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MixBytes Launches Lido Liquid Staking for Kusama on Moonriver

Author: MixBytes team
MixBytes is proud to announce the launch of Lido Liquid staking for Kusama on Moonriver. We have spent more than 9 months developing this protocol with close cooperation from Lido and Moonriver teams. The goal of our mission was to develop a truly decentralized and non-custodial way to utilize the "frozen" potential of staked Kusama tokens. We are happy to be the first such complex solution to use the XCM cross-chain communication functionality of Kusama and Polkadot. We added a lot of safety features as well such as Ledgers to isolate any slashing events to only a portion of the funds. See more in our tech docs.

All protocol contracts are audited by a separate MixBytes auditing team. See report here.
Overall product values
Lido Liquid staking for Kusama will enable users to
  • Leverage defi by receiving LP rewards and using their liquid tokens as collateral
  • Liquidate(sell) their tokens without the delay of the unbonding period
  • Maximize their staking rewards as Lido protocol will dynamically reallocate stakes to validator nodes with the most profitable
  • Minimize the risk of slashing events
Launch stages plan
First stage: approximately 1-3 weeks from launch
  • The stake cap for this stage will be applied at 10k KSM or approximately 1.6M USD
  • Reward oracles will be maintained by the MixBytes dev team
  • Launch of defi pools with incentives
  • Best APR to stakers net of validator's fees
  • No slashing events
  • Stable fee rate
  • Nominations enabled by the node
Second stage: 1-2 months
  • Uncapped stake
  • Uncapped # of validator nodes
  • Launch of decentralized reward oracles
  • Development of a predictive model to increase APR even more
Lido fee structure
Edge cases:
  1. Node fee is 0% then total Lido user APR = Node APR * (1-10%Lido fee)
  2. Node fee is 20% then total Lido user APR = Node APR * (1-20%NodeFee)*(1-10%Lido fee)
Optimized net APR to lido user expected to be > than "uninformed" average staking APR (see simulation)
APR reward simulation
We've performed a preliminary simulation of rewards with and without the Lido liquid staking dynamic allocation system. The actual result may vary and will be optimized throughout the life of the protocol.
Simulation parameters
For the Lido staking scenario
  • Lido protocol fee is 10% of net staker rewards
  • A stake allocated per node is 1000 KSM (200000 USD)
  • Overall stake in the Lido protocol is 100000 KSM (20000000 USD)
  • # Of Validator nodes selected by Lido protocol is 100

For average "uninformed" staking

  • A stake of 100000 KSM (52200 USD) equal to Lido simulation allocated to all validator nodes in the active set excluding nodes with 100% fee (766 nodes).
Simulation results
100000 KSM total stake:
  • Lido APR - 18.15%
  • Uniformed staking APR - 10.63%

10000 KSM total stake (test cap):

  • Lido APR - 19.69%
  • Uniformed staking APR - 10.64%

See all nodes performance rated here
Risks of centralization
MixBytes and Lido support efforts to maintain blockchain decentralization efforts. We are actively following the proposal about setting the minimal validator fee and designing the system in a way that does not take into account KYC information, size of the validator operation - only the actual optimization and performance of the validator node which is utilizing high-performance nodes even with fees as high as 10% (see the simulation results).

Our early stages system doesn't select the nodes manually but solely based on performance. We feel that this will help to level the playing field for small validators. They won't be at as high of a disadvantage competing with the big node operators that market their services to acquire new stakers. No marketing expenses are needed, just create a well-performing node and the stake will come to you.

We follow closely the initiatives to set a minimum node fee for Kusama so that big validators can't undercut the small ones with scale. Our system is designed to seamlessly support this.

At a stage when Lido's stake will grow to materially affect staking allocation in Kusama we are going to work with the community and validators to protect decentralization and blockchain's health.
The information contained in this Website is for educational and informational purposes only and shall not be understood or construed as financial or investment advice.
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