The Yield Bearing Masterpiece — sFTMx
Beethoven X is proud to introduce the ultimate Fantom tech stack.
A Liquid Staked Token protocol supercharged with Yield-Bearing native DEX technology!
Put simply, Beethoven X is now positioned as THE ultimate yield-bearing hub on the Fantom blockchain, governed by the Beethoven X DAO, and powered by maBEETS holders.
Background
On the 5th of November 2023, Stader governance passed a proposal to officially sunset their liquid staking products on Fantom. As the number one LST provider on Fantom, Stader’s departure represented a significant setback for the network and the steadfast community that calls the chain home. However, as all musical greats know, the end of one melody simply signals the start of a new masterpiece.
Shortly after the announcement, Beethoven X contributors opened discussions and agreed on terms with the Stader team for the Beethoven X DAO to take over the management of Stader’s sFTMx deployment. BIP-61 presented these terms to the DAO, and after the preliminary discussion and voting period, the proposal passed with flying colors.
An Essential of DeFi
With over $40.368b in liquidity across all chains, liquid staking has become a dominant and powerful ecosystem component across DeFi. In fact, by offering users a liquid asset whilst simultaneously generating native staking yield and securing the network, LSTs have become a fundamental cornerstone of the Defi tech stack. There’s no denying that being the primary LST provider on Fantom, the closure of sFTMx would have been a huge blow to the Fantom network.
As a Fantom OG, Beethoven X is dedicated to the chain, and it only felt natural for the DAO to step up to carry the torch for the ecosystem. Stader’s sFTMx deployment is built on battle-tested, community-trusted contracts, with the staking solution hosting over $13 million of Fantom back in February 2023.
With the recent approval of the sFTMx transfer to the Beethoven X DAO, all maBEETS holders have inherited control of a liquid staked protocol with 6 million FTM deposited and a system that has already generated lindy within a household and trusted FTM protocol.
Overview of sFTMx on Beethoven X
sFTMx is a liquid-staked token that users receive when they stake FTM on the Beethoven X platform. The value of sFTMx naturally appreciates in relation to FTM thanks to native network staking rewards automatically compounded within the token. This token seamlessly integrates with other DeFi applications, enabling users to utilize it across various protocols, including DEXs and lending markets.
Staking and Unstaking
To stake, users simply need to head to the sFTMx page and select how much FTM they wish to deposit. Unstaking takes 7 days, in line with the unbounding period for staking on Fantom. It’s also worth noting that when unstaking an amount outside which is available in the free pool, a penalty will be incurred. This deduction is automatically reflected in the numbers displayed on the UI. The free pool is a dynamic reserve of “to-be-staked” FTM that allows penalty-free unstaking. The pool is made up of new staking deposits, maturities, and accrued rewards.
As an alternative to unstaking, users can swap out of sFTMx on DEXs by swapping their sFTMX for FTM on the Swap Page.
How does sFTMx unlock Fantom staking rewards?
The sFTMx token accrues staking rewards via delegating the underlying FTM to trustworthy validators on the network. Validators are curated based on safety (no slashing history, community engagement, track record), and performance (100% uptime). Chosen Validators are required to max-relock underlying FTM delegations to 365 days to maximize sFTMx APYs.
What is the sFTMX exchange rate and how does it change?
Beethoven X has inherited the sFTMx contract that’s exchange rate was initialized as 1 at the start of the contract. Every time staking rewards are added to the pool, the sFTMx exchange rate increases using the formula below:
At the time of writing, 1 sFTMx = 1.1115 FTM
What are the sFTMx fees?
Due to the management of underlying nodes, validators earn 15% of the overall FTM staking rewards. Beethoven X also takes a 10% protocol fee on the resultant rewards after the validator fees. The APY that is displayed on the UI is the APY the user receives (all fees have been subtracted automatically).
It’s worth noting that a portion of all Beethoven X sFTMX protocol fees will be redirected to maBEETS holders as gauge bounties. This means that maBEETS holders unlock a continuous source of “real yield” via LST management fees, swap fees, and all Yield Bearing fees on the DEX.
What are the risks of staking?
While Beethoven X has carefully selected and monitored validators, there exists a risk of one or more of the validators being slashed. To combat this, Beethoven X distributes staked FTM across multiple validators, minimizing the slashing impact arising from the actions of any individual validator.
Although the sFTMx code is thoroughly vetted and audited there is also always smart contract risk present. There always exists the possibility of malicious users exploiting a vulnerability or a bug in the contract
sFTMx &The Yield-Bearing Hub
With the addition of an LST to the Beets tech stack, Beethoven X is now positioned as THE yield-bearing hub of the Fantom blockchain. The Beethoven X DAO not only manages the dominant LST on the network but also the most efficient technology to host that LST.
These developments ignite an evolution of the Beethoven X platform and a revolution for the LST market on Fantom. The combination of yield-bearing stableswap tech, core pools, and sFTMx, also prime the DEXs to begin the transition to 100% yield-bearing liquidity with a self-sustaining incentive program.
Finally, for any external protocols looking to grow liquidity on Fantom, they can now supercharge growth with sFTMx liquidity pairing over traditional FTM.
Let’s break down why.
Yield-Bearing Native Technology
Balancer Technology has been designed specifically to adapt, account and efficiently scale Liquid Staked Tokens. With sFTMx now directly intertwined within this tech stack, Beethoven X is primed to truly showcase the power of YB liquidity on Fantom. The reason that Balancer / Beethoven X tech is so highly attuned for LST liquidity comes down to a few unique factors. The article below offers indepth analysis into these factors, for a high level overview, read on Ludwig.
In the realm of DeFi, traditional yield-bearing tokens often face a significant hurdle: liquidity pools suffer from the continuous siphoning of staking yields due to inaccurate swap pricing. Currently, almost all yield-bearing tokens utilize swap logic designed for assets directly correlated to one another 1:1. Evidently, this is not the case for LSTs or YB stablecoins. Balancer’s innovative solution, the Composable Stable Pool, tackles this head-on by integrating a Rate Provider contract.
Rather than trading at 1:1 (as a traditional stableswap would), upon every YB swap on the DEX, the rate provider plugs into onchain rates or pricing oracles that offer an aggregated and decentralized source for the current YB token ratio. This means that as the price of the token naturally rises, the pool continually accounts for it to ensure there isn’t constant arbitrage and LP loss due to the incorrect 1:1 pricing.
Additionally, the rate provider also unlocks the ability to take a fee on YB assets unlocking a revenue source purely as a function of how deep the liquidity in the pool is. This point is extremely important to understand — Unlike other DEXs in DeFi that are solely reliant on swap volume to generate fees, Balancer Technology (and BEETS) can generate revenue as a direct function of TVL. This unique mechanism paves the way for Core Pools — A liquidity growth flywheel that incentivizes liquidity around yield-bearing assets by redirecting LST yields back into the pool as BEETS incentives, effectively scaling incentive bounty ROI flywheels alongside TVL.
Core Pools
By intertwining core pools with sFTMx, external protocols unlock a unique source of liquidity growth. Instead of pairing native assets with FTM, DAOs can pair with sFTMx and harness a dynamic incentive model that leverages the inherent value of YB assets locked in its pools. Put simply, by pairing assets with sFTMx protocols can unlock a self-sustaining incentive program. To really supercharge this dynamic, protocols can enter the Beets Gauge Vote Market and bootstrap liquidity/TVL to ignite the incentive flywheel.
With tailored LST tech, sFTMx can now be used as the DEX’s base asset over FTM, unlocking wider and efficient swap paths through a central sFTMx/FTM pool.
Future Outlook
As a Fantom OG, Beethoven X has already cemented itself as an integral piece of Fantom technology and has some pretty impressive stats to back it.
- Peak of nearly $400 million TVL back in March 2022.
- Over $9.4 billion in cumulative Fantom volume
- maBEETS holders control DAO treasury valued over $3.6 million
- Year to-date Protocol Revenue: Beets emissions over 150%
- 128 DAO governance proposals
With the dominant DeFi technology layer now added to the stack, the Beethoven X DAO is primed to venture into a new realm of exploration within the Fantom network.
The next great symphony has been written, are you ready to hear it flourish?
