Cosmos Liquid Staking Solution pSTAKE: Empowering the Cosmos DeFi Ecosystem with ATOM Staking Derivatives
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Cosmos Liquid Staking Solution pSTAKE: Empowering the Cosmos DeFi Ecosystem with ATOM Staking Derivatives
When stkATOM launched on Ethereum in 2021, pSTAKE became the first liquid staking solution for $ATOM.
Navigating Web3 tides with focused insightsWritten by: Kadeem Clarke
Compiled by: TechFlow
Due to the lack of active DeFi or liquidity in the Cosmos ecosystem, pSTAKE became the first liquid staking solution for $ATOM when stkATOM launched on Ethereum in 2021.
Fast forward to 2023, stkATOM is now returning with a new IBC-native version on the Persistence chain. The mission of stkATOM is to unlock liquidity and empower DeFi through staked $ATOM within the Cosmos ecosystem.
Staking Rewards and DeFi: PoS asset holders often face what's known as the "staking dilemma"—whether to stake their tokens for rewards or use them in DeFi? Those who wish to stake their tokens on PoS blockchains to earn rewards must lock up their funds, while those deploying assets in DeFi give up staking rewards.
Liquid staking solves this dilemma—enabling both staking and DeFi participation via pSTAKE.
How does pSTAKE work?With pSTAKE, you can securely stake your Proof-of-Stake (PoS) assets (e.g., $ATOM) to earn staking rewards and receive a representative token representing the staked underlying asset, known as stkASSETs (e.g., $stkATOM), which can be used to explore additional yield opportunities in DeFi. Currently, pSTAKE supports liquid staking for Binance Chain ($stkBNB), Cosmos ($stkATOM), Persistence ($stkXPRT), and Ethereum ($stkETH).
Performance and Adoption: Since its launch on January 12, approximately 127,000 ATOM (around $1.8 million) has been staked on pSTAKE. By embedding security, user experience, and utility into stkATOM, pSTAKE aims to make stkATOM foundational assets within the Cosmos ecosystem.
The stkATOM Validator Set
Among all liquid staking solutions for $ATOM, stkATOM has the most extensive and active validator set (62 active validators). This is determined by $PSTAKE governance based on parameters such as commission rates, governance participation, uptime, etc.
Any future changes to the delegation mechanism or expansion of the validator set will also be governed by $PSTAKE.
How stkATOM Works
stkATOM follows an exchange rate model that governs the relationship between ATOM and stkATOM—the value of stkATOM increases as ATOM grows due to accumulated staking rewards.
It is non-custodial and leverages Inter-Blockchain Communication (IBC, ICA, ICQ), offering significant opportunities for improved user experience.
Lowest Fees in Interchain Liquid Staking
Another notable advantage of stkATOM is its ultra-low fees: 0% deposit/withdrawal fees, a 5% protocol fee, and a 0.5% instant redemption fee.
This strikes the right balance between being the lowest-cost ATOM liquid staking option in the Interchain and ensuring the sustainability of the pStakeFinance protocol. Any associated fees can be changed at any time via $PSTAKE governance.
Security
Security is pSTAKE’s top priority. stkATOM has already undergone a full audit by Halborn Security. The audit by Oak Security is also in its final stages. pSTAKE will also implement an additional on-chain monitoring mechanism and launch a substantial Immunefi bug bounty program.
Special Features
A standout feature unique to stkATOM is its “instant redemption” capability.
Users can bypass the 21–25 day unlocking period by swapping stkATOM for ATOM on a DEX when protocol liquidity is sufficient. Alternatively, they can use the pSTAKE user interface to instantly redeem ATOM.
Wallets
At launch, stkATOM supports Keplr and Ledger, with more software and hardware wallets like Cosmostation and Leap to be supported soon.
Migration
stkATOM (ERC-20) is migrating to the Persistence chain. As part of the proposed migration, all stkATOM (ERC-20) will be unbonded, and the corresponding stkATOM will be minted on the Persistence chain after a 21-day unbonding period.
The migration tool overcomes user experience barriers by enabling seamless one-click cross-chain migration. All stkATOM (ERC-20) holders will be able to directly claim stkATOM on their Persistence address without losing any staking rewards. The migration tool will also help phase out stkATOM (ERC-20) over time:
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Without migration, the two existing forms of stkATOM would require greater fungibility due to differences in underlying implementations, validator delegations, oversight mechanisms, and more.
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In the absence of migration, the two existing versions of stkATOM would need to maintain higher fungibility due to differences in underlying implementation, validator delegation, supervision mechanisms, and others.
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Migration will resolve the drawbacks of stkATOM (ERC-20) and leverage Cosmos technology stack and its vibrant ecosystem, allowing users a one-click seamless transfer to IBC-native stkATOM.
The migration from stkATOM (ERC-20) to stkATOM will benefit existing users with enhanced user experience, low costs, fast transactions, increased security, IBC interoperability, and greater utility.
Why Use pSTAKE for Liquid Staking Your ATOM?
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Delivers unprecedented yields on ATOM;
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One-click liquid staking for ATOM with wallet support including Keplr and Ledger;
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Audited by Halborn and Oak Security for a secure and reliable experience;
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Lowest fees at just 5%, fast transactions, high rewards, and instant redemption (exclusive to pSTAKE);
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Largest and most active validator set (62 validators) among any liquid staking solution for ATOM.
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