How Persistence Chain Affects the Development of Liquid Staking and Re-Staking in the Cosmos Ecosystem

Persistence one is one of the early application chains in the Cosmos ecosystem to enable IBC, CosmWasm, and liquid staking modules. By deeply cultivating POS and liquid staking-related products, the project 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 for the growth of liquid staking for pSTAKE. pSTAKE will share 15% of the liquid staking revenue with the Cosmos Hub.

Overview of the Persistence Ecosystem

According to official data, the TVL of the Persistence ecosystem is approximately $14.78 million, with an IBC trading volume of $15 million in the past 30 days, and an average transaction cost of less than $0.005.

Data shows that Persistence.one has established 121 channels with 44 other regions in the Interchain network, reflecting its high interconnectivity. 74.7% of the network token $XPRT is staked, with an annualized yield of 16.7%. The infrastructure of Persistence consists of 6 nodes and 100 validators, collectively ensuring the decentralization and security of the network.

In the last 24 hours, the IBC trading volume of Persistence reached $260,800, with 4,955 transactions, including 616 IBC transactions. There were 932 active addresses, with 86 active IBC addresses. IBC inflow continues to be higher than outflow, indicating that 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 in Rust. DApps developed using the CosmWasm framework can run cross-chain through IBC, achieving cross-chain interoperability for applications, and providing convenient, secure, and efficient technical support for liquid staking.

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

Using Interchain Accounts (ICA) to achieve ICA Liquid Staking allows an account on one chain to perform operations on another chain, enhancing the efficiency and flexibility of staking and restaking.

Cosmos Ecosystem Staking and Network Security

In the Cosmos ecosystem, liquid staking includes two roles: validators and delegators. Delegators can choose the validator node to delegate to when staking. Validators run hardware and blockchain applications based on the Cosmos SDK, reaching consensus with other validators to propose and validate new blocks on the chain.

If a validator exhibits negative behavior, the staked deposits of the delegator will be subject to corresponding penalties. For example, if a validator unexpectedly or maliciously remains offline, it will lead to a reduction of 0.1% of the delegator's staked deposits; extreme malicious actions such as double signing violations will result in a 5% reduction of the staked deposits.

The essence of liquid staking in the Cosmos ecosystem is to prevent malicious behavior through economic incentives and potential penalties. Validators and delegators share responsibility to maintain network efficiency and security while earning certain token rewards.

pSTAKE stake

pSTAKE provides a streamlined staking process for the Cosmos ecosystem. Users only need to select the token to stake and the chain to stake on. Once the staking is completed, the pSTAKE protocol issues the corresponding staking rights tokens to the wallet, such as stkATOM for staking ATOM.

automatic compound interest

Taking stkATOM as an example, users earn staking rewards in ATOM every day, and this portion will automatically enter staking to continue generating rewards. Once the rewards enter staking, the amount of staked ATOM corresponding to each stkATOM increases, allowing users to receive more ATOM when they unstake. Therefore, the staking rewards for users are reflected in the increase of the stkATOM/ATOM ratio.

Unstake

Users need to wait 21 to 25 days when canceling the stake; they can also pay a 1% fee for an instant unstaking. When retrieving the stake, the corresponding stk assets will be destroyed.

stake derivatives

Persistence and the Cosmos ecosystem have launched more stk asset derivatives. In DEX products, users can directly swap stkATOM for ATOM without the need to unstake or pay additional fees. The stk assets can also be paired with native assets to add liquidity in the DEX, which yields higher returns.

$XPRT stake

Persistence, as an independent blockchain, also requires staking to enhance network security. Users can easily stake $XPRT on the official Persistence website or in the Keplr wallet.

Staking Security

Persistence and pSTAKE are both open-source programs, which is an important guarantee of security. The pSTAKE program involves 72 developers, and the last code submission was two days ago.

Persistence, pSTAKE collaborates with multiple security institutions to provide comprehensive support for the security of staking and liquid staking, including well-known blockchain and crypto security auditing agencies such as Halborn, PeckShield, Certora, Hexens, Notional, as well as security research and consulting firms like Trail of Bits, Solidified, ConsenSys Diligence, and Oak Security.

Re-Staking Innovation

The Persistence team is building Restaking infrastructure in Cosmos, allowing users to deposit liquid staking tokens into Persistence through pSTAKE, Stride, and Quicksilver. This enables users to restake assets and secure additional chains while earning extra rewards.

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

Re-staking Alliance

The re-staking module of Persistence is developed based on the Alliance module, enabling assets to be staked from one blockchain to another, forming a mutually beneficial relationship. The re-staking alliance shares staking rewards, and stakers of various assets are allocated according to the reward weight of the assets.

This staking asset alliance reward distribution mechanism will form an alliance with the staked assets, creating a community of shared interests, which is beneficial for enhancing the security and decentralization of the Cosmos ecosystem.

Re-staking Yield Source

The tokens used by users for re-staking are locked and natively minted tokens are minted proportionally, with the minted native tokens entering the staking module to be staked to validators in the role of delegators. The staking rewards are distributed to the stakers of the re-staked assets, enhancing the security and liquidity of the Cosmos ecosystem.

Summary

Persistence chain provides an effective and secure economic infrastructure for liquid staking and re-staking within the Cosmos ecosystem. Through an innovative re-staking scheme, Persistence establishes an economic alliance for re-stakers, enhancing mutual security and increasing the degree of decentralization of the Cosmos chains within the re-staking alliance. This series of innovations is gradually deepening Persistence's influence in the Cosmos ecosystem, bringing greater security, asset liquidity, and participation to the entire ecosystem.