What is Shadow Staking?
Let’s first run through a quick reminder of what Shadow Staking is and how it works.
Shadow Staking allows SpaceSwap users to add liquidity to SpaceSwap pools without actually transferring it on the platform. Instead, you simply connect your wallet and enjoy passive income streaming in.
Shadow Staking advantages:
- Being able to avoid at least three extra steps
- Keeping the LP tokens stored in your wallet
- Zero dependence on gas fees and no waiting for the network to decongest
- No overpriced gas fees
How does the first version of Shadow Staking work?
There is a smart contract that contains basic information about the rewards generated by the back-end team, as well as some kind of checkpoints (block numbers) where the user performs some action. All this data is transposed into a special formula and the back-end formulates the value of the rewards given to users and uses a special signature for data verification.
The key point about this approach is that we can take these complex calculations outside the loaded networks and significantly reduce the gas required for transactions, resulting in users saving money. At the same time, proper security for the interaction between the back-end and the smart contracts is ensured. As an additional option, users do not need to transfer LP tokens to a contract.
Shadow Staking 2.0
We see the next steps in developing the project in integrating more projects into this motivation system that will allow to attract more users; expanding their motivational options; and adding more ways of using the funds pledged by users, i.e. highly profitable options with higher risks or less profitable options that aren’t risky at all.
An initial prototype of the architecture is presented below:
For an individual project or coin, a special configuration is created that simultaneously interacts with the smart contract and the back-end to configure its own pools. The configuration of the motivation system is performed by the back-end. The configuration of the coin pool (its purpose, the principle behind its LP token configuration, the derivatives familiar to the user, additional bonuses, etc.) is transferred to a special factory, creating a pool contract. All pool contracts have a general form but the configuration and additional logic of actions is moved outside the pool contract.
Farming Factory - motivating users
The Farming Factory is a set of motivational systems that transfers the configuration generated by the back-end to the corresponding list of configurations. This allows partners to set several motivation systems for one pool, instructing the pool to give out one or more rewards in order to motivate users. Depending on this, partners will be able to choose a strategy for calculating motivational bonuses. This strategy is formulated by the back-end. Based on data from the pools on user investments, the final value of bonuses is calculated.
Bottom Line
We see growing interest in our Shadow technology, not only from the users but other projects as well. We see the next steps for developing this solution as expanding the network of platforms that use it and to introduce a flexible motivational system for participants. The rest of the Shadow Staking technology’s functionality will be inherited from Shadow 1.0. But we can assure you that this is not all that’s coming - we will keep developing this technology according to the high interest we observe in the community.
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