The change comes after 18 Polkadot Para chain auctions were secured on the original SALP protocol.
On Friday, Bifrost, a Web 3.0 derivatives protocol that delivers decentralized cross-chain liquidity for staked assets, launched the updated Slot Liquidity Auction Protocol called “SALP 2.0.” Projects such as Moonbeam, Unique network, OAK network, Polkadex, etc., apprehended their Para chain crowd loans on Kusama and Polkadot via the original SALP. A total of 8,834,746 vsKSM ($439 million) and 3,045,564 vsDOT ($21 million) was cast through the protocol.
The SALP protocol liberates the liquidity of tokens staked during an auction; liquid derivatives such as vsDOT and vsKSM are distributed on a 1:1 basis for the tokens staked. Both vsDOT and vsKSM can be used for decentralized finance, or DeFi, applications, and recompenses throughout the ecosystem as long as the native tokens remain locked for the period of the para chain lease.
This dodges the opportunity cost of locking their coins. Though, the new SALP 2.0 allows users to obtain liquid tokens via direct investment, not just via crowd loan participation. Tyrone Pan, head of development at Bifrost, remarked:
“The upgrading of SALP 2.0 is generating a Bond market for Crowdloan assets, improving the efficiency of vsToken & vsBond liquidity while lowering the threshold for users. This model not only facilitates Crowdloan users to manage derivatives but also cleverly combines Crowdloan with DeFi.”
Liquid staking is a comparatively new phenomenon in the DeFi dominion, mostly born to let users recover potential opportunity costs while staking their assets. The probable downside is their weakness to the changes in underlying assets as they are classified as DeFi byproducts.
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