The concept – issued recently on GitHub by Sablier developer Paul Berg – proposes that customers stake coins in exchange for products and services, rather than make outright payments to the vendor.
Staked tokens will generate interest via DeFi lending protocols such as Compound Finance – capturing value for merchants. This comes at zero cost to the customer, who will retrieve their entire stake at the end of the period.
Appropriately dubbed by The Defiant as the Get-stuff-for-“free” model, the new payment method could provide utility to many crypto speculators who sit on significant sums of otherwise-underutilized cryptocurrency.
A current, similar implementation of the model is PoolTogether – also cited by Berg in his GitHub issue.
Pooltogether.us is a no-loss lottery, which utilizes this staking system. The money from all lottery participants is pooled and lent via the Compound Protocol to earn interest. At the end of the loan period, one lucky winner takes home all of the interest (minus 10% which goes to the platform). All of the other participants receive back their entire staked investment.
Of course, there are still some wrinkles in the idea that may need to be ironed out.
Small risks exist on the lending-side such as the possibility of default, as well as volatile lending rates making returns rather unpredictable.
Getting something for “free” has a powerful marketing effect, which we have seen time and time again in traditional commerce.
The ability to rent or purchase something in exchange for nothing other than staking your coins is truly an alluring concept and could work extremely well for a significant range of goods and services. This could be an exciting opportunity for projects that have been unable to monetize with traditional methods.