Innovations in Liquid Staking and Re-Staking in the Cosmos Ecosystem

Persistence one is one of the application chains in the Cosmos ecosystem that was the first to enable IBC, CosmWasm, and liquid staking modules. By continuously delving into POS and liquid staking-related products, it has built a complete liquid staking and re-staking architecture for the Cosmos ecosystem.

On December 5, 2023, the Cosmos community voted to allocate 600,000 ATOM to pSTAKE for the development of liquid staking business. In return, pSTAKE will share 15% of the liquid staking revenue with Cosmos Hub.

Persistence Ecosystem Overview

According to official data, the total locked value of the Persistence ecosystem ( TVL ) reached 14.78 million USD, with an IBC trading volume of 15 million USD in the last 30 days and an average transaction cost of less than 0.005 USD.

Data shows that Persistence.one has established 121 channels with 44 other zones in the Interchain network, demonstrating a high degree of interconnectivity. 74.7% of the network tokens are staked, with an annualized yield of 16.7%, reflecting high network security and participation.

The infrastructure of Persistence consists of 6 nodes and 100 validators, together maintaining the decentralization and security of the network.

In the last 24 hours, the IBC trading volume of Persistence reached $260,800, with a total of 4,955 transactions, of which 616 were IBC transactions. There were 932 active addresses, with 86 of them being IBC active addresses. It is worth noting that the IBC inflow continues to exceed the outflow, indicating that more and more value is flowing into Persistence and participating in stake.

Technical Support

Persistence supports the CosmWasm framework, allowing developers to write secure and interoperable smart contracts using the Rust language. DApps developed based on CosmWasm can achieve cross-chain operation through IBC, providing convenient, secure, and efficient technical support for liquid staking.

Persistence connects 54 Cosmos application chains through IBC, enabling trustless communication, transfer, staking, and liquid staking of tokens, laying a solid foundation for staking and liquid staking in the Cosmos ecosystem.

In addition, Persistence also utilizes Interchain Accounts (ICA) to achieve ICA Liquid Staking. This feature allows an account on one chain to perform operations on another chain, significantly improving the efficiency and flexibility of staking and restaking.

Cosmos Ecosystem Staking Mechanism

In the Cosmos ecosystem, the staking mechanism involves two main roles: validators and delegators.

When staking, the delegator can choose to delegate tokens to specific validator nodes. The validators are responsible for running the hardware and blockchain applications based on the Cosmos SDK, reaching consensus with other validators, and proposing and validating new blocks on the chain.

To maintain network security, the Cosmos ecosystem has established a penalty mechanism. If validators exhibit improper behavior, such as accidental or malicious downtime, the staked deposits of delegators may be reduced by 0.1%. For more serious violations, such as double signing, the staked deposits may be reduced by 5%.

This mechanism prevents malicious behavior through economic incentives and potential penalties, where validators and delegators share responsibilities to maintain network efficiency and security while earning token rewards.

pSTAKE staking platform

pSTAKE provides a streamlined staking process for the Cosmos ecosystem. Users only need to select the tokens to stake and the chain they are on to complete the staking. Once the staking is completed, the pSTAKE protocol will issue the corresponding staking rights tokens to the user's wallet, such as stkATOM for staking ATOM.

An important feature of pSTAKE is automatic compounding. Taking stkATOM as an example, the daily staking rewards (ATOM) for users will automatically enter staking to continue earning rewards. This means that the number of staked ATOM corresponding to each stkATOM will gradually increase, allowing users to receive more ATOM when they unstake.

When users unstake, they usually need to wait for 21-25 days. They can also choose to pay a 1% fee for a flash unstake. When retrieving the stake, the corresponding stk assets will be burned.

Currently, pSTAKE supports staking of various assets, including ATOM on Cosmos Hub, OSMO on Osmosis chain, DYDX on dYdX chain, STARS on Stargaze, HUAHUA on Chihuahua, and these 5 tokens minted on Persistence chain.

It is worth noting that regardless of which chain's assets are staked, a certain amount of the Persistence chain's native token $XPRT is required as GAS fees, but the GAS fees on the Persistence chain are very low.

stake derivatives

Persistence and the Cosmos ecosystem have launched various stk asset derivatives. For example, on certain DEXs, users can directly swap stkATOM for ATOM without the need to unstake or pay additional fees. In addition, the combination of stk assets and native assets can also be added to DEXs to provide liquidity and achieve higher yield rates.

$XPRT stake

As an independent blockchain, Persistence also needs to enhance network security through staking. Users can easily stake $XPRT in the Persistence official platform or keplr wallet. During staking, users can choose the validator nodes they wish to delegate their $XPRT to.

Stake Security Assurance

Persistence and pSTAKE are both open-source programs, which is an important guarantee of security. The pSTAKE program is developed by 72 developers who are actively maintaining updates.

In addition, Persistence and pSTAKE collaborate with several well-known security firms to provide comprehensive support for the security of staking and re-staking. These security partners include Halborn, PeckShield, Certora, Hexens, Notional, Trail of Bits, Solidified, ConsenSys Diligence, Oak Security, Immunefi, and Forta.

Re-staking Innovation

The Persistence team is building Restaking infrastructure in Cosmos, allowing users to deposit liquid staking tokens (such as stkATOM, stTIA, stkDYDX, etc.) into Persistence via pSTAKE, Stride, and Quicksilver. This enables users to restake assets and protect additional chains while earning extra rewards.

The re-staking module of Persistence supports staking requests for various assets, including staking equity tokens, stablecoins, and LP tokens.

re-staking alliance

The re-staking module of Persistence is developed based on the Alliance module. Alliance is an open-source Cosmos SDK module that allows assets to be staked from one blockchain to another, establishing mutually beneficial relationships through inter-chain staking.

In the re-staking alliance, stakers of different assets distribute rewards according to the reward weight of the assets. For example, the reward weight of $XPRT is 1, while the reward weights of other assets are determined and adjusted through decentralized governance.

This staking asset alliance reward distribution mechanism forms a community of shared interests, which is conducive to enhancing the security and decentralization of the Cosmos ecosystem.

Source of Re-staking Income

The tokens used by the user for re-staking are locked and will be minted into native tokens proportionally. These native tokens enter the staking module to be staked to the validator on behalf of the delegator. The staking rewards obtained are then distributed to the original staker.

This mechanism is not only a source of yield for the re-staking of Persistence but also further strengthens the security and Liquidity of the Cosmos ecosystem.

Conclusion

Persistence provides an efficient and secure economic infrastructure for liquid staking and re-staking in the Cosmos ecosystem. Through innovative liquid staking products, Persistence is gradually deepening its influence in the Cosmos ecosystem, bringing higher security, asset liquidity, and participation to the ecosystem.

Persistence's re-staking program establishes an economic alliance for re-stakers, forming a cross-chain community of shared interests. This not only enhances mutual security but also improves the level of decentralization within the re-staking alliance of the Cosmos ecosystem, laying a solid foundation for the future development of the Cosmos ecosystem.