Persistence has been relentlessly building since 2019 whether participating in the launch of Cosmos Hub, hosting first ever stakedrop campaign for the Cosmos ecosystem, being among the first set of chains to enable IBC, or introducing the first liquid staking solution for ATOM.
From being a concept in 2020 to center stage in 2022, liquid staking has seen rapid growth, and at Persistence, we pioneered in developing liquid staking for the Cosmos ecosystem.
At the start of 2022, Persistence set itself on the journey of becoming the liquid staking hub for the PoS ecosystem. Our previous blog shared more about the progress over the last three quarters.
With pSTAKE’s imminent launch on the Persistence Core-1 chain, liquid-staked assets will be natively issued, such as stkATOM, stkXPRT, stkOSMO, and stkJUNO in the Persistence ecosystem, and bootstrap the economy around stkASSETs. Essentially, pSTAKE will sit on the Persistence Core-1 chain as an asset issuance layer.
The stkASSETs will be utilized in multiple DeFi primitives focused on use cases around yield-bearing assets such as liquid-staked assets allowing the users to unlock the liquidity of their staked assets and maximize their capital efficiency.
Shaping the Liquid Staking Hub
The Liquid Staking Module and Interchain Security drive the Cosmos ecosystem towards rapid growth and present a unique opportunity to create a whole ecosystem around liquid-staked assets.
The Persistence ecosystem has been shaping to facilitate the end-to-end journey for PoS users – liquid-staked asset issuance to deployment into DeFi. Components of the Persistence ecosystem:
Persistence Core Chain: The Persistence Core Chain comprises Persistence SDK with modules focused on liquid staking such as stkATOM and price oracles, Interchain modules such as ICA, ICQ powered by IBC, and Cosmwasm. The Core Chain is designed to be a specialized layer-1 for liquid-staked assets.
Liquid Staking Protocols: On top of the Persistence Core chain sits the liquid-staked assets issuance layer powered by protocols such as pSTAKE Finance which allows users to stake their PoS assets (e.g., ATOM, XPRT, OSMO, etc.) and issues liquid-staked representative tokens (e.g., stkATOM, stkXPRT, stkOSMO). Over time the Persistence ecosystem will have liquid-staked assets from multiple protocols such as Stride, Quicksilver, Lido, etc.
DeFi primitives focused on Liquid-staked: The yield-bearing assets like liquid-staked assets come with challenges and opportunities when used in DeFi. Applications specifically focused on liquid-staked assets maximize the capital efficiency of these assets. Interchain DEX, Money Markets, and DeFi Options Vault are some of the applications on which teams in the Persistence ecosystem are working. These applications will be powered by liquid-staked assets such as stkATOM, stJUNO, qSTAR, etc.
Some interesting use cases being worked upon include minimal impermanent loss, variable swap fees, meta-stable swaps, self-repaying loans, and instant redemption pools.
IBC Transactions: The most significant advantage of being part of the Cosmos ecosystem is the ability to interact with multiple niche ecosystems using IBC. With the growing ecosystem, there will be a lot of economic value exchange between the Persistence ecosystem and the other Cosmos-based chains such as Cosmos Hub, Osmosis, Juno, Kujira, etc. Some of the evident IBC flows:
- stkATOM (issued by pSTAKE on the Persistence Core Chain) to be utilized as collateral for USK (Kujira’s stablecoin)
- XPRT pools on interchain DEXs (Osmosis, JunoSwap, Crescent)
- Persistence ecosystem apps (DEX, Money Markets, etc.) leveraging liquid-staked assets issued by Stride, Lido, and Quicksilver
Cross-chain Transactions: We envision the Persistence ecosystem to be the one-stop platform for interacting with the broader PoS ecosystem. Over time, we may bridge liquid-staked assets such as stkBNB and stkETH to create a more substantial value inflow to the Persistence ecosystem. We have partnered with Axelar (for bridging ETH, USDC, DAI, etc.) and Gravity (supporting bridge for PSTAKE token) to achieve cross-chain compatibility.
XPRT: XPRT sits at the heart of the Persistence ecosystem. In addition to securing the network, participating in governance, and paying transaction fees, XPRT will be used as the base asset in the Persistence ecosystem dapps.
Multiple models are being discussed to drive more utility and functionality for XPRT benefitting the stakers and holders (XPRT 2.0 coming soon).
Propelling the Liquid Staking Economy
Becoming the liquid staking hub of the PoS economy is an exciting yet challenging mission. And we realize that to reach there, we need to evolve the current operational structure to allow new stakeholders to enter and engage within the ecosystem.
We believe the next phase of growth for the ecosystem will be fueled by having stakeholders like validators, independent builders, and community members engage actively with each other. We also understand the need for an unbiased body focusing on the welfare of XPRT holders and stakers and supporting the engagement and development of individual stakeholders within the ecosystem.
With the above thoughts in mind, the below diagram exhibits our vision for the ecosystem:
Each stakeholder in the ecosystem has a specific mandate for overall growth and development. Some initial thoughts:
- The Persistence Foundation
- An unbiased body acting in the best interest of XPRT holders and stakers and positioned to support all stakeholders interacting with XPRT and the Persistence Core chain
- Focused on fostering a flourishing liquid staking ecosystem through the Foundation Grants Program
- Enhance the security of the Persistence Core by encouraging new and existing validators to maintain high-quality operations via the Foundation Delegation Program
- Drive research and development for the Persistence Core chain and manage the associated intellectual property (IP) previously owned by Persistence Labs
- Promote XPRT utility and functionality through educational and community initiatives
- Persistence Labs
- Build the products, toolings, and reference implementation as seen fit to further the expansion of the Persistence ecosystem
- A service provider supporting and/or incubating project teams to build and scale their solutions within the ecosystem
- Interact with other labs/validators/developers across the industry to build and/or support exciting use cases for liquid-staked assets
- Lead the maintenance and development efforts for the Persistence Core Chain
- Evangelize adoption of Persistence public goods and XPRT
- A community of high-performing node operators for the Persistence Core chain ensuring the security and uptime
- Develop the tools necessary for smooth validator operations, such as monitoring and public nodes
- Promote network decentralization and actively drive the governance
- Contribute the best practices from the interchain space to the Persistence ecosystem
- Safeguard the interests and opinions of the XPRT stakers
- Persistence DAO
- A DAO focused on helping ecosystem projects bootstrap traction through the flow of incentives and work with the foundation to drive grants program
- Operate independently to evaluate the best opportunities to allocate incentives based on community feedback
- It also helps educate the community about available opportunities and ways to leverage them
- Community DAO
- A DAO focused on driving community initiatives such as education, events, bounties
- Drive the marketing and awareness campaigns for expanding the Persistence community
- Moderate the communications and social channels of the Persistence community
- Support the onboarding of new users/investors to the Persistence ecosystem
- Ecosystem Fund
- Support upcoming ecosystem project teams through investments and advisory
- Attract well-established applications to build use cases for assets issued on the Persistence Core chain, including XPRT
- Establish incubators to nurture developers/builders for the Cosmos and Persistence ecosystem
- Operate on research-driven investment theses around interchain and liquid-staking
We understand that the above structure would have the addition/omission of one or more elements, with the function of each component also subject to change based on the community’s feedback and alignment across stakeholders.
That being said, we are excited for the first step towards the above-envisioned stage by announcing the Persistence Foundation and Persistence Labs.
Over the last two years, the Persistence team has built foundational developments that have positioned the ecosystem to scale exponentially from this point.
Infrastructure robustness, strong staker community, institutional support (exchanges, on-ramps/off-ramps, custody solutions), high-performing validator set, and interchain composability are some critical components that have been figured out or are in the final stages.
To further accelerate the growth following things are being put in motion:
- Persistence Labs is working with independent teams to develop more use cases for stkASSETs and tooling for Persistence Core Chain.
- Winding down foundation nodes to decentralize the Persistence core chain further. The stake from Foundation Nodes is to be distributed among the most active validators.
- Rolling out the DAOs for involving the community and major stakeholders in developing the Persistence ecosystem.
- Working with major stakeholders and institutions to launch Ecosystem Fund to support and enable builders to develop within the Persistence ecosystem.
Persistence is a Tendermint-based, specialized Layer-1 network powering an ecosystem of DeFi applications focused on unlocking the liquidity of staked assets. Persistence facilitates the issuance and deployment of liquid-staked assets, allowing users to earn staking rewards while participating in DeFi primitives, such as lending/borrowing and liquidity provisioning on DEXs.
Persistence aims to offer a seamless staking and DeFi experience for PoS (Proof-of-Stake) users and enable developers to build innovative applications around stkASSETs.