Liquidity Innovation in the Cosmos Ecosystem: Persistence Labs' Strategy and Vision

Introduction

This article will explore the development strategy of Persistence Labs within the Cosmos ecosystem and its innovative solutions to liquidity issues. We will delve into why Persistence chose the Cosmos ecosystem and how it brings value to the entire ecosystem through liquidity staking services.

Persistence's Journey in Cosmos

Mikhil, the Chief Strategy Officer of Persistence Labs, entered the cryptocurrency industry in 2019, attracted by the potential of the Cosmos ecosystem. He believes that Cosmos is more like a diverse universe compared to Ethereum, connecting multiple independent blockchains through the Inter-Blockchain Communication Protocol (IBC). This architecture allows each application to build on its own chain, avoiding the problem of competing for block space on a single chain.

Persistence has chosen to establish a dedicated Layer 1 blockchain within the Cosmos ecosystem, aiming to address liquidity issues. As one of the earliest chains in the Cosmos ecosystem, Persistence Chain allows users to lend, trade, and issue liquid collateralized assets.

Advantages of Application Chains

Mikhil emphasized that the main reason for choosing to build an application chain is that it can achieve functionalities that Layer 1 cannot. Taking dYdX as an example, after migrating from Ethereum to the Cosmos tech stack, it is better able to capture MEV (Maximum Extractable Value) profits, directing them to token holders rather than participants in the underlying public chain.

In addition, application chains provide a higher degree of customization and chain sovereignty. Project parties can independently decide the working rules of the chain, profit distribution, parameter operation methods, and block generation mechanisms. Cosmos abstracts cross-chain communication and consensus parts, allowing application developers to focus more on the development of the application itself.

Persistence's Liquidity Staking Solution

One of the main challenges facing the Cosmos ecosystem is insufficient Liquidity, as users often have to choose between staking and participating in DeFi. Persistence addresses this issue by launching the Liquidity staking product pSTAKE. After staking ATOM, users can receive the liquidity token stkATOM, which can be traded on Persistence's DEX product Dexter or participate in other DeFi activities.

Compared to competitors, Persistence's advantages include:

1. As the first liquidity staking solution on Cosmos, it has a first-mover advantage and brand reputation.
2. Place great emphasis on security and invest substantial resources in security audits.
3. Focus on user experience and provide products with high usability.

It is worth noting that Persistence places a strong emphasis on decentralization. Currently, pSTAKE has over 60 validators, which is twice that of its competitors, and is continuously exploring better validator selection and evaluation mechanisms.

Security is crucial

Since its development of pSTAKE in 2020, Persistence has been highly focused on cross-chain security. The team has invested a significant amount of time and effort auditing the cross-chain process of funds and the security of validators. Additionally, they have implemented a bug bounty program and conducted comprehensive testing before launching new products to minimize potential risks.

Future Outlook

Persistence Labs believes that liquidity tokens will become the foundational assets of DeFi, and liquidity staking is expected to be the next major event driving the development of DeFi. In the future, Persistence plans:

1. Attract more Cosmos ecosystem applications to collaborate with pSTAKE and Dexter
2. Continue to optimize user experience
3. Strengthen market education to guide more users from traditional staking to Liquidity staking.
4. We welcome teams with a shared vision to build applications on the Persistence Chain, especially projects related to Liquidity Staking.

Through these efforts, Persistence Labs is committed to bringing more Liquidity to the Cosmos ecosystem and promoting the development of the entire cryptocurrency industry.