Cosmos Hub Launches Liquid Staking Module, Unlocking Over $400 Million Worth of ATOM Funds
Summary:
Cosmos Hub has implemented a liquid staking module, allowing ATOM holders to bypass the 21-day unbonding period. This upgrade unlocks over $400 million worth of ATOM and enhances staked ATOM presence in Cosmos protocols. The module also enables cancellation of unbondings and mitigates risks through governance-controlled parameters.
The Cosmos Hub, a blockchain within the Cosmos Network, has implemented a liquid staking module that allows users to bypass the previous 21-day unbonding period when unstaking their Cosmos (ATOM) funds. This upgrade offers more flexibility for ATOM holders, who can now use their staked tokens in the Cosmos DeFi ecosystem without sacrificing their staking rewards. Prior to this module, users had to wait for the 21-day period to move their funds after unstaking. The latest version, known as Gaia 12, was launched at 9 am Eastern Time on Sep. 12, at block height 16985500.
Cryptocitos, a pseudonymous Cosmos validator, believes that this liquid staking module will unlock over $400 million worth of ATOM, potentially increasing the presence of staked ATOM in protocols operating on Cosmos. It eliminates the need to choose between staking and DeFi and also allows holders to cancel existing unbondings, enabling their ATOM tokens to be used in regular staking or the liquidity staking module. The upgrade is expected to impact ATOM's inflation rate as well, gradually reducing it to a floor of 7% as the bonded ratio of ATOM increases.
Furthermore, there will be a 25% cap on the total amount of ATOM that can be liquid-staked by holders, and Cosmos Hub has implemented measures to address potential risks associated with liquid staking. This includes the introduction of governance-controlled parameters and a requirement for validators who wish to receive delegations from liquid staking providers to self-bond a certain amount of ATOM.
Published At
9/13/2023 5:11:50 PM
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