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Persistence: Innovations, expansions, and breakthroughs in the Cosmos of liquid staking

February 23, 2024

In conclusion

Persistence One: Innovations, Expansions, and Breakthroughs in the Cosmos of Liquid Staking

Introduction

Staking is back in the limelight, all thanks to EigenLayer and the concept of restaking. It’s all the buzz on CT, encapsulating people with the unique idea of utilising Ethereum’s shared trust network to power other protocols. In essence, EigenLayer provides a mechanism that will allow various blockchains and service providers within the Ethereum ecosystem, such as oracles, data availability solutions, bridges, indexers - anything that requires Ethereum’s decentralised validation network, to consume its economic security.

The intent is to take Ethereum’s underlying trust network and supply it to these varied services. As you can imagine, a whole ecosystem in the form of LST Restaking, Liquid Restaking Tokens (LRTs), and LRTfi is brewing around this fascinating development. Between native ETH restaking via EigenPod on the Beacon chain, restaking popular LSTs such as stETH, swETH, and rETH, and acquiring LRTs such as eETH, rsETH, and ezETH, the protocol has amassed a respectable TVL of ~$1.7B in a matter of months. With a few Actively Validated Services (AVS) slated to go live on mainnet soon, ETH restakers will start generating an additional yield on top of the staking returns.

Source: DefiLlama

Anyway, that’s enough about Ethereum. The point is people are interested in staking and now ‘restaking’ their crypto. Another ecosystem that’s building on the bleeding edge and promises to disrupt the staking game is Cosmos. Within Cosmos, Persistence is leading the charge - building the liquid staking economy or should we say, liquid (re)staking!

So let's briefly explore the intriguing world of Persistence One, a layer 1 marvel within the Cosmos ecosystem, on a bold mission to amp up liquid staking yields like never before.

Picture this: You're in the Cosmos universe, where Persistence stands as a robust app chain. It's a sophisticated and secure infrastructure, purpose-built for certain dApps. These dApps don't play small; they're here to construct an entire economy revolving around liquid staking). Let me tell you, LSTfi in Cosmos is a sleeping giant, and Persistence is positioned right there, ready to ride the wave of its awakening.

Now, let's talk vision, because Persistence One isn't just building for today. They're envisioning a future where Proof of Stake (PoS) isn't just a part of the crypto conversation; it is THE conversation. Imagine a world where secure PoS blockchains and a thriving DeFi ecosystem coexist in harmony. That's the world Persistence is working towards. They see PoS as the fixed-income instrument of the crypto realm, providing stability and predictability in a landscape often characterized by volatility and unpredictability.

But why Cosmos, you ask? Persistence is betting big on the app chain thesis within the broader ecosystem. They don't see the burgeoning growth of app chains as competition, far from it, they see a golden opportunity. More chains mean more LSTs, and more LSTs mean a richer, more diverse LSTfi environment. A win-win situation for all involved.

The main consumers for security on Cosmos are the app-chains. With such a vast interconnected system, liquid staking and restaking makes perfect sense. It enhances security for the cosmos ecosystem, it increases the value of other assets within the Cosmos and Persistence ecosystem, it paves the way for the creation of new sectors (LRTfi for example), and it increases rewards for users as liquid staking plus restaking makes it a dual reward system. 

So, there you have it – Persistence, a force in the Cosmos, not just playing the game but changing it. 

If you’re interested in diving further, be sure to check out our in-depth protocol focus here. However, for today's agenda, I want to explore the current ecosystem outlook, shed a spotlight on the tokens in the ecosystem, discuss the distinctive features of Persistence, highlight the future roadmap, and cover the upcoming developments. Let’s get cracking.

Current Ecosystem Overview: Protocols & Tokens

pSTAKE Finance: Innovating Liquid Staking in Cosmos

Persistence's pSTAKE Finance is making significant strides as a Cosmos-centric Liquid Staking Token (LST) issuance protocol. It's a revolution in DeFi, allowing users to actively participate in staking rewards while engaging in DeFi activities. Here's what's buzzing:

  • Traction in Numbers: With a Total Value Locked (TVL) exceeding $10 million, pSTAKE is on a growth trajectory. It currently supports ATOM, OSMO, DYDX, and BNB liquid staking, with XPRT liquid staking lined up next. The  Liquid Staking Mechanism (LSM) supported on pSTAKE (for ATOM) allows for instant conversion of staked ATOM to stkATOM, demonstrating both flexibility and efficiency.
  • DeFi Collaborations: The platform boasts over 10 DeFi partners like Dexter, Astroport (Neutron), Mars Protocol, Shade, Nolus, Umee, and Osmosis, creating a vibrant ecosystem across Cosmos. Notably, Dexter plays a pivotal role here.
  • Technical Superiority: pSTAKE isn't just another LST provider. It's unique with its 'Flash Unstake' feature, which is a game-changer for liquidity. The protocol's automated validator delegation and rebalancing strategy emphasizes network decentralization, bolstering network security and integrity. Plus, the Immunefi bug bounty program showcases its commitment to security.

Dexter: The Liquidity Hub Enhancing Trading Efficiency

Dexter is the native DEX on Persistence One, a cornerstone in the Persistence ecosystem. It stands out as a liquidity hub, enhancing capital efficiency and offering diverse yield opportunities. Here's what makes Dexter a standout player:

  • Liquidity and Trading: Dexter's innovative approach brings together the best Automated Market Making (AMM) mechanisms. This ensures superior trading efficiency across various token types, including LSTs (like stkATOM), stablecoins (USDC, USDT), and others (DYDX, PSTAKE, XPRT).
  • Stablecoin Efficiency: In the Cosmos ecosystem, Dexter offers one of the most efficient stablecoin swap rates, thanks to its Stableswap Pools. This not only adds to its appeal but also drives utility and volume.
  • User Experience: Dexter goes beyond just trading. The Tradooor Rebate Program for stkATOM trades and the Instant LP Unbonding feature speak volumes about its user-centric approach.
  • Ecosystem Synergy: Interestingly, Dexter doesn't have its own token; it leverages XPRT. This creates a symbiotic relationship where Dexter contributes to liquidity, user engagement, and on-chain activity, while Persistence provides the economic security and governance support.

Dexter's Value Addition to Persistence

The relationship between Dexter and Persistence is symbiotic and strategic. Dexter acts as a catalyst in the Persistence ecosystem, driving liquidity and user activity, which are crucial for any blockchain's success. By aligning closely with the Persistence LSTfi ecosystem and relying on XPRT for sovereignty, Dexter is a pivotal component of the broader Persistence vision.

Persistence: A Technical Powerhouse in LSTfi

Persistence stands out as one of the most technically advanced chains, particularly in the Liquid Staking Tokens and finance (LSTfi) niche. Its alignment with the ATOM Economic Zone and the Cosmos Hub through Prop 853,3, emphasizing stkATOM Hub POL on Dexter and integration with Astroport on Neutron, showcases its strategic positioning in the Cosmos ecosystem. The participation in ASTRO wars further underscores its active engagement and strategic expansion.

Now onto the fun bit. 

Tokens in the Ecosystem

Let's dive into the fascinating world of tokens within the Persistence ecosystem. We've got two major players here: XPRT and PSTAKE. Each plays a critical role in maintaining the ecosystem's harmony and functionality. So, buckle up as we explore their intricacies and interrelationships.

XPRT: The Backbone of Layer 1

XPRT - the layer 1 chain’s utility token, is the cornerstone of the Persistence One blockchain's security and governance. Here's how XPRT holds the fort:

Chain Security with Staking

XPRT serves as a staking token. By locking up XPRT, validators and delegators contribute to the network's security. It's a classic proof-of-stake mechanism where your stake is your commitment to the network's health and security.

LSTfi Chain Governance

Governance in blockchain is all about community-driven decisions, and XPRT holders are at the forefront of this. They get to vote on crucial decisions affecting the Persistence One chain, shaping the future of the ecosystem. It’s worth noting that XPRT governance has also been adopted by Dexter. 

Traction Support

Here’s where XPRT really shines. It's pivotal in liquidity bootstrapping for the network. Most notably, XPRT is used for incentives on Dexter. As Persistence eyes the horizon for new dApps and varied use cases, XPRT will be the catalyst fueling their growth and adoption.

Transaction Fees

Every ecosystem needs its lifeblood, and for Persistence, it's the transaction fees paid in XPRT. These fees ensure smooth operations and incentivize validators, keeping the ecosystem thriving and efficient. However, for a better user experience, Persistence One also supports tokens such as stkATOM, stkDYDX, DYDX, and USDC to pay for transaction fees. 

PSTAKE: The Governance Powerhouse

Now, let's shift gears to PSTAKE, the governance token of the LST issuance protocol. PSTAKE is the voice and vote of the community in the pSTAKE protocol.

pSTAKE Protocol Governance

PSTAKE holders are the decision-makers. They propose, debate, and vote on protocol changes, steering the course of pSTAKE’s development. It's democracy in action, blockchain style!

stkTokens Incentivisation

One of the coolest aspects of PSTAKE is how it incentivizes stkTokens. These tokens represent staked assets and are a key feature of the protocol, providing liquidity while still earning staking rewards. PSTAKE holders get to decide how these stkTokens are used and incentivized, making them a crucial part of the liquidity strategy.

The Symbiotic Relationship: XPRT and PSTAKE

Think of XPRT and PSTAKE as two celestial bodies in a binary star system – distinct, yet their orbits are interlinked, each adding value to the other. This relationship is akin to that of Osmosis and Milkyway in the broader crypto universe.

XPRT provides the foundational layer, the bedrock upon which the ecosystem is built. In contrast, PSTAKE is the dynamic force driving governance and innovation in the pSTAKE protocol. Together, they create a balanced and forward-moving ecosystem where security, governance, liquidity, and innovation coexist and complement each other.

Looking Ahead

As Persistence continues to expand its ecosystem, the roles of XPRT and PSTAKE will evolve with it. Although the roles aren’t clearly defined at this point, It's a dynamic, ever-evolving space, so the possibilities are endless. These tokens are set to be major catalysts for future developments.

Persistence: A Symphony of Innovation and Reliability

Technical Superiority: A Legacy of Firsts

Persistence One is a pioneer in the blockchain arena. Their journey began early, giving them deep-rooted expertise and insight into the ecosystem. Here’s why their technical edge matters:

  • Pioneering App Chains: They’re one of the inaugural app chains, demonstrating their foresight and knack for innovation.
  • Inter-Blockchain Communication (IBC) Trailblazers: Among the first to enable IBC, they’ve been instrumental in fostering interconnectedness in the Cosmos ecosystem.
  • Liquid Staking on Cosmos: A first for Cosmos, the Liquid Staking Mechanism (LSM) is a testament to their commitment to pushing the boundaries. They were the first to offer ATOM liquid staking back in 2021 and had $35M+ in TVL.
  • Security First Approach: Persistence One and any other Dapps in the ecosystem only get launched after multiple audits and rigorous security testing to ensure maximum safety for users. 

Ecosystem: A Hub for Cross-Pollination and Enhanced UX

Persistence believes in creating a robust and diverse ecosystem that caters to a wide range of users:

  • Versatility in Applications: The platform harmoniously integrates Modular and CosmWasm dApps, offering versatility and broad appeal.
  • Liquid Staking and Beyond: Liquid staking is just the tip of the iceberg. Persistence provides a plethora of services that enhance user experience and utility.
  • Cross-Pollination of User Bases: The ecosystem attracts a diverse user base, leading to a rich cross-pollination of ideas and usage scenarios.
  • Optimized Yield Strategies: Combining pSTAKE and Dexter, along with other integrations, they offer enhanced yields in the Cosmos ecosystem.

Core Values: The Pillars of Persistence

Persistence’s ethos is not just about cultivating values that last:

  • Build, Ship, Improve, Repeat: Their mantra is simple - create, deliver, refine. They’re in a constant cycle of innovation and improvement.
  • Foundational Values: Humility, integrity, patience, and of course, persistence, are the cornerstones of their approach.
  • Long-Term Vision with Short-Term Execution: They strategize for the future while ensuring excellence in their immediate actions.

So what’s next? Well, it’s a complete UX overhaul with the 1-click LSTfi breakthrough coming to fruition – thanks to the ‘Super App’.

The Super App Thesis

Exploring the super app thesis in the context of Persistence reveals a sophisticated, multi-layered approach to LST and DeFi infrastructure. Here's a breakdown of how Persistence embodies the super app concept, especially focusing on user experience (UX), liquid staking yield aggregation, and auto-compounding strategies:

User Experience (UX) and One-Click Liquid Staking (LSTfi)

Persistence aims to create a seamless, user-friendly experience, especially in the realm of liquid staking. It proposes a unified front-end interface where users can access various DeFi services like liquid staking (via pSTAKE), trading or liquidity provision (via Dexter), and staking (on Persistence). 

The concept of a 'super app' in this context is about integrating multiple DeFi services into a single platform, making it convenient for users to engage in various activities like staking, trading, and liquidity provision without needing to navigate multiple platforms. This approach not only simplifies the process but also potentially increases participation due to the ease of use.

Liquid Staking Yield Aggregation

Persistence, particularly in its advanced version (v2), aims to provide users with access to liquid staking yields not just within the Persistence ecosystem but also from other networks facilitated by background Inter-Blockchain Communication (IBC) transactions. This aggregation of yields from different sources into one platform can provide users with a diverse range of staking options and potentially optimize their returns.

Auto-Compounding Strategies

One specific strategy involves the auto-compounding of stkDYDX. Here, the stkDYDX staking rewards (denominated in USDC) are automatically swapped for DYDX on Dexter, which is then re-staked to compound returns. 

In future, through advancements on Persistence One, users may be able  deposit USDC or USDT to mint any pSTAKE tokens. This could work if there is an infrastructure that potentially automates the conversion process (e.g., USDC -> USDT -> XPRT -> ATOM) to mint stkATOM in the background. This process exemplifies the super app thesis by automating complex staking and swapping operations, thus simplifying the user experience.

info: https://twitter.com/PandeyMikhil/status/1746893315901981067?s=20

The Road Ahead for Persistence: Expanding Horizons and Fortifying Security

Securing the Future

As we look forward to what's next for Persistence, their focus on enhancing security is paramount. They're exploring groundbreaking security including Restaking, Bitcoin Security by Babylon, and closely monitoring developments in Mesh and Opt-in Interchain security. Additionally, to ensure the utmost safety for the community, they have robust regular security practices in place. 

Apart from enhancing security, staking with persistence is going to be a key point of emphasis. 

Restaking has well and truly taken off on Ethereum with EigenLayer, but it is yet to take off on Cosmos where the DPoS system can be leveraged. To bring the vast and vibrant ecosystem of Cosmos closer together, Persistence One will be creating the restaking infrastructure for the chain. This will be done in partnership with some of the other big players, such as Stride, Quicksilver, and Milkyway. 

Expansion Plan for pSTAKE 

stkDYDX Launch

  • stkDYDX is currently live
  • The pool has $190k in liquidity and is offering a 101% APR. So hurry!
  • stkDYDX has launched with an initial 0% fee with no-click auto-compounding of USDC rewards from dYdX. 
  • A stkDYDX metastable pool has been launched on Dexter with 300k PSTAKE put up as incentives for the first month. 
  • It is custom-built for the dYdX chain. When DYDX is liquid staked, it is automatically distributed to over 50% of validators on the chain, and DEXs like Dexter and Flash Unstake will always be liquid so users can swap from stkDYDX to DYDX in a flash. 

stkXPRT and Superfluid LP Launch

  • In addition to the native liquid staking of the XPRT token, the introduction of stkXPRT will allow users to convert their natively staked XPRT into stkXPRT/XPRT liquidity positions on Dexter with a single click. 
  • This feature is part of pSTAKE's broader strategy to enhance liquidity and user experience.

Broadening the Reach of stkATOM

  • pSTAKE is expanding stkATOM's presence across various platforms:
  • Integration with chains like Neutron and Dapps like Astroport, Mars, Apollo, Amulet, Quasar, Ghost, etc. 
  • Using USK as collateral on Kujira and IST on Agoric. 
  • Launching a perpetuals market on Levana.

New stkATOM Validator Delegation Strategy

  • Aimed at optimizing decentralization on the Cosmos Hub. 
  • Expanding the validator set (currently at 62 validators). 
  • Implementing a transparent, data-driven stake delegation strategy.
  • Daily calculations of validator weights.

Strategic Partnerships

  • Partnership with Sade Protocol for community-owned liquidity. There will be $300k in shared liquidity between XPRT and SHD. 
  • Focusing on including stkATOM (and other LSTs) in airdrops through partnerships with new projects. This is big, anon!
  • Enhancing the utility and reach of stkATOM in the broader crypto ecosystem.

Expansion Plan for Dexter

Passive Trading

  • To enhance swap efficiency, Dexter plans to integrate with renowned DEX aggregators, like Skip, ibc.fun, Squid, and TFM.
  • To ensure deep liquidity, Dexter is integrating with top borrow/lend protocols, including Mars, Umee, and Nolus.

Newer Pools for LSTs

  • Dexter intends to launch new liquidity pools for upcoming LSTs, including stkXPRT/XPRT,  XPRT/SHD, and more. 

Conclusion

In summarising the remarkable journey of Persistence One, it's crucial to acknowledge the transformative impact it has had within the Cosmos ecosystem. A beacon of innovation and growth, Persistence stands out for its ambition and technological prowess. Its journey, marked by resilience and forward-thinking, has been pivotal in transcending conventional blockchain functionalities.

Persistence One's evolution is characterized by its commitment to interoperability and its role in enhancing the Cosmos ecosystem, setting new standards in user experience and LSTfi. As we look ahead to the rest of 2024, the anticipation surrounding Persistence's upcoming developments is immense. It looks to follow in the footsteps of EigenLayer and become the main hub for restaking on Cosmos. Persistence One hopes to not only further fortify cosmos app-chains with their restaking primitive but also bring rewards to users. 

In essence, Persistence's journey is a testament to the power of vision, innovation, and community synergy. As it continues to break new ground, the potential for far-reaching impact in the blockchain universe is undeniable. Persistence is a harbinger of a revolutionary era in blockchain technology, driving unprecedented possibilities and innovation within the Cosmos ecosystem and beyond.

Resources

Website: https://persistence.one/

X/Twitter: https://twitter.com/PersistenceOne

Docs: https://docs.persistence.one/

Blog: https://blog.persistence.one/

Governance Forum: https://forum.persistence.one/

pSTAKE Finance: https://pstake.finance/

Dexter: https://app.dexter.zone/

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