Persistence 2023 Liquid Staking Roadmap Update

The Appchain for Liquid Staked Tokens (LSTs)

A hub is best defined as the effective center of activity. Persistence has embarked on a journey of becoming the center of activity for liquid staking in recent years. From pioneering a liquid staking solution for ATOM with pSTAKE to evolving into an appchain for liquid staked tokens–native issuance of & DeFi for LSTs, this journey so far can be best described in a single word: ‘Persistence’. Persistence Labs & the community continue to persist in bringing the vision of being a one-stop-shop for liquid staking to life.

With $17.32B in TVL, Liquid Staking is now the #2 DeFi category on DeFiLlama. It has seen exponential growth and adoption in the last two years and is primed to be at the forefront of DeFi in 2023 and beyond. Most of this has been driven by Ethereum and the Shapella upgrade. But the Core-1 team believes that Cosmos and other major ecosystems, such as the BNB Chain, have immense untapped potential & a huge role to play in LSTs becoming the most popular DeFi asset class.

A quick look at Persistence today

• Enabling CosmWasm in Aug’22 for LST-focused dApps to deploy on the chain
• Further decentralizing the chain from Nov’22 to create a robust liquid staking playground
• Kickstarting TVL on-chain with the IBC native launch of pSTAKE in Jan’23
• Dexter’s launch spurring DeFi in Mar’23
• Expanding to 25 IBC peers in Apr’23 to facilitate DeFi for LSTs in Cosmos

What’s next for Persistence

With the basic building blocks for a thriving liquid staking economy coming into place, the Core-1 team believes that the focus should now shift to three key aspects: On-chain Traction, Expanding the Ecosystem, and Bolstering Infrastructure. The 2023 roadmap mentioned below dives into individual points under these three aspects for the next few months and how each benefits Persistence & its various stakeholders, all powered by XPRT.

1. On-chain Traction

Potential Partner chain for Replicated Security

Replicated Security is a new shared security model in which the Cosmos Hub will rent its security to partner chains. This gives birth to the ATOM Economic Zone (AEZ), an ATOM-aligned ecosystem for economic value creation, including the LSM on the Cosmos Hub. Onboarding as a partner chain will give the Persistence Core-1 chain a boost of ~80X in terms of Economic Security. The Core-1 team believes that adopting Replicated Security will help Persistence enter and eventually become a big part of this AEZ alongside others like Neutron & Stride. In the coming weeks, the Core-1 team will work with Informal Systems & others in Cosmos to evaluate the best way to be a partner chain and discuss that with fellow Persisters & Cosmonauts through various public forums.

Support for LSM (Liquid Staking Module, built by Iqlusion)

The LSM is a module built to empower use cases for natively staked tokens. Persistence aims to be the first chain to enable the LSM and be the playground for the entire Cosmos to test its novel benefits. With the LSM on the Core-1 chain, stake delegators can perform transactions that were impossible before, like moving staked tokens between wallets or converting their native stake to liquid stake. The LSM will benefit the eventual launch of stkXPRT by pSTAKE, allowing already staked XPRT to be converted into liquid staked stkXPRT without going through the 21-day unbonding period. The Core-1 team will also contribute to bringing the LSM to the Cosmos Hub (planned for Q3 2023). The LSM was added to the Persistence Core-1 testnet on Monday, 24th April 2023.

Add Oracle with price-feeder

An Oracle connects blockchains to external systems and enables decision-making for existing contract logic based on these data inputs. Besides providing essential price data feeds, the Oracle will also filter & authenticate the integrity of the information crucial for executing specific contracts in a decentralized manner, such as Dexter’s Metastable pool and Bamboo’s Borrowing/Lending mechanisms. Over time, the Oracle will also become a revenue generator for XPRT validators & the chain itself. For reference, 40% of the blocks produced by Umee, a money market app chain in Cosmos with 20 listed assets, contain 95+ txns each related to the Oracle. The Oracle was added to the Persistence Core-1 testnet on Monday, 24th April 2023.

MEV-capture with Skip Protocol

The Core-1 team believes that a sovereign MEV solution will ensure maximum value capture & minimum value leakage when it comes to MEV on the chain. Skip Protocol is creating modular tools that give the app chain complete control over transaction ordering and inclusion rules. For example, let’s assume Dexter has a $100 arbitrage opportunity. Instead of an MEV bot extracting this value, Skip’s Proto-Rev module on the Persistence Core-1 chain can extract this value to be distributed to XPRT stakers finally. On-chain MEV will increase with the increase in on-chain activity (thanks to pSTAKE, Dexter, Bamboo, & other dApps in the future), resulting in a new source of yield for XPRT stakers. Over $7M in MEV has been extracted from Osmosis in 2 years since its genesis. Integrating with Skip will allow more value to be extracted and distributed to XPRT stakers.

Native $USDC on Persistence

Stablecoins like USDC are one of the best examples of product-market fit in Crypto, with a total market cap of $130.73B. Stablecoins in Cosmos have majorly been decentralized CDP-based like $CMST, $SILK, or bridged like $axlUSDC & $gravUSDC. However, Noble, a general asset issuance chain in Cosmos, is bringing native $USDC to Cosmos. For comparison, ecosystems like Solana, Polygon, and Arbitrum all have $1B+ in native stablecoin liquidity. The Core-1 team will look to collaborate with Noble to utilize cosmos-native $USDC for ecosystem dApps such as Dexter & Bamboo.

New dApps #BuiltOnPersistence

Earlier in Q1 2023, the Bamboo team came out of stealth with their vision of creating a borrowing/lending protocol for LSTs. Bamboo is still under development & is expected to go live in the coming months. Another external team has started to develop a vault product around liquid staking on the Core-1 chain. If you or someone you know is interested in building exciting use cases for LSTs on Persistence, please contact the Core-1 team here.

2. Expanding the Liquid Staking Ecosystem

Bring non-cosmos native LSTs to Persistence

The Core-1 team will work closely with the pSTAKE team to bring EVM-based stkASSETs issued by the pSTAKE protocol (like stkBNB & stkETH) to the Core-1 chain in partnership with bridge/interoperability protocols like Axelar. This will further cement Persistence as the center of liquid staking activity.

Enhance the Core-1 chain’s security

The Core-1 team believes the Persistence Core-1 chain will become the center of liquid staking activity. Hence, expanding to as many security avenues as possible is in the chain’s best interest. In line with that, the Core-1 team will actively explore and consider the different options available in Cosmos today–Replicated Security, Babylon’s Bitcoin Security, & Mesh Security. This will improve the chain’s security significantly and open a new dimension of economic dialogue–imagine an appchain for liquid staked tokens secured by the Cosmos Hub, Bitcoin-grade security & other chains in Cosmos. The Core-1 chain is already live on Babylon’s testnet as of April ‘23.

Revamp $XPRT Tokenomics

Various community members have recently voiced their opinion and made a case for revamping the $XPRT tokenomics considering the increased on-chain activity & the upcoming XPRT halvening. The Core-1 team is working closely with Persisters in driving this community initiative by opening a direct dialogue & collating various ideas. In the coming months, community members will take this discussion public on the Persistence Forum, followed by a consequent on-chain governance proposal.

Enable IBC v6

IBC v6 will allow dApps such as pSTAKE to scale to more Cosmos native stkASSETs seamlessly. Expansion of pSTAKE to support other IBC-enabled chains will further increase on-chain activity by resulting in more txns, chain TVL, & IBC volume with Persistence’s peers. IBC v6 will also enable Fee Middleware, an on-chain mechanism to fund relayers for Persistence’s IBC connections to scale sustainably.

Improve CosmWasm Dev Tooling

The Core-1 chain is a semi-permissioned CosmWasm-enabled chain. This requires the Core-1 team to work closely while onboarding external teams like Dexter. By improving dev tooling for CosmWasm, onboarding & deployment of external projects will become more efficient. The first example here is an ongoing discussion with the Celatone team.

Welcome Ledger Live

The Core-1 team will work closely with the Ledger team for $XPRT wallet integration into Ledger Live. Native support for XPRT on Ledger will create a safer way of storing keys. Besides that, dApps deployed on the Core-1 chain, such as pSTAKE and Dexter, are also expected to be supported by Ledger Live, creating better avenues for onboarding new users into the Persistence Ecosystem.

3. Bolstering Infrastructure

Bump to cosmos-sdk v47

Upgrading the Core-1 chain to v47 will bring various performance and functionality benefits, including CometBFT & ABCI1.0 (in-depth details here). Besides that, it will enable working with Skip Protocol on its latest version of in-protocol MEV capture.

Other add-ons: Group module, PFM, IBC Wasm Hooks

Group module will allow the creation and management of on-chain multisig accounts and configurable decision policies, making it easier for users to manage their tokens while enabling more front-end use cases for wallet management. It will complement a multisig tool built using CosmWasm.
PFM or Packet Forward Middleware will make it possible to route incoming packets from the source chain to the destination chain by solving for token fungibility across the Interchain.
IBC Wasm Hooks is a middleware that will allow cross-chain contract calls involving token movement (enabling Squid Router for cross-chain swaps on Persistence).

Increase Performance Monitoring

Conclusion