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Every investment related research you do irrespective of whether it is in stocks, mutual funds, or even gold, you will likely come across one common advice – profit lies in holding the investment.
Now with 1 out 10 investors putting their money in cryptocurrency, the old adage around holding assets for long-term is getting extended to crypto enthusiasts as well. In many ways, even more so because when you consider the volatility of cryptocurrencies, buying and selling frequently can lead to investors losing out on a bad trade.
While it is true that holding DeFi for long-term can give out more returns, the reasons why investors put their money in cryptocurrencies are somewhat different than traditional investment models. A FOMO and gambling mindset that crypto investors typically act from while worked in the favor of the DeFi ecosystem earlier, has now started backfiring by adding more volatility into the space. The solution to this that the blockchain domain has found lies in DeFi staking platform development.
This article will give you a detailed insight into how to develop a DeFi staking platform, what feature-set to include, what security measures to take, and how much it costs to develop the platform.
However, before all this, let’s take a quick look at what DeFi staking is all about, what are its various types, and why at all you should think of investing in the platform.
DeFi staking is a process where crypto assets get locked in a smart contract. What investors get through this is rewards that often work as a passive income. Generally, the crypto assets which investors stake are non-fungible and fungible tokens while their rewards are interest that they earn by staking them.
For an easier understanding of the concept, you can see DeFi staking platform as a very high returns offering Fixed Deposit. Just like FD, you put x DeFi in the staking platform in return of which the platform gives you high return of interest.
As you build DeFi staking platform you will come across two types of staking activities that you can develop your model on –
In this case, the investors can lock their tokens in a DeFi protocol in return of interests that they get as yields. These protocols usually consist of borrowing and lending platforms like Aave or decentralized exchanges like SushiSwap and Uniswap.
Here, the crypto investors become liquidity providers by depositing funds in liquidity pools for providing liquidity to other users. The other users of the platform can take a loan or borrow from the deposited tokens on a decentralized exchange. The platform fees then get distributed to the liquidity providers in line with their ownership in the liquidity pool.
For more information on the subject, read our effective guide on How to build a DeFi yield farming app?
Now that we have looked into the basics of DeFi staking platform development on the front of the whats, let us get down to the whys. Why does the industry need to build a DeFi staking platform when standing today, 35% of the investors spend money in DeFi due to the fact that it excites them.
With the percent of investors treating cryptocurrency as a long-term growth model being as low as 18%, why should you as an entrepreneur put money in DeFi staking development? Well the answer to this lies in the advantages that come when you create a DeFi staking platform.
The reason why startups and enterprises are investing to build DeFi staking platforms spread across both them and their customers.
For the investors: The development of DeFi staking platform gives them greater yields compared to traditional banking models. Moreover, since they are able to hold the DeFi assets, it prevents them from market volatility in the long run.
For companies: When the tokenomics of the platform is well strategized, it attracts multiple users leading to the token appreciating in value. On the other hand, every transaction that the investors make is usually backed by handling charges that companies take.
Now that we have looked into the basics of what a DeFi staking platform does, let us get down to the details of how to make a DeFi ai platform – the answer to which typically lies in understanding the features set and tokenomics.
The success of DeFi staking development is decided by two crucial factors:
Let us dive into both the factors.
The features a DeFi staking platform carries decides users adoption rates and its ultimate success. With a number of platforms and DeFi exchange businesses offering the service, it is important to maintain a competitive edge. With that said, it is equally important to test the waters first by building an MVP of the DeFi staking platform.
The MVP features to consider when you build a DeFi staking platform will be a basic version of the application that will then be expanded into an advanced stage by adding in features.
The start of any application is with an easy onboarding process. Defi staking platforms are no different. The feature entails registering and KYC of the user followed by giving them an interface to buy crypto assets through multiple payment options.
2. Yield calculator
This feature tells the investors the approximate amount they will gain after locking in their crypto assets for a fixed lock-in period. Ideally, you should create a calculator where the investors are able to change the lock-in period, different amounts of crypto assets, and what the returns would look like.
3. Deposits and withdrawals
The investors should be given an easy interface for depositing crypto assets in the staking protocol. Likewise, it should be easy for them to withdraw the earnings at the time of payouts.
Appinventiv tip: at the time of yield withdrawals, give investors the option to re-invest in staking. This would keep them engaged in the application.
4. Crypto wallet integration
Crypto wallet forms a must-have feature when you create a DeFi staking platform. While we do not recommend creating a wallet at the MVP stage, you can create an integration with the top crypto wallet apps investors use. This will give them a place to store their crypto assets and the staking yields.
A strategized notification system informing investors of their yield growth, rate of interest in different assets, etc. can be immensely helpful when it comes to keeping them engaged in the application.
Investors should be given a dashboard view of their transactions – amount of crypto assets they have staked, their performance, and the details of the staking duration. While these make up for the MVP level features of DeFi staking platform development, here are some advanced features –
Now that we have looked at the features list on a high-level, let us drill it down on stakeholder basis. Typically, when we create a DeFi staking platform, we work on two modules – user and admin.
1. Asset staking – This facility of the application enables users to purchase assets, stake them, and collect rewards. It consists of elements like:
2. Asset unstaking –
Investors should be given an easy mode to withdraw the staked amount after paying the withdrawal charges and gas fees. The platform should also offer them a way to re-stake the profit in some other asset.
3. Medal pool –
The medal holders should be able to receive weekly distribution of shares from the pool. Who becomes a medal holder can be decided by their amount of investments in the crypto asset.
1. Access pools – The admin should be able to view all the pools in terms of rewards, estimated earnings made by the user, modify the reward setting, and update the staking setting of every pool.
2. Rewards management – The platform should give admin the ability to manage users and the rewards they are able to accumulate (alongwith the process of how they’ll be able to get the reward).
In addition to these, a special focus is paid on the security side of the DeFi staking platform. On the security front, we work through three phases – core, general and operational.
Core security – Here, an architecture is drawn that address issues around
General security – This part of the security measures work around the functioning of the application, such as –
Operational security – This section deals with ensuring that the foundation of the platform is secure.
Once you have decided on the features to build a DeFi staking platform, the next success-deciding factor comes into the surface – steps being followed by your DeFi staking platform development services provider.
While different development agencies work with different stages, at Appinventiv we start your dapps development services with setting the base of the protocol on an operational level and then go on to the design and development stages. Here are the stages we follow keeping the agile development approach at the center of development for an efficient, speedy delivery.
Tokenomics is a critical part of any crypto based blockchain project. It carries everything around the business logic right from token’s value and use, its creation and distribution, incentive mechanism, demand and supply; and the token burn schedules.
When we build tokenomics of your DeFi staking platform, we consider these points:
Let’s be honest. A majority of DeFi exchange platforms and staking apps come with a confusing, information-heavy interface with little to zero scope of personalization. When our designers work on a DeFi staking platform we focus on keeping a minimal interface with customizable widgets for users – giving them the ownership of their app screen in terms of information they want to interact with.
When we build a DeFi staking platform, we focus our development scope on smart contracts that manage payouts, tokenomics; crypto wallets development that would make it easy for investors to store their crypto asset and the yields, and the mobile, web platforms specific to three audiences – investors, staking platform company, and admin.
While in essence every blockchain app is supposed to be 100% secure as the data cannot be changed without general consensus, in reality the kind of DeFi staking apps being built today are not completely decentralized. Meaning, there is always a scope for data getting stored in the cloud, traditional KYC onboarding, and investors making bank transfers.
To prevent hacks through these routes, we follow a security-first development approach where every investor is given a private key and seed phrase while all the loopholes are identified and closed proactively.
Across every app – non-blockchain or blockchain application, the deployment process is more or less the same. The app will either be launched on the App Store and Play Store or will be integrated in existing software.
When it comes to DeFi staking platform development which relies on smart contracts, the maintenance part gets challenging as everytime a change is made in the app in terms of features or tokenomics, the smart contracts will have to be rewritten and integrated. At Appinventiv, we take care of the smart contract maintenance part as an element of our service offering.
Up until this point, we have looked into the different aspects of how to build a DeFi staking platform. The next aspect that you as an entrepreneur would be interested in knowing would be how long does it take to create a DeFi staking platform and the DeFi staking platform development costs.
The answer to both will depend entirely on the project scope – features you are looking to add, platforms you want to take the app on, level of personalization you wish to add, and the interface design. All of these elements together can add up your DeFi staking platform development costs to anywhere between $150,000 – $200,000. However, this range can be a lot less or more depending on the final scope we draft.
What we recommend is coming to us with your requirements and we will help you get on the DeFi staking platform journey, with clarity on the costs, development time, and multiple revenue models. Talk to us today.