Persistence: Build a liquid staking and re-staking architecture for the Cosmos ecosystem

Persistence is one of the first Cosmos application chains to implement IBC, CosmWasm, and the liquid staking module (LSM). By focusing on POS and liquid staking-related products, it has built a comprehensive framework for liquid staking and re-staking within the Cosmos ecosystem.

On December 5, 2023, the Cosmos community voted to allocate 600,000 ATOM to pSTAKE for liquid staking growth. 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 is ( TVL ), reaching 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 has established 121 channels with 44 other zones in the Interchain network, demonstrating a high degree of interconnectivity. 74.7% of the tokens ($XPRT) in the network are in stake, with an annualized yield of 16.7%. A higher staking rate usually indicates that the network has strong security and participation.

The infrastructure of Persistence consists of 6 nodes and 100 validators, 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, among which 616 were IBC transactions. There were 932 active addresses and 86 active IBC addresses. It is worth noting 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 CosmWasm can operate across chains through 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 a solid 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 includes two roles: validators and delegators. The staker ( and the delegator ) can choose the validator node 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, their delegators will face corresponding penalties. For example, if a validator goes offline accidentally or maliciously, the delegator's stake will be reduced by 0.1%. For more serious violations, such as double signing, the stake will be reduced by 5%.

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

pSTAKE stake

pSTAKE provides a simple staking process for the Cosmos ecosystem. Users only need to select the token to stake and the chain they are on to proceed with the staking. After 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.

Automatic Compound Interest

Taking stkATOM as an example, the user's daily staking rewards (ATOM) will automatically enter the stake, continuing to generate rewards. This means that the amount of staked ATOM corresponding to each stkATOM will increase, allowing users to receive more ATOM when they unstake. Therefore, the user's staking rewards are reflected in the increase of the stkATOM/ATOM ratio.

Unstake

Users need to wait 21-25 days when canceling their stake; they can also pay a fee of 1% to perform a lightning unstake. When retrieving the stake, the corresponding stk assets will be destroyed.

stake yield

pSTAKE supports staking of various assets, each with different current yield rates. The estimated annualized compound yield rate is calculated based on the assumption that the daily yield rate remains constant.

Notes

pSTAKE currently supports the following 5 tokens: ATOM from Cosmos Hub, OSMO from the Osmosis chain, DYDX from the dYdX chain, STARS from Stargaze, and HUAHUA from Chihuahua, as well as those minted on the Persistence chain.

When users choose to stake native chain tokens, pSTAKE staking requires two steps: first, cross-chain the assets to the Persistence chain through IBC, and then call the liquidity staking module of the Persistence chain to stake the assets.

Therefore, staking any asset on pSTAKE requires holding a certain amount of the Persistence chain native token $XPRT as GAS fees, but the GAS fees on the Persistence chain are very low.

stake derivatives

Persistence and the Cosmos ecosystem have launched more stk asset derivatives. For example, in certain DEX products, stkATOM can be directly exchanged for ATOM without the need to unstake or pay additional fees. In addition, stk assets can be paired with native assets to provide liquidity in the DEX, yielding higher returns.

$XPRT stake

As an independent blockchain, Persistence also requires staking to enhance network security. Users can conveniently stake $XPRT on the official Persistence platform or certain wallets. After selecting the Persistence network, users can choose the validator nodes they wish to stake $XPRT with.

Stake Security

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

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

Re-staking

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

The Persistence re-staking module supports staking requests for various 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. Alliance is an open-source Cosmos SDK module that enables assets to be staked from one blockchain to another, leveraging inter-chain staking to create mutually beneficial relationships between blockchains.

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

Source of Re-staking Earnings

The tokens used by users for re-staking will be locked and natively minted tokens will be minted proportionally. These minted native tokens will enter the staking module to be staked to the validators in the role of delegator. The staking rewards obtained will then be distributed to the original stakers.

This mechanism is not only a source of income for Persistence's re-staking but also further enhances the security and liquidity of the Cosmos ecosystem.

Summary

Persistence provides an effective 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 within 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 interests. This not only enhances mutual security guarantees but also increases the degree of decentralization within the re-staking alliance of the Cosmos ecosystem.