Persistence: How Liquid Staking and Re-staking Innovations Affect the Cosmos Ecosystem

Persistence is one of the first projects in the Cosmos application chain to enable IBC, CosmWasm, and liquid staking modules. By continuously focusing on POS and liquid staking related products, this project has built a complete framework for liquid staking and re-staking in the Cosmos ecosystem.

On December 5, 2023, the Cosmos community voted to approve a proposal to allocate 600,000 ATOM to pSTAKE to promote the growth of liquid staking. According to the agreement, pSTAKE will share 15% of the liquid staking revenue with Cosmos Hub.

Overview of Persistence Ecosystem

According to official data, the total locked value of the Persistence ecosystem is ( TVL ), reaching 14.78 million USD, with an IBC trading volume of 15 million USD in the past 30 days and an average transaction cost of less than 0.005 USD. The data shows that Persistence has established 121 channels with 44 other regions in the Interchain network, demonstrating its high interconnectivity.

Currently, 74.7% of the network tokens ($XPRT) are in a staked status, a high staking rate reflecting the network's high security and participation. The annualized yield for staking is 16.7%. The infrastructure of Persistence consists of 6 nodes and 100 validators, jointly ensuring 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, including 616 IBC transactions. There were 932 active addresses, of which 86 were IBC active addresses. It is noteworthy that IBC inflows have consistently exceeded outflows, 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 the CosmWasm framework can operate across chains via IBC, providing convenient, secure, and efficient technical support for liquid staking.

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

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

liquid staking

In the Cosmos ecosystem, liquid staking involves two roles: validators and delegators. Stakers (i.e., delegators) can choose the validator nodes to delegate to when staking. Validators are responsible for running hardware and blockchain applications based on the Cosmos SDK, reaching consensus with other validators, and proposing and validating new blocks on the chain.

If a validator exhibits negative behavior, the delegators of its node will be subject to corresponding penalties. For example, if the validator is unexpectedly or maliciously offline for an extended period, the delegator's stake will be destroyed or reduced by 0.1%. If the validator engages in extremely malicious behavior, such as double-signing violations, the stake will be reduced by 5%.

It can be seen that the liquid staking of the Cosmos ecosystem prevents malicious behavior through economic incentives and potential penalties. Validators and delegators share responsibilities to maintain network efficiency and security, while receiving corresponding 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 they are on to proceed with staking. After staking is completed, the pSTAKE protocol will issue corresponding staking rights tokens to the user's wallet, for example, staking ATOM will yield stkATOM.

An important feature of pSTAKE is automatic compounding. Taking stkATOM as an example, users' daily staking rewards (ATOM) are automatically staked, continuing to earn rewards. This means that the amount of staked ATOM corresponding to each stkATOM will gradually increase, allowing users to receive more ATOM when they unstake. Therefore, users' staking rewards are reflected in the growth of the stkATOM/ATOM ratio.

In terms of unstaking, users need to wait 21 to 25 days; alternatively, they can pay a 1% fee for a flash unstake. When users retrieve their stake, the corresponding stk assets will be destroyed.

stake derivatives

Persistence and the Cosmos ecosystem have launched more stk asset derivatives. For instance, in certain DEX products, users can directly swap stkATOM for ATOM without the need to unstake or pay additional fees. Furthermore, the combination of stk assets with native assets can also add liquidity in DEXs, yielding higher returns.

$XPRT stake

As an independent blockchain, Persistence also requires staking to enhance network security. Users can easily stake $XPRT on the official Persistence platform or certain wallets.

stake security

Persistence and pSTAKE are both open-source programs, which is one of the important guarantees of their security. The pSTAKE program has 72 developers involved in its development, with the most recent code commit made two days ago.

In addition, Persistence and pSTAKE collaborate with multiple security agencies to provide comprehensive support for the security of staking and liquid staking. These security agencies include well-known blockchain and crypto security audit firms, global security research and consulting companies, smart contract security audit agencies, DeFi vulnerability bounty platforms, and blockchain security real-time monitoring and alert networks.

Re-staking

The Persistence team is building Restaking infrastructure in Cosmos that allows users to deposit liquid staking tokens (such as stkATOM, stTIA, stkDYDX, etc.) into Persistence. This enables users to restake their assets and secure additional chains while earning extra rewards.

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

Re-stake Alliance

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

Re-stake the alliance to share staking rewards, and the stakers of various assets distribute the rewards according to the reward weight of the assets. The reward weight of $XRPT is 1, while the reward weights of other assets are determined and adjusted through decentralized governance.

This staking asset alliance reward distribution mechanism forms 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.

Source of re-staking income

The tokens that users use for re-staking will be locked and natively minted in proportion, with the minted native tokens entering the staking module to be staked to validators in the role of a delegator. For example, the stkATOM and stTIA staked by users will be locked in the re-staking module on the Persistence chain and will be minted proportionally as $XPRT. These $XPRT will be staked to validators, and the staking rewards obtained will be distributed to stakers of stkATOM, stTIA, and others.

Summary

Persistence provides an effective and secure economic infrastructure for liquid staking and restaking in the Cosmos ecosystem. Through its liquid staking product, Persistence is gradually deepening its influence in the Cosmos ecosystem, bringing greater security, asset liquidity, and ecosystem participation.

Through an innovative re-staking program, Persistence has established an economic alliance for re-stakers. This alliance forms a cross-chain community of interests among re-stakers, which not only enhances mutual security but also improves the level of decentralization within the re-staking alliance of the Cosmos ecosystem.