Liquid Staking on Aptos Live in Pontem Wallet
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Tutorial: Earn up to 37% APR
Pontem Wallet has just added another native dApp integration: liquid staking on Ditto! Now, you can stake APT right in the wallet at 7% APR -- then deposit the resulting stAPT in liquidity pools on Liquidswap to earn up to 30% more in Ditto tokens. Read on to learn how!
What is liquid staking?
On Proof-of-Stake blockchains like Aptos, Ethereum (since the Merge), or Solana, users can become validators and approve transactions by staking tokens. But this can be a difficult and expensive task. Many users choose to delegate their coins to other validators to lighten their responsibility and share in their PoS rewards. See our detailed report for more on how Proof-of-Stake works.
The problem is that while your coins are staked, you are unable to use them for other profitable DeFi opportunities, such as yield farming and lending. Liquid staking is the answer: you can stake coins to earn the PoS rewards, and also get special liquid staking tokens in return, which can be deposited in various DeFi instruments. Check out Pontem’s deep dive into liquid staking to learn more.
Liquid staking is one of the biggest DeFi categories: its overall TVL once touched $25 billion.
The biggest liquid staking protocol is Lido Finance. It supports Ethereum, Solana, Polygon, Polkadot, Kusama, and Terra Classic, and at its peak held almost $21 billion in staked assets. Ankr, Parallel DeFi, Stader, and Solana’s Marinade Finance are other well-known players.
Of course, the booming Aptos ecosystem has its own liquid staking dApps, too. Pontem Wallet is integrated with two of them: Ditto Finance and Tortuga Finance. Both are audited: it’s our policy to only partner with audited dApps and list only audited tokens on Liquidswap. At Pontem, user safety comes first!
About Ditto Finance
Ditto is one of the first liquid staking dApps on Aptos. When staking APT, you receive special stAPT tokens in return, which have almost the same price as APT.
The APT you stake is delegated to Ditto’s validators who run full nodes on Aptos. The more validators there are, the more secure and decentralized the network. By staking, you contribute to the stability of Aptos as a whole.
The standard Proof-of-Stake reward rate is 7% APR, and it is compounded with time. Additionally, Ditto offers opportunities to earn farming rewards in its DTO Discount Tokens. This is a special token that will allow you to buy DTO (the governance and utility token of the protocol) at a 50% discount once it’s released. ($0.025 per token instead of $0.05.)
For example, if you earn 1000 DTO Discount tokens, you’ll be able to buy 100 DTO for $25 (1000*$0.025) instead of $50 (1000*$0.05).
You can deposit stAPT in various pools on Liquidswap to earn between 25% and 31% as of January 7, 2023. Note that these reward rates fluctuate constantly.
Ditto’s goal is for stAPT to become one of the key assets in Aptos DeFi, accepted by a wide range of protocols. Ditto has been audited by OtterSec (see report here),an authority in Move smart contract security. (OtterSec has also audited Pontem Wallet.)
What’s a native Pontem dApp?
Pontem Wallet was the first wallet for Aptos to integrate native dApps, which you can use right within the wallet, instead of having to connect to a dApp’s website. So far, we have two:
- Ditto Liquid Staking: easily stake APT to get stAPT or unstake to claim your APT back.
- Topaz NFT Marketplace: browse the top 20 collections on Topaz and buy NFTs in just a few clicks,including Pontem’s own Space Pirates.
We are working on adding more native dApps, including Liquidswap. Our goal is for Pontem Wallet to become the Aptos super app, so stay tuned for frequent updates.
Tutorial: Using Aptos liquid staking in Pontem WalletIn-wallet staking
- Open the dApps tab in Pontem wallet. Click on Stake Aptos in the Native dApps section.
- Click Stake, then enter the amount of APT you’d like to deposit in liquid staking. Note that you don’t need to be connected to the Ditto dApp. It all happens within the wallet.
The Ditto dApp will display the amount of stAPT (liquid staked APT) that you’ll get in return. Note that the exchange rate fluctuates around 1.01, but as rewards on stAPT keep compounding, it could eventually be worth more. (This is not financial advice.)
- Click Stake, then confirm the operation and the gas fee. If stAPT isn’t registered in your wallet yet, it will be registered as part of the same transaction. That’s because, on Aptos, you have to approve an asset before you can interact with it for security reasons. Note that the fee here is less than 0.002 APT, about $0.01.
- After the transaction is confirmed on the blockchain, you should see stAPT in your wallet’s asset list.
You’ll also see your liquid staking position in the Ditto native dApp section.
From this point forward, your stake will slowly accumulate rewards in APT. But if you want to withdraw the stake for APT at any point, it’s easy.
- In the Ditto native dApp section, click on Unstake. Enter the amount of stAPT that you want to convert back into APT.
Note that the default option is Immediate Unstake. It carries a small penalty (In this example, you’ll get 2.956 APT of the 3 APT that you originally deposited), but you’ll have immediate use of the money. In the future, Ditto will also offer an alternative option: delayed unstake over up to 30 days without any fee.
- Click Unstake and confirm the transaction and fee. In a few seconds, the APT will appear to the wallet balance.
However, there is a good reason to keep APT staked: the lucrative farming opportunities brought to you by Ditto Finance and Liquidswap. Let’s see how to make stAPT work for you.
How to earn up to 30% extra APR with Ditto and Liquidswap
- Connect Pontem Wallet tostake.dittofinance.io and go to the Rewards tab.
As of January 2023, Ditto offers 4 liquidity mining pools:
- Simple stAPT staking at 16% APR;
- stAPT-APT stable pool on Liquidswap at 25.43% APR;
- stAPT-USDC liquidity pool on Liquidswap at 30.19% APR;
- stAPT-USDC pool on PancakeSwap at 31.28% APR.
This list is for informational purposes only, as the APRs fluctuate with the amount of liquidity in the pools. New pools could also be offered in the future. Generally in yield farming, if you allocate the same amount of rewards to two different pools, the more crowded one (with a higher TVL) will have a lower APR; the same pie is effectively divided among more eaters.
Important: DTO Discount Token is volatile, so the final APR in USDT equivalent can differ significantly from the nominal APR. This goes for most yield farming pools in the market, though.
2) For this example, we’ll pick the stAPT-APT pool. First, we’ll need to get some stAPT-APT LP tokens, so go to the Pools section on Liquidswap.
3) Locate stAPT on the list of assets using Search.
4) Enter the amount of stAPT you want to deposit. Here we’ve entered close to the maximum amount held in the wallet. The other field will show how much APT you need to add. Remember that you always need to deposit both tokens in equivalent amounts.
Another thing to note is that the Stable curve is used for these swaps. That’s because stAPT and APT are correlated assets;the price of the former follows the price of the latter. The same happens with assets like USDT and USDC, BTC and WBTC, etc.
Having a special curve for stable pairs allows Liquidswasp to minimize slippage, even for large swaps. This is a big advantage of Liquidswap over other decentralized exchanges.
Also note that the amount of APT corresponding to 2.97 stAPT isn’t 3, but rather 3.73. That’s because the relative price of stAPT on Liquidswap is determined by the token ratios in the pool and is independent from the price in the Ditto app.
This leads to an interesting conclusion: sometimes, instead of unstaking, it can be better to swap the liquid staking token for APT on Liquidswap. Make sure to check the relative prices first, as well as the gas fee (which can be markedly higher for a stable swap).
5) Confirm the transaction. Note how Pontem Wallet will warn you that you are about to give away APT and stAPT and get around 326 APT-stAPT LP tokens. These LP tokens are proof that you own a small share of the liquidity pool.
Confirm and wait for the transaction to be processed. You’ll see the LP tokens on the asset list.
Now, you’re a liquidity provider and ready to take advantage of farming opportunities on Ditto. In addition, you’ll be earning a passive income from trading fees on Liquidswap: two birds with one stone!
6) Back on the Rewards page in the Ditto dApp, you’ll see that the stAPT-APT window now displays your balance of LP tokens. Enter an amount in the field or click Max, then click Stake. Confirm in Pontem Wallet.
7) Now toggle the Rewards section to Unstake. You should see your farming position under Staked in small type. You’ll also note that the DTO Discount Token counter is moving as you start accumulating rewards. Remember that until the ‘real’ DTO is released, DTO Discount tokens won’t be redeemable.
8) If you want to unstake the LPs, enter an amount in the field or click Max, then on Unstake. Confirm in the wallet.
Your accumulated DTO Discount token balance won’t disappear, but you won’t be able to claim it until the DTO Token Generation Event (TGE).
Reminder: You can also use Pontem Wallet with Ledger. So you could connect your Ledger device to Pontem and then do everything we’ve described in this tutorial straight from the hardware wallet. Get more details in our Aptos + Ledger Tutorial.
Liquid staking is an easy and attractive DeFi opportunity thanks to the integration of Pontem Wallet and Ditto Finance. Go try it for yourself, and please let us know if you encounter any bugs or UI/UX issues. And follow Pontem on Twitter, Discord, and Telegram for more exciting integration news.
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