Future of Digital Tokens Staking Model Integration for US States

Disclaimer: - The article is based on various research materials, opinions, and blissful thoughts, the target audiences are public, enterprises, government agencies, and other interested parties. However, it is not for profit, not a financial advice, but open for suggestions to improve. Article interpretation, and contained information perception varies on readers to readers. The staking models are outlined in summary, for further architectural details, please reach out to our team.

NetxtGenMeta.X defines “Crypto-verse is a multiple blockchain networks interoperate in a common consensus mechanism, across multi-chains to facilitate staking services, real assets tokenization, DApps proliferation, and crypto assets & their settlement services. The crypto assets, or digital innovative services are interconnected to trade within intra cryptonet, inter cryptonet, or extra cryptonet interconnected platforms, by utilizing public, private, or confederate DLT blockchain networks, even spun across multi-Metaverses.”

Introduction

Geopolitical exclusion of US and its allies, and BRICS rise to deny dollar as a reserved currency for global trading is being highly polarized in global political stage, and less appetite in globalization.

As per technical analysis, US being incapable in developing sufficient microchips, & inefficiency on 5G solutions and technology driving forces are contemporary lessons learnt for not being proactive on metamorphic & rapidly exploding technological advancement, adoption, regulations, and guidance.

Concerning future US digital economy, rise of AI, and rapid proliferation of innovative digital technologies, US must succeed as a global powerhouse of Web 3 (next generations internet) and digital financial innovations, so NetxtGenMeta.X recommends a “Future of Digital Tokens Staking Model Integration for US States”.

The proposal is open for public suggestions, to adopt metamorphic digital tokens integration as a distributed common consensus innovative financial model, embrace innovative digital finance products & services, and rapid Web 3 related digital technology & trends adoption, along with digital innovative regulations, guidance, and frameworks clarity.

The model is primarily focused in staking services offered by each US states to state residents, businesses, subsidiaries, and investors via State Member Banks and their subsidiaries. Refer to Wyoming State crypto clarity regulations on crypto assets, digital tokens, innovative finance, and digital transactions settlements.

Proposed model also encourages to integrate states legal governing expert services into smart contract, such as DOJ, IRS, Treasury, Audit farms, Lawyers, and Accountants. In addition, model emphasis on regulations and compliance entities such as SEC, CFTC ?involvement in crypto clarity regulations like European MiCA adoption to support ?CASP (Crypto Assets Service Providers), investors, and crypto ecosystems.

Cybersecurity frameworks, compliance, regulations, user privacy, and guidance from reliable authorities such as NIST, NSA, CISA, GDPR are also recommended to integrate into CASP platforms, innovative financial services, and digital assets products.

Although, to prosper DLT and innovative finance, CISA certified framework require to be adopted at each phase of IT (Information Technology) management lifecycle for infrastructures security, services deployment, maintenance, business continuity, data privacy & backup, and along with data carriers and bandwidth reservation to prioritize innovative finance data and traffic flow.

Future States Owned Staking Model

State Member Banks require 100% collateralized assets in custody prior issuance or distribution of digital tokens generated from respective DLT (Distributed Ledger Technology) or similar technology. The custodial crypto or innovative digital assets must be measured in US dollar/fiat, at the time of conversion.

Once collateralized assets are transformed into digital tokens, can be staked, the staked tokens generate rewards in fiat, all profits or loss are income-taxed proceedings, such as transaction validation fee, liquidity pool profits or loss, data validation fee from DApps etc. The total income or loss is to be automatically deducted and reported to local, state, and federal IRS vault for taxation purpose.

Since the value of digital assets are directly proportional to physical or collateralized assets, conversion of digital assets back to collagenized or physical assets, or into fiat must also reflect in the US dollar/fiat denomination, at the time of withdrawal from staking program, or while cashing out digital assets back to fiat, physical or real assets.

Total profit or loss from staking programs is measured in real-time digital dollar proportional to the value fluctuation of collateralized real or digital assets, the assets could be real estate, gold, car, personal properties, bitcoin, Ethereum, utility tokens, security bonds, trust funds, ETF etc.

As per NextGenMeta.X, State offered future staking models are categorized as below;

Direct Client Staking: - In direct client staking model, a SMB (State Members Bank) offers a DApps interface for staking with a public smart contract execution function to their end users; as state residents, or subsidiaries, FinTech institutions, businesses, state departments, or any registered DAOs.

Staking rewards are distributed periodically to the stake owners or depositors. Where, a DApps in a form of client interface is made available to investors, and communicates to an always-on group of validators (a proof-of-stake nodes) consensus command center.

However, each transactions verification and validation execute on SMB owned or certified third-party managed validators, earned fees, rewards & yield is collected and proportionally distributed to the DApps users account directly. Applicable tax is automatically extracted by staking program for local county, state, and federal system appropriately.

In this model, users possess advance digital knowledge, crypto or innovative financial knowledge, and users are mostly active online or remote. For an instance, a user, or a client can use any SMB certified external wallet services, or CEX to transform assets into digital tokens and vice-versa, utilize staking functions to stake digital tokens, claim rewards in tokens, un-stake digital tokens etc.

User’s KYC, and transactions are monitored as a federal mandatory requirement, to mitigate AML (anti-money laundering) & TF (terrorist funding) nature of transactions.

Bank Custodial Staking: - In bank custodial staking model, a SMB or its subsidiaries offer integrated crypto asset trading CEX (Central Exchange) and conventional banking services platform, where, a user offered a custodial wallet, a private key storage vault, and deposits of digital tokens, the digital tokens are exchangeable based on user’s collateral assets measured to fiat value, and vice-versa.

A user custodial service is pretty much like a checking or saving bank account along with a trading profile account, as CEX is an integrated tool or a service to conventional banking. Custodial services are not limited for a user, who can deposit (stake) or withdrawal (un stake) fund anytime with specified applicable service fee.

With custodial staking, a user will receive rewards or yield 24/7, “own your assets and earn rewards or yields anytime”. An inclusive cashless society is achievable with this approach.

In this model, most users are novice or intermediary, and need technical support, clear instructions, and step by step guidance, perhaps conventional banks physical outlets offer continue these services.

User Custodial Staking: - In this staking model, a SMB or its subsidiaries offer both DApps, software & infrastructure as-a-services in a form of a license to operate, as a self-custodial for a single user, or institutional entities.

Where users are offered to join staking program with their choice of private wallets, self-manage private keys used for accessing staking services, also DEX (Distributed Exchange) products and services are heavily utilized along with inbuilt swap for digital assets exchange purpose.

SMB offers fee for service both software and hardware services at DEX platforms, and users (validators are staking participant) get rewards as per their verified digital token staking amount. ?Liquidity pool creation, farming, yielding is also offer on DEX, as an add on financial products and services offer directly, or allow certified third-party subsidiaries to operate their validators within SMB co-locations or cloud data-centers.

In this model, target users are highly proficient professional users, subsidiaries, or institutions, who can operate their own validators, or able to manage staked pool ownerships in limited instructions and educational training.

Distributed Finance Staking: - In this staking model, a SMB offers smart contract that is facilitated for liquid staking.??For an instance, SMB allows their users, subsidiaries, brokers or third-party DiFi (Distributed Finance) service providers to offer their users to deposit any amount of state issued digital tokens for staking, along with inbuilt swap.

For an instance, number of clients or users deposit fractional amount, upon certain number of digital tokens are collectively deposited, a DAO or broker profile is formed to run as a single entity representing all the clients or users.

The DAO can have their own validators rented from state (SMB) owned DLT networks, or allowed to offer other SMB certified third party validators, the professionally certified validators, or multi-chain DLT networks are known an extended financial service.

In this model, one user or an institution can create multiple profiles or be part of various pools or DAOs, such as ETF, EDX or market makers. Users have both custodial services or non-custodial services options available.

Conclusion

For all types of staking model, a federal requirement is mandatory KYC & transactions monitoring. At state level, SMB must monitor their subsidiaries or users’ digital innovative transactions, analyze risky digital tokens conversions, determine risky assets trading, and hold or monitor suspicious transactions within a state specific DLT networks to avoid loss in digital tokens, to mitigate real assets or collateralized value depreciation, and all to satisfy federal supervisory program.

SMB shall offer and maintain bandwidth and infrastructures availability 24/7, perform data validation and verification, preserve data privacy, facilitate transactions transparency, proactively deploy cyber security measures securing data and IT infrastructures, and obviously, adopt more agile process for further development and upgrades of DLT network, innovative financial products, and services.