedera

Introducing: Stable Stake HBAR
Stable Stake is a new product concept from Stader that provides USDC returns for staking HBAR through HBARX. The product is designed in such a way that the value of your staked amount in HBAR remains the same and a calculated yield in USDC accrues daily to the user.

How will it work?
Users will be asked to perform 2 steps

  • Stake HBAR using Stader to mint HBARX
  • Deposit HBARX in Stader’s new Stable Stake smart contract (you can also use already minted HBARX to perform this step)

As rewards accrue to HBARX, our smart contract will automatically convert a small amount of HBARX per day into USDC (on our partner DEX) such that the user’s total HBAR value remains the same and the accrued USDC increases each day. Users will be able to withdraw their USDC from the smart contract at any time.

The table below shows an illustrative calculation for 100k HBARX deposited in the proposed Stable Stake smart contract:

Notice how the HBAR value of your investment remains the same while the yield is captured in USDC.

How will APY be determined?
The APY for this strategy will be dynamically determined as is dependent upon

  • Underlying yield on HBARX staking
  • Price of HBARX in USDC on partner DEX (may not be the same as the price on a centralized exchange)
  • Conversion charges and fees

APY = (HBARX APR) (HBARX to USDC Swap price)(1-Fees) / (HBAR Price in USD)

What are the advantages of using Stable Stake?

1. Diversification
The product will offer an opportunity for HBAR / HBARX holders to diversify their exposure by earning yields in USDC (a stable coin) . This move proves beneficial during bear markets where users want long-term exposure to HBAR but want a short-term yield in stables

2. Flexibility
Being built on top of HBARX, Stable Stake provides unparalleled flexibility to users - they can choose to convert a portion of their portfolio to this strategy by simply depositing the appropriate % of their HBARX tokens. They can also convert from earning yield USDC to earning yield in HBAR by simply withdrawing HBARX from Stable Stake and HODLing it (the opposite can also be performed at any time)

3. Transparency
All funds are always on chain and completely verifiable through third-party explorers

4. Securing the network
By participating in Stable Stake through HBARX, the user’s HBAR will help secure the network as HBAR locked in the HBARX contract is staked with nodes

5. Promoting DeFi
Stable Stake uses liquid staking (through HBARX) and AMMs (through DEX partner) as part of the strategy, thereby promoting the DeFi ecosystem on Hedera

How can you get involved?
This product is still at the concept stage and we will make a decision on building this product based on user feedback. Please fill in this small form to capture your feedback.

1 Like

Love the idea, the issue will be all of the fees that are mentioned and are they less than if you were to do it manually. It seems like that is the kind of transparency I would want.

I am new to DeFi and wrapping my wits around all of the fees creates a lot of confusion.
I have spreadsheets on the Saucer Swap trying to figure out impermeant loss vs API.

Would I be right to assume that the fees would be split equally between all participants and so substantially lower.

1 Like

Hi,
This is currently at a conceptual stage. At the backend, we are working through the approximate figures and will come back with the exact fees soon. Also, some of this depends on the DEX partners as well.