Introducing Meta Pool — enabling liquid staking on NEAR
NEAR is a Proof-of-Stake network. That means its security and construction on the chain rely on validators that lock up their NEAR tokens to participate in consensus.
This is in contrast with Proof-of-Work networks, where security and consensus are secured through computing power. Proof-of-Work often requires a lot of energy and, when done competitively, has a tendency to centralize over time (if you want to get really into that, I can recommend a post I wrote about oceanic games and bitcoin mining — it’s proper scientific research nerd territory — be warned. 🤓)
Proof-of-Stake facilitates accessibility and scalability as nodes don’t have to compete on computing power. An additional benefit is that PoS networks overall consume less energy.
There are a variety of ways to start staking. One of the most convenient (and least DeFi-native) ways is just to do it on a centralized exchange; obviously, then you don’t have control over your coins.
Alternatively, you can run a node on a network yourself and start staking that way. Or, if you want to have convenience, maintain custody, and not sustain an entire validator, you can use a staking protocol like Meta Pool.
Just a quick note, if you wanted to run a validator on NEAR you also would have to keep at least 67,000 $NEAR around to secure your spot. That’s probably a bit above your (definitely my) budget. 😆
What is Meta Pool?
Meta Pool is the leading liquid staking solution in the NEAR ecosystem. Typically, when staking your coins, it means that you cannot access them. On NEAR, the withdrawal window to unstake is up to 72 hours. So if you stake the traditional way, you earn an APY, but if you wanted out, you’d have to wait. You also give up on liquidity.
With Meta Pool, you have neither of those downsides. When staking your $NEAR in Meta pool, you receive stNEAR (staked NEAR) in return. stNEAR is a yield-bearing asset that accrues its value in every epoch (roughly 12 hours). That means you gain immediate liquidity with stNEAR tokens, which you can use across NEAR and Aurora’s DeFi ecosystem as collateral for borrowing or for farming.
Overall, with stNEAR you can increase the interest earned as you can earn it on two assets instead of just one.
How it works
When putting your funds in the Meta Pool protocol, they will be distributed to more than 70 validator nodes. These help further decentralize the NEAR network and increase security. Node operators benefit from receiving direct exposure to retail holders.
All interactions are managed through smart contracts. Funds are distributed and rebalanced consistently. Rebalancing considers parameters such as the % of funds staked with each validator and their overall performance.
Essential performance metrics are:
- sufficient tokens to secure a validator spot on NEAR (>67,000 $NEAR)
- and that the overall Nakamoto coefficient isn’t reduced.
The Nakamoto coefficient is a measure of how many subsystems of a blockchain have to be corrupted for the entire system to be corrupted. For staking the threshold for a network to be endangered is usually around 1/3 of all validating nodes. You can read more about it here.
One essential element of Meta Pool is its liquidity pool. Usually, unstaking funds requires users to wait between 48–72 hours. Yet on Meta Pool users can immediately unstake by paying a small fee. That fee averages around 0.3% of their stake.
The quick withdrawals are made possible by Meta Pool’s one-sided liquidity pool of stNEAR/NEAR. Since it’s a one-sided pool, users only have to provide $NEAR as an asset if they want to start liquidity mining. This carries the additional benefit of making impermanent redundant.
Whenever someone wants to unstake their tokens faster than the unstaking period, this withdrawal is facilitated by the liquidity pool.
Meta Pool has a native token called $META, which is rewarded to unstakers, and to users farming or participating in lending/borrowing with their stNEAR. Eventually, the token will form the basis for the Meta Pool DAO. The team believes that on-chain governance will be the way forward for it and is working towards it.
The maximum supply of $META is 1,000,000,000. 57% of the entire token supply are allocated to the community and treasury. So far, governance is still a work in progress, but once it’s live it will be using the token-weighted voting mechanism from Astro DAO. Since that hasn’t launched yet, neither has the voting for Meta Pool’s DAO.
If you feel like staking your NEAR, Meta Pool is worth a try. Currently, more than 8,3 million NEAR are locked in it, and it’s offering an annual yield of 10.31%; so you can beat inflation in some countries — given the NEAR price holds up 😼
All you need is some NEAR and a will to connect your wallet to the Meta Pool web app.
Happy Staking. ✨