Staked IPPrice

(STIP)

Staked IP, commonly referred to as STIP or stIP, is a liquid staking token (LST) that represents a user’s staked position within the Story Protocol network. It serves as a receipt for staked native assets, allowing users to accrue staking rewards while maintaining the ability to use their assets in decentralized finance applications. STIP is issued by liquid staking providers operating on the Story Network, offering a flexible alternative to traditional staking where assets are typically locked.

IP is the native Layer 1 utility token of Story Protocol, essential for paying gas fees, participating in governance, and securing the network through staking. However, when IP is staked directly, it becomes illiquid. STIP is a derivative token that provides liquidity to those staked positions. While IP is the base asset, STIP is an interest-bearing version that can be traded or used as collateral on various platforms without requiring the user to wait for a lengthy unbonding period.

STIP is designed as an interest-bearing token rather than a rebasing one. This means that instead of seeing the number of tokens in your wallet increase, the value of each STIP token grows relative to the native IP token over time. As staking rewards are earned by the underlying validators on the Story Protocol network, they are added to the staking pool, which increases the exchange rate between STIP and IP. Rewards are typically updated periodically as they accrue from the network.

There are generally two methods to convert STIP back into IP. The first is direct unstaking through a staking platform’s dashboard, which involves a 'Delayed Unstake' process. This method requires waiting for a network unbonding period, often around 14 days, before the IP can be claimed. The second method is an 'Instant Swap,' where users sell their STIP for IP or Wrapped IP (WIP) on decentralized exchanges. While faster, swaps may involve small fees or market-driven price differences.

STIP is a central asset in the emerging IPFi economy. It provides utility beyond simple staking by allowing users to participate in various DeFi activities. Users can provide liquidity to STIP trading pools on decentralized exchanges to earn a share of transaction fees. Additionally, STIP can be used as collateral to borrow other assets or stablecoins. It also enables participation in decentralized governance, allowing holders to influence the direction of the staking protocols they utilize.

Holding STIP involves certain risks common to liquid staking. One is 'Slashing,' where a portion of the staked IP could be lost if the validators backing the pool behave maliciously or experience extended downtime. There is also smart contract risk, as STIP relies on code that could have vulnerabilities, though providers typically undergo security audits to mitigate this. Finally, market volatility can lead to 'depegging,' where the market price of STIP on an exchange may temporarily drop below its underlying value.