OPRR Flash Depth Activities

Search Extension

APE initiates staking rewards, how to choose the participating platform?

JamesX

2022-12-12 12:34

Read this article in 22 Minutes

AI summary

View the summary

Original Title: "How to Choose Among ParaSpace, BendDAO, and Binance NFT, Which Offer APY 1000%+ Ape Staking Mining?"

Original Source: JamesX (Twitter: @0xJamesXXX)

Yuga Labs has partnered with Horizen Labs to officially launch the ApeStake.io website on December 5th, and has also started the pre-staking phase of Ape Staking for one week. The official Ape token staking incentive will start to be distributed on December 12th, and based on the current pre-staking data (as of December 8th), the expected APY yield is over 1000%.

Although there are still a few days before the official start of mining, and the expected APY yield will decrease after more APE tokens and BAYC/MAYC/BAKC series NFTs participate in staking, Ape Staking is an investment opportunity that investors and NFT collectors cannot afford to miss.

So this article will detail the official rules of Ape Staking and the risk considerations for participation, as well as compare the staking rules and expected returns of three third-party Ape Staking platforms (ParaSpace, BendDAO, Binance NFT), in order to help you make the most rational decision based on your own situation.

ApeStake.io Official Staking

Ape Staking's earliest proposal, AIP 4&5, was rejected by the community vote. After extensive community discussion, the activity rules for Ape Staking were finally formed and preparations began with the passage of AIP 21&22.

The following chart shows the quarterly release of APE token incentives for the three-year Ape Staking event. It can be seen that early participants can receive more APE token incentives and higher expected returns.

The participation form of APE Staking is divided into 4 independent staking pools: APE token staking pool, BAYC pool, MAYC pool, and BAKC pairing pool. In the Ape token staking pool, any amount of APE tokens can be staked directly, so the participant's earnings depend on the proportion of APE tokens invested in the total pool. In the BAYC and MAYC staking pools, NFTs are more like containers for holding APE tokens, and APE tokens need to be paired with them to participate in APE Staking mining. The mining share is determined by the number of paired APE tokens, and each NFT has a paired APE token limit. BAKC must be paired with a BAYC/MAYC before participating in staking with APE tokens. Please refer to the following figure for the specific APE token mortgage limit and APE token release amount for each asset pool.

Note: If you choose to participate in the staking and mining activities through ApeStake.io directly, please note that if you sell the corresponding Ape NFT during the staking period, you will lose all the paired staked Ape tokens. Therefore, please remember to unstake the Ape NFT and recover all the staked Ape tokens before the transaction occurs to prevent attacks from arbitrageurs.

Here is an introduction to the rules of participating in Ape Staking through official channels. Please note that the prerequisite for this is that you must have both BAYC/MAYC/BAKC NFTs and the corresponding limit of APE tokens to achieve the highest expected yield. If you only have the corresponding NFT or APE, or if you want to obtain higher expected yield and more liquidity, you have three better options: ParaSpace, BendDAO, and Binance NFT.

ParaSpace

ParaSpace is a relatively unknown name in the NFT lending market, but it is a new player. However, its sister project, Parallel Finance, which is the largest lending protocol in the Polkadot ecosystem, is well-known. The development team is also Para Labs.

Para Labs' first exploration of multi-chain deployment and multi-market layout is ParaSpace - an innovative NFT lending platform based on the Ethereum ecosystem. This strategic layout is somewhat similar to Uniswap Labs' recent entry into the NFT trading market. As the first battle to open the Ethereum NFT lending market, the ParaSpace team also developed a complete set of products for Ape Staking, and opened an additional 30% APY mining reward for APE tokens during the pre-staking phase to encourage early user participation.

ParaSpace Ape Staking, like BendDAO analyzed below, is based on NFT collateral lending as its platform's basic logic. With the mechanism of Ape Staking, NFT holders can obtain additional liquidity funds through collateral lending while participating in Ape Staking liquidity mining to continuously receive APE token mining rewards. However, ParaSpace has adopted an innovative Peer-to-Pool model, greatly improving capital utilization efficiency.

First of all, Ape NFT holders can borrow the required paired APE tokens from the APE lending pool and pair them with their NFT without having to find a specific APE token holder to pledge and pair with, greatly reducing market friction, after pledging their NFT on the ParaSpace platform. At the same time, APE token holders only need to deposit their APE tokens into the ParaSpace lending pool to receive APE Staking incentives in the form of borrowing rates.

APE Staking paired mining in the form of NFT lending carries the risk of Ape NFT liquidation, but ParaSpace has cleverly solved this problem. First of all, the price of APE token is strongly correlated with the floor price of Ape NFT, so the liquidation risk is lower than the NFT mortgage lending ETH model. At the same time, in extreme cases, when the liquidation process is about to start, ParaSpace will automatically redeem the pledged Ape NFT, but will deduct the necessary part from its Staking reward to ensure the solvency of APE token lending, and Ape NFT itself will not really enter the liquidation auction process.

（ParaSpace Twitter）

In addition, regarding the pledge period mentioned in the previous section, if the Ape NFT is sold, the original holder will also risk losing the paired APE tokens. ParaSpace has also developed smart contracts to mitigate this risk. Any Ape NFT mined through ParaSpace's pledge mining, if there is a transaction during the pledge period, ParaSpace will automatically release the pledge and return all Ape tokens before the Transfer occurs. This fundamentally eliminates the occurrence of this bug in the official mechanism and ensures the security of its APE lending pool.

Regarding the aspect of contract security that users are most concerned about, although ParaSpace is a brand new NFT lending platform with a new contract developed for Ape Staking, its contract has already undergone security audits by 0xQuit, Certik, trailofbits, and secure3io. In addition, several other top security audit companies are also conducting final stage security reviews, including SlowMist, VeridiseInc, and Quantstamp.

For users who want to participate in Ape Staking directly but are restricted by their geographical location on ApeStake.io, ParaSpace has developed a front-end interface (https://usape.para.space/) that interacts directly with the official Staking contract, making it easier for restricted users to use.

BendDAO

BendDAO is not unfamiliar to most NFT blue-chip players in the encryption industry. It has been running smoothly for nearly 9 months. During this period, BendDAO also experienced the problem of liquidation of many NFTs due to the drastic fluctuations in blue-chip NFT prices. Recently, it has also been questioned by the industry whether it will become the culprit of the death spiral of blue-chip NFT prices and its ability to solve bad debts. However, with the continuous iteration and upgrading of the product, as well as efforts to modify important parameters through community proposal decisions, BendDAO has proven its leading position in the NFTFi field with data and time. Therefore, in the Ape Staking event, BendDAO is also a very important third-party participating platform.

BendDAO's plan for supporting Ape Staking began with a community proposal, and was later approved through another proposal vote, setting BendDAO's APE Staking protocol fee at 4%. This can be considered a benchmark case for DAO governance in the NFTFi industry.

BendDAO's Ape Staking product design philosophy differs from ParaSpace's Peer-to-Pool logic, instead adopting a Peer-to-Peer model that offers users greater flexibility. When each BAYC/MAYC is deposited into the BendApe Staking platform, NFT holders are free to set several parameters.

1, Ape NFT, APE token, and the percentage of total APE token rewards that each role in the BAKC paired staking program receives.

2, APE token staking requirements.

For holders of APE tokens, they can choose to stake any Ape NFT pair, but the most important decision will undoubtedly be based on the reward distribution ratio set by the Ape NFT holder in advance.

This is the Peer-to-Peer pairing mining model of BendDAO, which gives users maximum freedom, but also brings some problems with high pairing friction, such as the setting of reward allocation ratio. If the profit-sharing ratio of APE token staking is set high, it is likely to ensure sufficient APE tokens participating in pairing staking, but the profit received by Ape NFT holders may not be as good as the expected return rate of other platforms; if the profit-sharing ratio of APE token staking is set low, it may also result in the situation where no APE tokens are willing to pair with Ape NFT for staking. Therefore, it is highly likely that after the Ape Staking activity officially starts, Ape NFT holders will continuously redeem and adjust the reward allocation ratio based on the expected return rate of other platforms, making it difficult for users of different roles to obtain long-term stable returns.

Binance NFT

Centralized exchanges have also found their entry point in Ape Staking activities. Binance NFT announced on December 6th that it will launch the Ape NFT staking activity on December 12th.

The rules of the activity can be said to be the simplest and most direct in these Ape Staking projects. Users only need to stake BAYC and MAYC NFTs on the Binance NFT platform to receive daily APE token mining rewards. This provides a centralized staking service for Ape NFT holders, and users do not need to worry about the pairing staking rules of APE tokens to earn profits in the Ape Staking activity.

Users can choose to pledge BAYC or MAYC NFTs in the form of current or fixed-term deposits of 30, 60, or 90 days. Although the official announcement does not mention the difference in yield between different pledge periods, it can be expected that longer fixed-term deposits should correspond to higher expected yields.

It is worth noting that after the pledge starts, if the user wants to retrieve the pledged Ape NFT, the official announcement reminds that the redemption process for current pledge will take 48 hours, and the process for early redemption of fixed-term pledge will last for 7 days, and the APE mining income of these 7 days will be lost. This is not a user-friendly pledge redemption mechanism for the highly volatile NFT market. At the same time, compared with the "DeFi" form of ParaSpace and BendDAO, where all processes are carried out through smart contracts and are protected by numerous audit reports, the centralized pledge mechanism of Binance NFT also has certain risks of centralized operations. However, Ape NFT holders can also use official channels to query their own BAYC/MAYC participation in the pledge through on-chain data at any time.

Binance NFT has not yet announced its specific profit model and revenue expectations, including how to pair with APE tokens to participate in Ape Staking pledge (the source of these APE tokens should be Binance Earn's APE Staking activity), and how much profit will be shared from it, all of which are still unknown. Therefore, the specific staking yield can only be compared directly by users after the official launch of the activity on December 12th, and they can make their own decisions. However, the estimated yield at that time should be higher than the official pure NFT staking yield, but lower than the NFT + APE token pairing yield.

Summary

For the convenience of everyone to directly compare the four Ape Staking platforms mentioned above, I have created the following table for your reference.

Despite the mixed reviews from both NFT users and token holders in the Ape Staking event design, as a DeFi researcher, I am pleased to see more NFT native projects incorporating DeFi strategies, including the recent Art Gobblers project which drew inspiration from the (3,3) model of DeFi project OlympusDAO.

At the same time, the NFTFi track is even more so: LooksRare and X2Y2, where trading is mining, upgraded to Listing + Bid, which is "mining" blind boxes on Blur.io, and ParaSpace, BendDAO, and JPEG'd, which have excess collateral lending as the underlying logic of their products. These projects provide huge support for the underlying liquidity of the NFT track and improve the overall capital utilization efficiency.

Believe that with the continuous exploration of the token economic model in the entire NFT ecosystem, as well as the continuous efforts of builders in the NFTFi track and the mechanism innovation combined with the characteristics of NFT itself, we will soon harvest more attractive PFP series, RWA on-chain investment opportunities carried by NFT, customized financial bills, etc. NFT will definitely play a more important role in the future on-chain financial system.