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.

Disclosures

This material is for informational purposes only and does not constitute investment advice or an offer to sell or the solicitation of an offer to purchase any securities. Past performance is not indicative of future results. Projections and estimates are speculative and subject to change.