Venus Protocol is thrilled to partner with a tremendous list of projects as part of our launch of Isolated Markets. Through a series of interviews, we invite you to learn more about each project and the value their users bring to our community. We encourage you to explore each of our partners and inquire about Isolated Markets on Venus Protocol. **

But what are Isolated Markets?

Isolated Markets open the door to creating isolated lending and borrowing pools with individual risk profiles and segregated risk for virtually any token on BNB Chain. This provides previously nonexistent use cases for these assets and will greatly expand the number of tokens available on Venus. Venus Protocol will now safely provide the ability to lend and borrow to the long tail of crypto assets.

Venus would like to thank pSTAKE Finance for partnering with us and taking the time to educate us all about their offering.

pSTAKE is a non-custodial liquid staking protocol that allows users to securely stake their PoS assets, participate in protocol improvements and security to earn staking rewards, and receive staked underlying representative tokens (stkASSETs), which can be used to explore additional yield opportunities across DeFi.

At present, pSTAKE supports Binance Chain (BNB), Cosmos (ATOM), Persistence (XPRT), and Ethereum (ETH) networks’ native tokens, with a view to supporting more chains and assets in the future (SOL, and AVAX).

Who is your target audience and how would you describe your typical user?

Liquid staking is envisioned to become the core layer of the PoS ecosystem. Anyone can liquid-stake their assets to earn sustainable yields while providing security to the underlying blockchain. The target users for pSTAKE are retail users, institutions as well as protocols like Helio who use liquid staking to bring more capital efficiency to DeFi. To fulfill this goal, we have made the pSTAKE liquid staking UX very easy to use so that any new user can come and stake their assets with us. We are also integrating the derivative tokens with all the major protocols in the ecosystem to bring the maximum utility to the derivate token.

In which category (Gaming, DeFI, Liquid Staking, Tron, etc) will your token reside, and what’s been happening in that space?

The stkBNB token will be available in the Liquid Staking category on Venus.

Liquid staking is quickly becoming one of the building blocks of the PoS ecosystem as it affords users the opportunity to earn sustainable yields while also providing security to the underlying chain. Users can use their stkBNB tokens in DeFi use cases like liquidity providing, borrowing lending, options, etc, earning additional yields based on their risk tolerance. Liquid staking is growing rapidly in the BNB chain ecosystem with increased user awareness and we expect the trend to continue as users look for sustainable returns in a tricky market.

What are some of the benefits of Staking BNB with pSTAKE?

Here are some of the differentiating factors:

• Zero staking barrier: Staking directly on the native chain requires a minimum of 1 BNB. However, with pSTAKE, this barrier is removed. Users can stake any non-zero amount of BNB on pSTAKE. The underlying staked BNB are then delegated to a trusted set of secure, high-yield generating validators to optimize user rewards.

• Instant liquidity & Flexibility: When unstaking their BNB, users have to wait for the 7-day unbonding period before the asset becomes liquid and ready-to-use. However, by staking their BNB via pSTAKE, users receive instant liquidity on their staking position in the form of stkBNB. pSTAKE’s stkBNB will have pools with BNB and other assets in the future, making it easy for users to swap their stkBNB for BNB at any time, thus bypassing the unbonding period and providing unparalleled flexibility.

• DeFi Opportunities & Higher Yield: With stkBNB, users have the opportunity to earn higher yields generated across integrated BNB Chain DeFi applications in addition to staking rewards versus only receiving one passive income stream from traditional staking.

• Auto-Compounding: With on-chain staking, rewards compounding isn’t available until the total accumulated rewards earned exceeds 1 BNB (i.e. the minimum stake amount). However, pSTAKE allows users to automatically compound their staking yields so that users continue to maximize their capital efficiency completely and seamlessly.

How is the whitelisted set of validators decided?

We want our users to earn high staking rewards without compromising on security. The pSTAKE team has optimized this by selecting the 10 top-performing validators on the BNB chain using criteria like APY, uptime, slashing incidents, etc. The set of validators will be continuously updated based on validator performance, and over time, we intend to move this to an on-chain automated validator scoring algorithm.

Have the stkBNB contracts been audited by professional auditing firms?

Protocol security is of the highest priority for pSTAKE. The stkBNB smart contracts have been audited by Peckshield and Halborn. The Certora team has written rules for formal verification of the most critical smart contracts for pSTAKE. pSTAKE has also set up bots for Forta for continuous on-chain monitoring of important events. On top of that, a bug bounty program with Immunefi is in progress to ensure that the protocol is safe from any possible exploits.

What projects are you currently planning on integrating within the BNB ecosystem?

stkBNB is integrated with the leading projects in the BNB chain ecosystem enabling all the major DeFi use cases -

Asset exchange - Wombat, Pancakeswap

Yield optimization - Alpaca, Beefy

Borrowing lending - Venus (launching soon), Midas

Margin trading - OpenLeverage

Options - Shield

stkBNB will also integrate with Helio to support a decentralized stablecoin. Thus, the stkBNB token will be usable in all the major DeFi use cases.

Can you describe a use case for how your users will take advantage of Isolated Markets on Venus Protocol?

Isolated Markets enable capital efficiency for liquid-staked token holders. Users will be able to borrow assets using their liquid staked tokens as collateral. They can borrow more BNB, which can be used to perform activities like asset exchange, options, etc. The BNB borrowed can also be converted into stables or other assets allowing the user to gain exposure to a variety of assets for the short term while still being able to maintain their exposure to stkBNB, and earn staking returns.

The isolated lending pool is also beneficial as it allows for only similar categories of assets enabling the customizability of interest rates. Thus, the borrowing rate model for BNB can be created such that it targets BNB staking returns at target efficiency, ensuring that the interest rates are most efficiently defined.

What value can your users find in using Isolated Markets on Venus Protocol?

Isolated Markest on Venus enables several borrowing use cases for pSTAKE users. Users can perform leveraged liquid staking where users can use their stkBNB as collateral to obtain more BNB and stake it again to leverage their position on stkBNB. Users can repeat this process multiple times to gain a much higher return than the base staking return on BNB chain.

In addition to leveraged liquid staking, users can also use the borrowed BNB to create a portfolio of assets based on their trading strategy, ensuring they get better capital efficiency through leverage on BNB.