Given the burgeoning DeFi ecosystem, Tezos Capital CEO Jonas Lamis is launching StakerDAO, a decentralized autonomous organization (DAO) that will decide on which blockchains to stake for.
Booming DeFi Market the Inspiration Behind StakerDAO
According to DeFi Pulse, around $700 million is locked inside DeFi smart contracts. The majority of that is within the MakerDAO ecosystem, an Ethereum product.
MakerDAO is a DAO that allows borrowers to borrow the DAI stablecoin against Ether deposits. MKR token holders determine the interest rate and the collateralization ratio.
For its part, StakerDAO is similarly positioned to allow STKR holders to benefit from an underlying DeFi protocol. Token holders will vote on which Proof-of-Stake (PoS) networks to participate in and maximize their returns. Built on Tezos, the protocol essentially minimizes single token risk. By being able to switch from one PoS network to another, or stake for multiple networks, STKR holders can reduce exposure to risk and maximize staking rewards.
Decentralized Governance Set to Grow
The lead developer behind StakerDAO, Tezos Capital CEO Jonas Lamis, blended two ideas together.
After researching “opportunities to create synthetic derivatives from the PoS ecosystem that could provide the long term upside that I envisioned, while also spreading the downside risk across the best PoS networks,” Lamis also became keenly aware of the importance of governance.
Tezos boasts a staggering 80 percent participation in on-chain governance decisions too. Lamis saw promise in having an engaged community committed to on-chain, decentralized governance:
“I was watching governance evolve on Tezos and on MakerDAO and saw that having a community of informed and incentivized decision-makers guiding the long term growth of projects is likely a better model than tight centralized control.”
Governance and earning returns from decentralized finance were fused into the single entity of StakerDAO. The original concept was outlined in Oct. 2019 and is set to launch in Q1 or Q2 this year.