What is Ankr Switch?
Ankr Switch is a product for switching between reward earning tokens and reward bearing tokens for the same asset. For example, aETHb and aETHc.
What are reward bearing and rewards earning tokens?
They are tokens issued to you by Ankr when staking with Ankr Earn. These tokens are in a 1:1 ratio to your staked assets.
There are two types of Liquid Staking tokens:
- Reward bearing tokens e.g. aETHc have a fair value of 1 aETHc token: ETH i.e. 1:1 ratio. Staking rewards accumulate for reward-bearing tokens so when you redeem your stake, you receive your stake plus accumulated staking rewards.
- Reward earning tokens e.g. aETHb, receive daily rewards distributed through rebasing. These appear directly in your wallet and you can see your balance adjust on a daily basis.
The main difference between reward earning and reward bearing tokens is that the first distribute staking rewards through a rebasing process on a daily basis, meaning the fair value upon redemption should be equal to the original asset price, whereas the value of the second should be the original asset + staking rewards.
Currently, Ankr Switch supports switching between:
- aETHb–aETHc — both directions.
- aBNBb–aBNBc — both directions.
Why Ankr Switch?
Having staked your ETH, you may discover an exciting opportunity you don't want to miss. Ethereum, however, doesn't support the unstaking functionality yet.
You may apply a crypto arbitrage strategy, where discovering the current aETHb price < aETHc price, you can switch aETHb to aETHc and sell them on a DEX for a better profit.
Why did we need a switch?
Linked pricing to avoid possible widening gap between the price of aETHb and aETHc.
Many DeFi platforms and CEXs/DEXs don't support aETHb tokens. They cannot integrate ERC-20-like aETHb, but they can integrate ERC-20 aETHc.