Algem is a mobile application for liquid staking of DeFi based on the Astar network, offering new ways for users and ASTR holders to earn more. Algem is developed based on two main features, offering different solutions for users to maintain the liquidity of their assets: liquid staking and yield farming.
- Liquid Staking at Algem
- The Principle of ASTR Liquid Staking
- How Liquid Lending Works
- Description of nASTR Farming
Liquid Staking at Algem
Liquid Staking is the most profitable way to earn on the Astar Network and Polkadot. Users can receive one liquid token nASTR for every staked ASTR token. They can then use nASTR for farming to maximize their profits.
The liquid staking feature is the first and main feature of the Algem protocol, using it on the Astar network. This solution allows for earning staking rewards in dApp and increasing income using tradable liquid nASTR tokens. The goal of Liquid staking is to solve issues such as liquidity and efficient use of funds. Users constantly face the choice of staking in the protocol or farming/mining liquidity in dApp. And this solution allows users to simultaneously reap the benefits of both methods. With the new version 1.5 of Algem's Liquid staking feature, it applies the philosophy of dApp staking more broadly, supporting multipools and allowing users to decide in which project they would like to use their tokens.
The Principle of ASTR Liquid Staking
When users stake their ASTR tokens in Algem, they receive nASTR tokens in return at a 1:1 ratio. The staked ASTR tokens are delegated by Algem's smart contracts directly into the Astar network pool and begin earning rewards. Algem collects these rewards and distributes them among users based on the balance of nASTR in their wallets, subtracting a small fee.
In addition, users can request rewards on Algem after each new cycle. With this feature, ASTR holders can choose the dApp they want to use, thereby supporting staking. When a user decides to stake their ASTR tokens in one of the available dApps, Algem's smart contracts directly transfer the ASTR tokens into the Astar network dApp staking and stake them on the corresponding dApp. Thus, Algem supports and shares the vision of the Astar Network in creating a sustainable ecosystem where dApps and users cooperate and support each other for the benefit of the ecosystem.
How Liquid Lending Works
Liquid Lending is the second and most important feature of Algem, offering a new concept and service to the entire decentralized finance (DeFi) industry. Algem's solution allows users to continue earning lending or farming rewards and increase their income with ALGM incentives by using tradable liquid nASTR tokens. Liquid Lending uses the same mechanisms as Liquid staking, but instead of interacting only with decentralized applications (dApp) staking of Astar, it is directly connected to other dApp protocols within the Astar network.
Users can provide and lend their tokens to dApp protocols through Algem and receive nASTR tokens representing their lending position. Through Algem, ASTR holders can provide or lend their tokens to lending or staking platforms, stablecoin projects, decentralized exchanges, or other DeFi protocols. Users can choose options with different durations (100/200/300 days) and ALGM incentives.
Description of nASTR Farming
nASTR Farming is a group of intermediate contracts that allow nASTR holders to interact with other protocols to redeem their nASTR tokens directly on Algem. The nASTR farming contracts receive $nASTR tokens and then transmit actions to the chosen protocol. Once locked in the contract, the balance cannot be changed until liquidity is removed. Users can transfer tokens into the nASTR farming contract in a single transaction and avoid having to switch to different websites to use different DeFi protocols. Using nASTR Farming directly on Algem, nASTR holders can:
- Provide nASTR liquidity and stake LP tokens on AMM-standard and stable protocols.
- Lend nASTR tokens on loan and collateral platforms.
- Request and receive farming rewards.
What are the benefits of nASTR Farming:
|Protection from flash loan attacks through buffered implementation
|There are several scenarios where staking rewards can be increased reversibly with LP tokens. For example, a user might use a flash loan to request rewards, thereby receiving significantly more by returning the LP tokens at the end of the transaction. This risk will increase in the future as more DeFi dApps offer flash loan services.
|Protection from LP manipulation
|Some bots may monitor the transaction pool and move tokens between their accounts in an attempt to artificially increase the reward amount.
|Enhanced user experience
|Users no longer need to visit multiple websites to add their tokens to additional dApps; fewer actions are required for the entire process of depositing and withdrawing tokens; users can see all balances in one place; in the future, they will be able to choose a DEX for interaction and view statistics through Algem directly.
|More accurate calculation of rewards and increased platform security for users.
|Protection against the possibility of unloading funds from the LP provider contract or its bankruptcy.
|Support for a larger number of protocols
|Not all dApps can support $nASTR for technical reasons. These include such dApps as AstridDAO and Arthswap, important for the Astar ecosystem.
nASTR is a liquid staking token from Algem. It allows users to remain liquid with their ASTR tokens and earn additional rewards in the DeFi ecosystem of the Astar network.
The ASTR/nASTR pair on DEX aims to remain equal, but the market may decide otherwise. However, to keep the ratio as close to 1:1 as possible, holders of nASTR or ASTR can take advantage of arbitrage opportunities and earn more while maintaining the stability of the pair. If the ASTR/nASTR ratio decreases from 1, traders can sell their nASTR tokens for ASTR tokens and stake them back on Algem. As a result, they will receive more nASTR than before the operation.
If the ASTR/nASTR ratio increases from 1, traders can buy nASTR tokens using ASTR tokens and cancel staking on Algem using the standard staking cancellation or the instant cancellation option. In this case, they will receive more ASTR than before the operation.
ALGM is the native and managing marker of the Algem protocol, playing a central role in the platform's reward and voting system. Following the values of the Astar Network, the team decided not to make any of the governance tokens available for sale to the community. Algem believes that it is best to distribute the token only among users and supporters of the project.