pSTAKE: Empowering the Cosmos DeFi ecosystem through ATOM staking tokens
When stkATOM was launched on Ethereum in 2021, pSTAKE became the first liquid staking solution for $ATOM.Original Title: Persistence Staking On Atom
Original Author: Kadeem Clarke
Compiled by: Deep Tide TechFlow
Due to the lack of active DeFi or liquidity in the Cosmos ecosystem, when stkATOM was launched on Ethereum in 2021, pSTAKE became the first liquid staking solution for $ATOM.
Fast forward to 2023, stkATOM is now back with a new IBC-native version on the Persistence chain. The mission of stkATOM is to unlock liquidity and empower DeFi to stake $ATOM within the Cosmos ecosystem.
Staking Rewards and DeFi: PoS asset holders often face the so-called staking dilemma—whether to stake their tokens or use them in DeFi? Those who wish to stake tokens on PoS blockchains for rewards must lock up their funds, while those deploying assets in DeFi forgo staking rewards.
Liquid staking solves this dilemma, allowing staking and DeFi through pSTAKE.
How Does pSTAKE Work? Through pSTAKE, you can securely stake your Proof-of-Stake (PoS) assets (e.g., $ATOM) to earn staking rewards and receive a representative token of the staked asset, called 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 (about $1.8 million) has been staked on Pstake. By embedding security, user experience, and utility into stkATOM, pSTAKE aims to make them foundational assets in the Cosmos ecosystem.
Validator Set of stkATOM
stkATOM has the most extensive active validator set (62 launch validators) among all liquid staking solutions for $ATOM. This is determined by $PSTAKE governance based on parameters such as commission, governance participation, and uptime.
Any future changes to the delegation mechanism and expansion of the validator set will also be decided by $PSTAKE governance.
Operation of stkATOM
stkATOM follows an exchange rate model that drives the relationship between ATOM and stkATOM, with the value of stkATOM increasing as ATOM increases due to the accumulation of staking rewards.
It is non-custodial and utilizes the Inter-Blockchain Communication (IBC, ICA, ICQ), providing numerous opportunities for improved user experience.
Minimum Fees for Interchain Liquid Staking
Another significant advantage of stkATOM is its ultra-low fees: 0% deposit/withdrawal fees, 5% protocol fees, and 0.5% instant redemption fees.
This strikes the right balance between the lowest ATOM liquid staking fees in the Interchain and the sustainability of the pStakeFinance protocol. Any related fees can be changed at any time through $PSTAKE governance.
Security
Security is the top priority for pSTAKE. stkATOM has undergone a comprehensive audit by Halborn Security. An audit by Oak Security is also in its final stages. pSTAKE will also implement an additional on-chain tracking mechanism and create a substantial Immunefi bug bounty.
Special Features
Notably, stkATOM has a unique "instant redemption" feature.
Users with sufficient protocol liquidity can avoid the 21-25 day unlocking period by swapping stkATOM for ATOM on a DEX. Instead, they can use the pSTAKE user interface to instantly redeem ATOM.
Wallets
stkATOM supports Keplr and Ledger at launch, with plans to support more software and hardware wallets like Cosmostation, Leap, and others soon.
Migration
stkATOM (ERC-20) is migrating to the Persistence chain. As part of the proposed migration, all stkATOM (ERC-20) will be unbound, while the corresponding stkATOM will be minted on the Persistence chain after a 21-day unbinding period.
The migration tool overcomes user experience barriers with a one-click seamless 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:
Without migration, the two existing stkATOM will require more fungibility due to differences in underlying implementations, validator delegations, governance mechanisms, etc.
Without migration, the two existing stkATOM will require greater fungibility due to differences in underlying implementations, validator delegations, governance mechanisms, etc.
The migration will address the shortcomings of stkATOM (ERC-20) and leverage the Cosmos tech stack and vibrant ecosystem to provide users with a one-click seamless transition to the native stkATOM on IBC.
The migration from stkATOM (ERC-20) to stkATOM will benefit existing users, including improved user experience, low costs and fast transactions, enhanced security, IBC interoperability, and utility.
Why Use pSTAKE to Stake ATOM?
Brings unprecedented ATOM yields;
One-click liquid staking for ATOM supporting wallets like Keplr and Ledger;
Security audits by Halborn and Oak Security ensure a safe and reliable experience;
Minimum 5% fees, fast transactions, high rewards, and instant redemption (available only on pSTAKE);
The most extensive and active validator set among any liquid staking solutions for ATOM (62 validators).
