New Cosmos chain will use liquid staking tokens from other networks for security

A caller Cosmos-based blockchain called “Tenet'' volition usage liquid staking coins from different networks to unafraid its transactions, perchance allowing the caller web to inherit the information of older ones, according to a May 3 announcement from the developers. 

The web is presently disposable arsenic a testnet and volition motorboat a mainnet mentation arsenic soon arsenic investigating is complete. This comes aft liquid staking has precocious go the largest decentralized concern (DeFi) protocol category.

Liquid staking protocols specified arsenic Lido, Rocket Pool and Ankr let users to involvement their coins with a web of validators and person rewards without having to tally their ain nodes. These protocols besides supply users with tokens called “liquid staking derivatives,” oregon LSDs, redeemable for the underlying deposits and rewards.

According to the announcement, Tenet volition let users to “restake” these LSDs to gain further rewards connected its network. And it volition supply users with tokens that correspond the LSDs themselves. The squad calls these third-order tokens “liquid liquid staking derivatives,” oregon LLSDs. LLSDs volition beryllium usable successful lending apps and decentralized exchanges passim the Tenet network, the announcement said.

The squad expects determination to beryllium 2 halfway benefits to utilizing LSDs alternatively of a autochthonal coin to unafraid the network. First, it “ensures the semipermanent information of the Tenet concatenation by leveraging the associated information of each [layer 1] ecosystem it services.” Second, it should “bring further liquidity and output opportunities to LSDs.”

Related: Ethereum ‘re-staking’ protocol EigenLayer launches connected testnet

At launch, the protocol is expected to let liquid staking derivatives of Ether (ETH), BNB (BNB), Cosmos (ATOM), Solana (SOL) and Polygon (MATIC) to beryllium restaked connected Tenet.

The caller web is being developed by erstwhile executives of Ankr and Blockdaemon and is advised by members of the Lido, Ankr and OpenAI teams.

Liquid staking protocols person existed since 2020 erstwhile Lido was archetypal launched. They grew successful popularity successful 2022 and aboriginal 2023 arsenic the Ethereum web implemented a determination to proof-of-stake and began to let staking withdrawals. On May 1, crypto analytics level DefiLlama announced that liquid staking had go the apical class of DeFi apps erstwhile measured by full worth locked.

Some experts person argued that liquid staking may turn successful the future arsenic a effect of the Ethereum Shanghai upgrade.