The Staking & DeFi glossary with StakeHound is part of NEM’s next step into DeFi as we continue to strengthen our network and look to increase accessibility to the XEM token.
If you would like to suggest other terms to be added to our glossary, please submit them through our NEM Hub open task.
Decentralized finance (often called DeFi or open finance) refers to the economic paradigm shift enabled by decentralized technologies, particularly blockchain networks. DeFi represents a shift from a centralized and closed financial system to a universally accessible economy that is based on open protocols that are interoperable, programmable, and composable.
Institution or party who holds the asset. In the case of stakedXEM, this role is played by Copper, which is based in the UK and regulated by the FSA. Custodians such as Copper hold the keys to mint tokens.
The availability of liquid assets to a company or market. An asset is considered more liquid if it can easily be converted into cash. The harder the ability to turn an asset into cash the more illiquid the asset. For example, stocks are considered relatively liquid assets as they can be easily converted to cash while real estate is considered an illiquid asset. The liquidity of an asset affects its risk potential and market price.
Proof of Stake
An alternative consensus protocol, in which an individual or "validator" uses their own cryptocurrency to validate transactions or blocks. Validators "stake" their cryptocurrency, such as ether, on whichever transactions they choose to validate. If the individual validates a block (group of transactions) correctly then the individual receives a reward. Typically, if a validator verifies an incorrect transaction then they lose the cryptocurrency that they staked. Proof of Stake requires a less amount of computing power compared to Proof of Work consensus.
StakeHound is a Swiss based company that aims to bring staking and DeFi together. StakeHound issues ERC-20 one-on-one representations of all major PoS tokens known as stakedTokens and stakes the original ones distributing the rewards directly to the users. StakeHound works with reputable and regulated third parties in order to ensure high security and reliability of the entire stakedTokens infrastructure.
In a blockchain network that is built using Proof of Stake (PoS), token owners create blocks and receive block rewards by "staking" their tokens to process transactions.
An alternative blockchain developers use to test applications in a near-live environment.
Is a cryptocurrency exchange run entirely on smart contracts, letting you trade popular tokens directly from your wallet. Uniswap uses an innovative mechanism known as Automated Market Making to automatically settle trades near the market price. In addition to trading, any user can become a liquidity provider, by supplying crypto to the Uniswap contract and earning a share of the exchange fees.
Wrapped XEM (stakedXEM) is an ERC-20 token that represents a XEM token being staked by StakeHound. Every day, StakeHound distributes the rewards from staking the XEM to the stakedXEM holders. In the meantime, stakedXEM holders can freely transfer them and use them in DeFi for borrowing, providing liquidity, or participating in new economic products.
NEM Group supports the development of NEMNIS1 and Symbol from NEM , which launches towards the end of 2020. Symbol is the next-generation enterprise-grade blockchain solution from NEM, purpose-built for Enterprise adoption. NEM NIS1 (XEM), is NEM’s original blockchain and launched in 2015. NEM Group comprises three separate entities: NEM Software, NEM Trading, and NEM Ventures which together will contribute to the development of blockchain technology for generations to come. NEM NIS1’s native currency is XEM, which can be 'harvested' using its POI (Proof-of-Importance) algorithm.
NEM Group is a global blockchain development company headquartered in Gibraltar and led by CEO, David Shaw.
Learn more at NEM.io.