Superfluid Staking is a feature native to the Osmosis zone on Cosmos. It allows OSMO holders to simultaneously use their tokens for staking and liquidity providing.
What is Superfluid Staking?
Superfluid staking is a concept native to the Osmosis zone. The Osmosis zone is part of the Cosmos ecosystem, which has attracted a lot of attention lately. Usually, when users stake their tokens on a zone, they cannot use them elsewhere because they lock them for a certain amount of time.
We use OSMO, which is the native token of the Osmosis zone, mostly for staking. We can also use it for liquidity mining rewards on the native AMM. Liquidity providers earn liquidity rewards in OSMO. They can then use these rewards to provide more liquidity or they can use them elsewhere. For example, they could stake these tokens to secure the Osmosis zone, which gives them even more rewards.
But what exactly is superfluid staking? Basically, it is a feature native to the Osmosis zone. In essence, Osmosis will let OSMO holders use their tokens for staking and liquidity providing at the same time. In addition, we will likely have many more DeFi use cases in the future.
The feature will launch in the next few months and has some significant advantages. Superfluid staking ensures that the protocol’s governance also serves the interests of liquidity providers. Because users can both provide liquidity and secure the network at the same time.
Osmosis is the first zone to introduce the concept. In addition to that, it incentivizes users to put their OSMO to work because they can earn rewards in two different ways simultaneously. This will likely lead to more OSMO being staked soon. It could also lead to more liquidity inside the OSMO liquidity pools.
For more information about Osmosis, check out our latest interview with Sunny Aggarwal on our YouTube channel: