Maturity Mismatch

Story will have different staking periods, specifically (2 weeks, 3months, and a year). The longer the staking period you choose, the higher the yield you receive. Verio utilizes a maturity mismatch concept to generate higher returns. Using banks as an example, a portion of users’ liquid deposits are redirected into longer term investments for higher yield. Verio will stake a portion of $IP with longer staking periods to earn higher yield for our $vIP holders, without sacrificing short term access to liquidity when users want to redeem.

In the example above, Verio maintains

• a reserve of 50% $IP stake directed towards the 14 day time frame (low yield 4%).

• a reserve of 25% $IP stake directed towards the 3 months time frame (mid yield 5%).

• a reserve of 25% $IP stake directed towards the one year time frame (high yield 6%).

Imagine a user wants to earn a high yield but also doesn't want to have liquidity locked up for more than 14 days. In order to keep liquidity highly available (i.e. 14 days), the user can only choose the 14-day stake period with validators. This yields only 4%. However, in Verio's model, we will offer a higher yield by directing a portion of the aggregated users' stake towards longer periods

$$50\% * 4\% + 25\% * 5\% + 25\%*6\% = 4.75\% > 4\%$$

Even if Verio takes a 15% fee on the rewards,

$$4.75 \% * (1-15\%) = 4.0375\% > 4\%$$

Verio will still generate a higher yield than users staking directly with validators. Furthermore, as a reference, banks only keep 5% of the entire reserve liquid to match users' deposits. We are being extremely cautious in the example above by keeping 50% (10x of a bank) of the reserves as liquid. Thus, we should expect Verio to overwhelmingly outperform staking with validators directly in the long term, as Verio will gradually increase the percentage of stake directed towards longer periods, which means even higher revenue for Verio.

Conclusion

Users should predominantly choose to stake with Verio; they will not only be able to have $vIP liquidity to leverage instantly, but also earn a strictly higher yield after fees just through liquid staking. This becomes especially important as whales predominantly choose to lock capital for only shorter time frames (e.g. observe cvx & crv big holders' behaviors), so we expect our maturity mismatch solution to attract significant TVL from whales.