A PoS blockchain and decentralized exchanges vie for the same resource. But a new feature which is native to Osmosis on Cosmos is designed to help users use the tokens they have in a new way. They can use tokens to stake and provide liquidity at the same time. Osmosis Labs is a developer who offered the first servicing project for DEX. It is connected through the IBC or Interblockchain Communication Protocol and recently made an announcement. The news was about the launch of a new feature called Superfluid Staking.
What can this new feature do? It works on the DEX interchain to unlock chances for people to earn dual incomes. How? By using staked assets that support the stability and security of the blockchain to become liquid and then used.
Limited Partners or LPs are people who choose to lock their assets in a liquidity pool offered by Osmosis. They then accrue fees and incentives for liquidity mining by facilitating trading in a pool. Due to the introduction of this new feature, LPs can now stake their bonded shares using a validator. They earn a part of the staking APR via Osmosis. This is above the APR they would earn by just leaving their bonded shares in the liquidity pool.
What makes the new feature on Osmosis interesting is that there is no need to create a synthetic representation of a staked asset. Unlike in liquid staking done on a normal basis, the implication is that tokens staked are already in use on a Defi. Considering that Osmosis is 10th on the TVL chain, it is home to just one protocol.
The launching of Superfluid Staking is the culmination of a simple and powerful insight. Providing liquidity means locking up tokens – the same is true when staking is done. Superfluid Staking helps people earn higher rewards by using them in two ways and having liquidity.
