DePIN Staking, Pt. 2: Liquid (Re‑)Staking

Why Liquid (Re)Staking for DePIN

<10% of DePIN’s ~$50B market cap is staked today, and <1% is liquid staked. If DePIN staking dynamics rhyme with Ethereum and DePIN doubles in market cap, liquid staking TVL can expand >50× from here. In DePIN, the goal of an LST is simple: maximize risk‑adjusted staking yield for the specific purpose staking serves in the underlying network.

In (1), LSTs act like credit funds (underwriting + liquidations). In (4), they act like equity funds (conviction‑weighted bets). Different LST designs will win on Filecoin vs Helium.

Filecoin LSTs: GLIF vs Parasail

Filecoin is DePIN’s most mature staking ecosystem: GLIF, Parasail, and stFIL each crossed $100M TVL post‑FVM (Mar 2023). Filecoin LSTs behave like credit funds that lend to storage providers.

• Parasail (pFIL): A rebasing model. Borrowers pay interest implicitly via pFIL inflation; borrowing costs are found by pFIL/FIL auctions with external arbitrageurs. Benefits: borrowers don’t track interest; utilization is 100% by design → higher LST yields.
• GLIF (iFIL): A pool model with explicit FIL interest (e.g., 16% APR target). With ~$125M iFIL minted but ~$200M deposits, ~65% utilization dilutes yield to <10% for iFIL holders. Lower risk target (zero‑loss) ↔ lower yield. Future pools may vary but face utilization trade‑offs.

Rule of thumb: Fixed borrowing costs → variable utilization. If utilization <100%, dormant capital dilutes staking yield.

Beyond Filecoin: Liquid Re‑Staking

LRTs re‑hypothecate staked capital from outside the native chain (e.g., SOL, ETH) to secure DePIN services on Filecoin and beyond. Lending‑style models face asset/liability mismatch (e.g., liabilities in SOL vs assets in locked FIL). Insurance‑style designs are more robust:

• Insurance model: SOL stakers re‑stake JitoSOL to insure a Filecoin miner’s service. If valid proofs arrive on time, stakers earn MEV + premiums; if not, they are slashed.
• Go‑to‑market: The hard part is finding premium payers. Partner with DePIN gateways to bundle guarantees and pass yields to re‑stakers.

Parasail (cross‑chain): Expands from Filecoin using Solana contracts that listen to Filecoin service outcomes via a node network (Eigenlayer AVS for security). Finality rests on Filecoin proof‑of‑spacetime.

Alternative Coordination Layers

• WitnessChain: An Eigenlayer AVS securing proofs‑of‑location/bandwidth via “watchtower” nodes. Newer consensus → higher demanded yields vs Filecoin‑settled designs.
• Device identity layers: DePHY and Vistara verify connected hardware resources (TEE, GPU, LoRa, etc.), pushing verification to the edge. Bigger claims → higher yields demanded by re‑stakers.

Aggregators of Supply

Multi‑miner apps aggregate household devices and route across DePINs; moats are thin, so each leans into a third leg of network effects:

• PingPong: 10k+ sign‑ups, 2k+ DAUs early; aims to aggregate demand via a DePIN SDK.
• Sigmoid: Launches LSTs for AI networks (e.g., sigOLAS); TEEs spin up agent nodes; token becomes a yield‑bearing index of AI tokens.
• Hivello: Parallel mining app; positioning as a launchpad for new DePIN tokens + initial node networks.

End‑state overlap: demand aggregator × launchpad × yield index. Each path faces timing and capture challenges.

Summary

• DePIN LSTs/LRTs maximize risk‑adjusted yield for different staking jobs—credit vs equity analogues.
• Filecoin’s LSTs (Parasail, GLIF, stFIL) are furthest along; insurance‑style cross‑chain re‑staking widens TVL.
• New coordination layers (WitnessChain, device‑ID) will attract re‑stakers further out on the risk curve.

References

FVM launch (Mar 2023) · GLIF · Parasail · stFIL · DeFi Llama · Jito · WitnessChain · DePHY · Vistara · PingPong · Sigmoid · Hivello · Nexus Mutual and other DeFi insurance write‑ups.