What is sICX and how does it work?

Read this post on the Balanced blog.

Balanced introduces a number of new assets to the ICON ecosystem. One of them, sICX, has raised many questions. So what is sICX, and how does it work? Let’s explore the details.

When you deposit ICX as collateral on Balanced, it’s first staked so you continue to earn staking rewards. This is crucial to the success of Balanced, as it would be much harder to encourage participation if investors had to sacrifice these rewards.

The staked form of ICX is known as sICX, and its value is based on the number of ICX in the staking pool. The amount increases each day based on ICON’s reward rate.

Let’s say you’re the first person to convert ICX to sICX. You deposit 1,000 ICX, which is converted to 1,000 sICX in the background. After 1 year, you’ll still only have 1,000 sICX. However, assuming an 11% reward rate, your 1,000 sICX will now be redeemable for ~1,110 ICX.

The number of sICX you hold remains constant, but the amount of ICX tied to it will increase over time as more staking rewards are earned and automatically re-staked.

sICX has many benefits:

  • Instead of claiming and re-staking rewards manually, sICX allows for auto-compounding: staking rewards are automatically claimed and staked every time someone interacts with the collateral pool, so you get the maximum return.
  • You can skip the 5–20 day unstaking period by swapping sICX for ICX on the Balanced exchange. You’ll receive 1% less ICX than if you waited.
  • You can use staked ICX in a liquid form, which means you can hold it in your wallet or supply liquidity to a pool (i.e. sICX/bnUSD) without missing out on rewards.
  • It increases the speed of traditional unstaking: when users deposit more ICX into the sICX contract (i.e. deposit more ICX collateral into Balanced or trade for more sICX on the Balanced exchange), it’s used to fill any pending unstaking requests. Instead of waiting ~7 days, it could be 1.

If you want sICX, you don’t have to deposit and withdraw collateral to get it: you can always swap ICX for sICX for free on the Balanced exchange.

The Balanced exchange includes an ICX/sICX liquidity pool, which is how you can bypass the unstaking period. If you supply ICX to this pool, you’ll earn Balance Tokens while your order is open, and ICX staking rewards after your order is filled (because your ICX is converted to sICX).

Learn more about the Balanced liquidity pools.

If you have any questions about sICX, chat with us on Telegram.

--

--

--

Balanced is a finance hub for the ICON Network. Mint a stablecoin called Balanced Dollars, swap and supply crypto, and vote to shape Balanced’s future.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Inside the Ankr and Mastercard Partnership

Cryptocurrency Regulations and Future Scenarios

VentUp launches on Polygon to bring scalability to dApps

The birth of something great

1.5 billion USD of crypto stolen or lost

Meet Adrian Baschuk, NFT Marketing Advisor

Biggest ICOs (Initial Coin Offerings) of This Year

I will write metaverse, nft, crypto, ico, cryptocurrency article

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Balanced

Balanced

Balanced is a finance hub for the ICON Network. Mint a stablecoin called Balanced Dollars, swap and supply crypto, and vote to shape Balanced’s future.

More from Medium

New to Crypto, Bitcoin? Things You Should Know Before Investing

Studyum x De Prizio Advisory: Studyum’s Vision takes over Europe!

Crypto is awash in a sea of GameFi ClickPasta; Seed of Life on Treasure has created something NEW…

Get ready for Olympus v2