The Decentralized Funding (DeFi) platform Tempus has announced a new method of staking for Ethereum 2.0 that allows users to access a fixed rate yield.
In one blog post On August 4, Tempus founder David Garai explained that users can leverage their existing exposure to ETH 2.0 variable staking returns, including the ability to earn a fixed return.
Tempus is an open source protocol that allows users to optimize their existing variable return exposure to better match their risk profile. He completed a $ 1.9 million funding round in mid-July.
Fixed returns for ETH staking
ETH, or the Lido stETH staking token, can be deposited into their smart contract with a certain expiration date. Tempus then divides the deposited ETH / stETH into Tokenized Master Tokens (TPS) and Yield Tokens (TYS). The system exchanges all TYS for TPS, and the user ends up owning only TPS, he explained.
Tokenized master tokens are “zero coupon bonds” that mature to a known principal amount that is fully collateralized by the currently deposited ETH. Tokenized yield tokens are zero coupon bonds that mature at an unknown amount of yield. The exchange rate between the two types of tokens represents the market’s implied future return.
“By swapping TYS for TPS, users reallocate the risk of interest rate fluctuations among themselves by swapping their Unknown Future Yield (TYS) for someone else’s principal (TPS).”
Users can hold the TPS to maturity, at which time the tokens are unlocked and redeemable for the underlying stETH at a 1: 1 ratio. Unlike staking on the actual beacon chain, users are not locked into their positions when using this method.
Garai said Tempus has received a grant from the Lido Ecosystem Grant Organization (LEGO) to integrate stETH into the protocol. He will launch the staking system in early September on testnet.
ETH 2.0 staking update
The actual amount currently wagered on ETH 2.0 is 6.7 million ETH according to Eth2 Launchpad dashboard. At current prices, this is valued at $ 18.1 billion and represents 5.7% of the total supply in circulation.
The annual percentage returns are currently 6% for those who staked directly, it will be reduced for those who use exchanges or staking services that take a cut.
Ethereum prices have continued to gain momentum over the past two weeks. At the time of going to press, ETH was trading at $ 2.628 after breaking above $ 2700 on August 4 for the first time since early June.
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