What is Cross-chain staking?

Cross-chain staking refers to staking tokens on one blockchain and earning rewards in tokens on a different blockchain. This is enabled by using a cross-chain bridge, which allows for the transfer of assets between two different networks. 

Divi's cross-chain staking will provide additional earning opportunities for token holders, enable deeper liquidity, and creates interoperability between different blockchain networks. It can also allow for more decentralized and secure validation of transactions, as stakers on one chain can help secure another chain.

To understand how to access Divi's cross-chain staking rewards, let's revisit a few things we discussed in previous articles:

Bridges

As we learned in the Bridges article, layer-1 DIVI can be equally exchanged for an Ethereum-wrapped version of Divi, enabling access to the Divi DeFi Platform. This new token is known as DIVI(ERC20) and is commonly referred to as eDIVI. 

The DIVI that is exchanged for DIVI(ERC-20) at the bridge is deposited into one of Divi’s patented staking vaults. While that DIVI is vaulted, it earns staking rewards while continuing to secure the Divi blockchain. As staking rewards are generated in the vault, an equal amount of DIVI(ERC-20) is automatically minted on the Ethereum blockchain to ensure the 1:1 ratio is maintained. 

Simply crossing the Divi bridge will not qualify users to access the cross-chain staking rewards, and some additional steps must be taken. Keep reading, as we will explain below.

Liquidity

As we discussed in our Yield Farming article, users who provide liquidity to the eDivi-ETH liquidity pool are presented with additional earning opportunities. The liquidity providers are given LP tokens representing the liquidity they provided and earn a proportional amount of the transaction fees for the trades on that trading pair. 

When a liquidity provider chooses to remove their liquidity from the pool, the remaining balances of eDIVI and ETH and the accrued portion of transaction fees can be realized.

The Double Dip

In addition to the fees earned from liquidity provision, the Divi DeFi platform offers participants an innovative way to earn that has not been seen before in the crypto space. Cross-chain staking rewards are a unique new way to "double dip" on the rewards you can earn.

After providing liquidity to the eDIVI-ETH pool, users can take an additional step and stake their LP tokens at the Divi DeFi Farm, opening up a secondary earning opportunity. Staking the LP token on the farm is the key to accessing the cross-chain eDIVI stakes from the vaulted DIVI at the bridge. 

The newly minted DIVI(ERC-20) tokens from the bridge are then delegated to LP token holders in proportion to the LP token’s staking weight and age. Users will be able to claim or harvest their rewards at their discretion, however, the accrued rewards will not automatically be deposited into the user's wallet. They must manually claim those rewards. 

Participating in Divi DeFi by providing liquidity and yield farming will help create a healthier trading market with deeper liquidity. By participating in Divi's industry-first, cross-chain staking, you can take advantage of earning opportunities on different blockchain networks while also helping to secure and validate transactions across multiple chains. Compared to layer-1 staking alone, this innovative approach will offer you the ability to earn even greater rewards.

Next Up: Layer-1 staking vs. cross-chain staking