How Steakwallet Simplified BNB Staking

How Steakwallet Simplified BNB Staking

Since its launch in late 2020, Binance Smart Chain (BSC or Smart Chain) has become one of the most popular and well known blockchain networks, capturing a huge amount of TVL. Explicitly (and often criticized for) trading decentralization for speed and low gas costs has allowed BSC to become a hot bed of DeFi activity for speculators, developers, and arbitrageurs. Despite its shortcomings, it has undoubtedly opened up the world of Web3 to millions of users and onboarded many Web3 developers.

In this post, we’ll dig into how the BSC (and Binance Chain [BC]) works, some of the complexities associated with building on top of it, and how we rolled out our staking integration despite these.  

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Steakwallet now supports native BNB staking in app – download Steakwallet now on iOS or Android and get a taste of those juicy yields today!

Background

For a bit of context, Steakwallet is a self-custodial, multi-chain mobile wallet. Supporting more than 20 distinct layer one networks and boasting over 30 native yield integrations, Steakwallet is your entry point into DeFi and beyond.

The complexity that presents itself when trying to offer BNB staking as a self-custodial wallet comes down to the fact that BSC (where all DeFi activity takes place) and BC (where delegation occurs) are separate networks. Until now, existing wallets in the Binance ecosystem have required users to painstakingly and manually transfer assets from BSC to BC before picking a validator and delegating to them. Steakwallet looked at these flows and believed we could do better given the tools and SDKs available to us. What has resulted is the easiest BNB staking flow in the market (whether that be on desktop, browser extensions ,or mobile) and a UX that is directly consistent with our other staking flows.

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Because BSC is EVM compatible, dApps built on BSC can be used with Steakwallet via WalletConnect. Simply lookout for the “Connect” button on your favorite dApps and select Steakwallet when choosing your wallet!

How does BNB staking work?

As mentioned, the Binance network is actually split into two distinct networks, the Ethereum Virtual Machine compatible Smart Chain and the Tendermint powered Binance Chain. Actual delegation happens on the Binance Chain, whereas DeFi activity (like interacting with PancakeSwap) happens on the Smart Chain.

Steakwallet has built a lot of tooling around interacting with both of these types of networks. We can handle issuing and submitting transactions to any EVM compatible network, already supporting the most popular L1s and L2s you’ve probably come to know. On the Tendermint side, we’re no strangers to those networks either, already supporting the CosmosHub, Osmosis, Akash, and a handful of other application specific networks.

Given that the natural starting point for most users is BSC, the complexity here is explicitly due to the cross-chain bridge that Binance has implemented. Without it, transferring your assets means registering with binance.com, depositing your BNB on BSC, then withdrawing them on BC. When it comes to this withdrawal process on BC however, you’re stuck onboarding to and using an outdated browser extension called Binance Wallet, adding yet another extension to your probably already significant list. Once you’ve done all that, you’re able to delegate to your selected validator.

Despite the difficulty associated with this, BNB boasts one of the highest staking participation rates out of any of the top networks at 81%. This is because much of this delegation power certainly comes from delegation happening on Binance (the centralized exchange) itself. Centralized exchanges are able to hold tokens on behalf of users and delegate them behind the scenes, totally cutting holders out of any of the received gains. If you opt in, often called “Earning” on these networks, they’ll give you but a percentage of the gains you could be earning if you delegated via a self-custodial wallet.

To be totally truthful, we of course did our research before starting this integration and found a few self-custodial and mobile wallets that support BNB delegation. However, they lacked the key feature we wanted to implement – delegation being associated with BNB on the Smart Chain. To us, it makes no sense for users to have to transfer their BNB to the Binance Chain in a separate flow before being able to delegate, we wanted to keep everything nice and tight for users and behind our well known 3-tap flow.

Steakwallet

Now that we’re familiar with delegation on Binance and the other options available, we can dig into how exactly our integration works. Steakwallet prides ourselves on the three step staking process we’ve created for each yield integration we support, no matter the complexity associated with it. Our challenge was then to make a staking process that seamlessly transfers tokens between the two networks and handles delegation without users needing to know any of the nitty gritty details.

Without getting into code snippets, the BNB staking flow Steakwallet has developed does the following on behalf of users:

  • Transfers BNB tokens to the Token Hub, a built in system smart contract on the Smart Chain. More information about this native cross chain bridge can be found in the official Binance documentation
  • Waits for the Bridge Module and oracle relayer running to confirm the claim on BSC and submit the state change on BC
  • Issues a delegate transaction on BC specifying the amount of BNB and the validator address. Currently Steakwallet is delegating to Coinbase Clouds’ (formerly Bison Trails) validator, however more optionality is coming soon.

Thanks to the fast block times Binance supports, this whole process takes but a few seconds ensuring users have an experience consistent with other interactions on the Smart Chain.

Once in a staked position, your BNB is earning (at the time of writing) an APR of approximately 6.3%, representing a great way to get yield on your BNB without the smart contract risk associated with many other DeFi options present in the Smart Chain..

Unstaking is a similar process, whereby funds are transferred out of BC via the Bridge Module, but is prefaced by the seven day unbonding period users must go through. After this unstaking period is finished, Steakwallet will remind users with a push notification that their BNB is ready to be withdrawn.

Conclusion

Steakwallet’s BNB staking integration is certainly one of a kind and needed extensive research into the semantics of both BSC and BC before our Web3 engineers were able to tackle it. We hope after this post you’re encouraged to move whatever BNB you may have in any centralized exchanges to Steakwallet and give self custody a go. Steakwallet is eagerly awaiting the recently announced upgrades to the Binance ecosystem that will bring a beacon chain and a roadmap for improved scalability.


More on Steakwallet

Steakwallet is a next generation multi-chain self-custodial Web3 wallet on mobile. Our goal is to give users one place to manage all their assets across chains and make engaging with Web3 as easy as never before. To achieve this, Steakwallet brings critical functionality natively into the app where we abstract away backend complexity and add market leading user experience. This includes Steakwallet’s signature 3-tap staking flows, which make participating in securing blockchain networks and earning yield as simple as ordering an Uber or a pizza. With our Explore Screen, Steakwallet allows you to find all the right dApps on any chain. With one simple tap via WalletConnect, you can now easily bridge, swap, and ape into any yield opportunity right from your phone. And with multi-chain NFT support, you can collect all of your favorite NFTs in one place and even set them as your background for to easily flex your collection. Now this is what a Web 3 wallet should look like!

Core Steakwallet Features

  • Your keys = your crypto
  • Multi-chain by default
  • Native staking flows
  • Discover the best of each chain on our Explore Screen
  • Best rates
  • Mobile-first

Come hang – join the Steakwallet community on Discord and follow Steakwallet on Twitter for all updates!


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