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Liquidity Nodes
How Maya obtains supercapital efficiency
How do we accomplish more capital security? What if instead of nodes bonding only $CACAO, they bonded LP units? In this section, we explain how nodes become liquidity providers with little extra steps.
- 1.Traditionally, to secure a place in the Pure Bond Model, you must buy and stake large amounts of native assets. It isn’t called staking, it’s called bonding, but the principle is similar: you entrust your assets to a system that will hold them for you temporarily. This is all ingrained into the Pure Bond Model architecture as a security feature since these bonded assets are susceptible to being seized if the node misbehaves or breaks the rules seriously. This keeps nodes honest since bonds are higher than the assets they secure.
- 2.In Maya Protocol, nodes still need to buy and bond a big amount of $CACAO for the exact same security reasons, but we store them in a totally different place. Whereas in the other model, bonded native tokens are locked up unproductively inside a specific address, bonded $CACAO in Maya is deposited inside our Liquidity Pools, paired with other native assets and generating yield! Any capital bonded by our node operators participates in the fees generated by the pools in which they are deposited, making our use of capital much more efficient!
- 3.This feature is great because it means that Maya node operators can supercharge their invested capital efficiency by earning both Liquidity Provider rewards plus their regular Validator Rewards. Capital efficiency is no longer inversely proportional to Security!
Last modified 8mo ago