Exploring the Benefits of Liquid Staking on the Cosmos Hub
Iqlusion just dropped a signaling proposal on the forum to explore the benefits of Liquid Staking on the Cosmos Hub. This proposal enhances capital efficiency for ATOM and makes it more attractive in an explosive Cosmos DeFi environment. Are there risks? Read to find out!
Cryptocito | Cosmos Youtuber ⚛️
Cofounder of @Stakecito & @CosmoverseHQ Any cryptocurrency can go to zero 🎢 Enter the @Cito_Zone ☀️
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Liquid Staking on the Cosmos Hub ⚛️
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023
Iqlusion just dropped a signaling proposal on the forum. Quick summary & initial thoughts 👇🏼 -
• Liquid staking has strong product market fit and enhances capital efficiency for ATOM.
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023
• ATOM is the most attractive asset in Cosmos and used across various DeFi platforms in our ecosystem. -
Implementing Iqlusion's Liquid Staking Module (LSM) improves the ATOM Economics and makes it even more attractive in an explosive Cosmos DeFi environment.
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023 -
Are there risks? Yes. But Iqlusion proposes the implementation of two features that will eliminate these:
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023 -
1. Cap the amount of ATOMs to be liquid staked to 25%.
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023
• Reduces dependencies on liquid staking providers
• Eliminates the risk of a ⅓ attack -
2. Introduce a validator-bond factor of 250:
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023
• Delegators can only liquify 250 ATOM on each ATOM that a validator has in self-bond -
This means that ATOM validators are incentivized to ramp up their self-bond so that their delegators can liquify staked ATOMs.
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023 -
Example:
— Cryptocito | Cosmos Youtuber (@Cryptocito) April 8, 2023
• Coinbase custody (largest validator) only has 2 ATOM in their self-bond, meaning delegators can only liquify 500 ATOM
• Our validator @Stakecito has 1k ATOM in self bond, meaning that up to 250k ATOMs could be liquid staked.