A brand new Cosmos-based blockchain referred to as “Tenet” will use liquid staking cash from different networks to safe its transactions, probably permitting the brand new community to inherit the safety of older ones, based on a Might 3 announcement from the builders.
The community is presently out there as a testnet and can launch a mainnet model as quickly as testing is full. This comes after liquid staking has not too long ago turn out to be the most important decentralized finance (DeFi) protocol class.
Liquid staking protocols comparable to Lido, Rocket Pool and Ankr permit customers to stake their cash with a community of validators and obtain rewards with out having to run their very own nodes. These protocols additionally present customers with tokens referred to as “liquid staking derivatives,” or LSDs, redeemable for the underlying deposits and rewards.
In line with the announcement, Tenet will permit customers to “restake” these LSDs to earn extra rewards on its community. And it’ll present customers with tokens that symbolize the LSDs themselves. The workforce calls these third-order tokens “liquid liquid staking derivatives,” or LLSDs. LLSDs shall be usable in lending apps and decentralized exchanges all through the Tenet community, the announcement stated.
The workforce expects there to be two core advantages to utilizing LSDs as a substitute of a local coin to safe the community. First, it “ensures the long-term safety of the Tenet chain by leveraging the joint safety of every [layer 1] ecosystem it providers.” Second, it ought to “deliver extra liquidity and yield alternatives to LSDs.”
Associated: Ethereum ‘re-staking’ protocol EigenLayer launches on testnet
At launch, the protocol is anticipated to permit liquid staking derivatives of Ether (ETH), BNB (BNB), Cosmos (ATOM), Solana (SOL) and Polygon (MATIC) to be restaked on Tenet.
The brand new community is being developed by former executives of Ankr and Blockdaemon and is suggested by members of the Lido, Ankr and OpenAI groups.
Liquid staking protocols have existed since 2020 when Lido was first launched. They grew in reputation in 2022 and early 2023 because the Ethereum community applied a transfer to proof-of-stake and started to permit staking withdrawals. On Might 1, crypto analytics platform DefiLlama introduced that liquid staking had turn out to be the highest class of DeFi apps when measured by complete worth locked.
Some specialists have argued that liquid staking could develop sooner or later on account of the Ethereum Shanghai improve.
