Persistence – cosmos app chain for Liquid Staking DeFi (LSTfi)

Background

The Persistence Ecosystem has grown and adapted to the multiple troughs and crests of the crypto industry. The roots of Persistence were born out of being early supporters of Proof of Stake (PoS) and firm believers in the app-chain thesis in 2019. What started as building for RWAs (real world assets) at a time that was too early for any significant PMF, led to a vision that was, again, ahead of its time, but something too exciting to ignore: Liquid Staking.

Today, Persistence is an app chain for Liquid Staking DeFi (or LSTfi —Liquid Staking Token finance) built on the Cosmos tech stack. The vision for Persistence is niched and hyper-focused on building a decentralized liquid staking economy.

Imagine a world of secure PoS blockchains and flourishing DeFi. That world needs liquid staking. Liquid Staking solves the PoS dilemma: to stake tokens or to use them in DeFi. An LST (liquid staked token) is a liquid receipt of the underlying staked token that can be used in DeFi. We foresee a future where LSTs will become the predominant medium of exchange and utility in DeFi (over native tokens). That is the future Persistence is building towards. A future where LSTs of multiple leading PoS chains like Cosmos Hub, dYdX, Osmosis, and Celestia are not only issued on Persistence but have widespread adoption on DeFi applications like Decentralized Exchanges, Money Markets, Perpetuals, Options and more. 

The Persistence LSTfi Ecosystem

Persistence Core-1 Chain 

App chains give sovereignty and customizability, vital for Persistence’s niched liquid staking vision. The Persistence core-1 chain is one of Cosmos’s most technically advanced app chains, with XPRT as its native token. 100 reputed validators, run nodes on Persistence, participate in block production and governance, and provide world-class infrastructure for liquid staking to thrive. Bridges like Gravity, pBridge, and Axelar connect Persistence to the EVM world.

Various Cosmos SDK modules enable the Persistence chain to build a robust infrastructure optimized for Cosmos LSTfi.

• Inter Blockchain Communication Protocol (IBC) connects Persistence to 43 app chains in Cosmos for communication and secure cross-chain transfers.
• Interchain Accounts (ICA)
• le composability between Persistence’s IBC-connected chains with cross-chain transactions.
• CometBFT PoS consensus gives short block times and instant finality to handle the transaction demand on Persistence while keeping the chain secure.
• CosmWasm is a secure smart contract platform that enables dApps to deploy on Persistence in a fast, semi-permissioned, and interoperable manner.
• Liquid Staking Module (LSM) allows for niched LSTfi applications like transferring staked XPRT tokens between wallets and converting staked XPRT to liquid staked XPRT without the 21-day unbonding wait in the future.
• Upcoming Integration with Skip’s Block SDK enabling flexibility to set improved gas rules for the on-chain dApps catalysing enhanced adoption. 

All of the above vital components and numerous other tweaks (thanks to the customizability of app chains) of the Persistence core-1 chain thrive liquid staking development.

Persistence LSTfi Ecosystem Products and Traction

As of publishing this blog the Persistence core-1 chain has a TVL of ~$8.5M, thanks to ecosystem dApps pSTAKE Finance and Dexter.

pSTAKE Finance (LST Issuance on the Core-1 chain)

pSTAKE is a liquid staking protocol developed by Persistence Labs. With pSTAKE, you can securely stake PoS assets like ATOM, OSMO, and BNB to earn staking rewards and receive staked underlying representative tokens (stkTokens) to explore additional yield opportunities across DeFi

• pSTAKE launched the first ever ATOM liquid staking solution (stkATOM ERC-20 on Ethereum) in 2021 that reached ~$35M+ TVL
• pSTAKE launched BNB liquid staking with stkBNB in August 2022
• stkATOM was launched natively in Cosmos on the Persistence Core-1 chain in January 2023 and currently has ~$6.8M TVL with 7 DeFi integrations 
• stkOSMO was recently launched (on 6th Dec 2023) with a new decentralized and automated stake delegation strategy that delegates the stake to 75 Osmosis validators
• Post its expansion to Cosmos and Osmosis, pSTAKE is on track to expand its liquid staking support to DYDX, Persistence (XPRT), and Celestia (TIA) in the coming months

The Persistence core-1 chain is the home of pSTAKE in Cosmos and provides economic security through XPRT and all the technical support required for LST issuance. pSTAKE Finance is governed by the PSTAKE token.

pSTAKE and Persistence work harmoniously and complement each other by facilitating LST issuance as the bedrock of the decentralized liquid staking economy on Persistence. 

Dexter (LST Liquidity)

Dexter is a decentralized exchange (DEX) built on the Persistence Core-1 chain in a joint effort between Persistence Labs and several external contributors. Dexter’s mission is to be the liquidity hub on Persistence for LSTs issued by pSTAKE and other value-added tokens. 

• Brings the best AMM (automated market-making) mechanisms inspired by Balancer and Curve Finance to Persistence 
• Optimized for building liquidity and efficient trading of yield-generating tokens like LSTs with its Metastable Pools
• One of the best USDC and USDT stablecoin swap rates in Cosmos with its Stableswap Pools
• Since its launch in March 2023, Dexter has onboarded 3,000+ traders and liquidity providers to Persistence and generated ~$6.5M+ volume and $17k+ swap fees
• Dexter has ~$5M+ TVL currently with 6 pools
  • ATOM/stkATOM
  • ATOM/XPRT
  • PSTAKE/XPRT
  • USDC/USDT
  • USDT/XPRT
  • DYDX/USDC
• Tradooor Rebate Program to incentivize LST trading (stkATOM) on Persistence
• Cosmos’ top DEX aggregators like TFM, Squid (powered by Axelar), and Skip and Borrowing Lending Protocols like Nolus and Umee will soon leverage Dexter’s liquidity for efficient trading and liquidations
• Dexter will launch an Instant LP Unbonding feature soon to improve user experience    

Dexter does not have its own token. Instead, Dexter relies on the XPRT token for sovereignty and traction, aligning and tying closely with the Persistence LSTfi Ecosystem.

Dexter brings liquidity, users, and on-chain activity to Persistence. Persistence provides economic security (staked XPRT), governance support(Dexter is governed by XPRT), and traction (XPRT incentivization) to Dexter.

XPRT Utility

XPRT is the native token of the Persistence Core-1 chain. XPRT launched in April 2021 following a first-of-its-kind StakeDrop Campaign that saw the locking of hundreds of millions of dollars worth of assets from 4 different chains to receive XPRT. (Fun fact: Persistence pivoted to its LSTfi vision based on the demand seen for yield on staked (locked) tokens during StakeDrop)

XPRT is a multipurpose inflationary token that plays various roles in the Persistence LSTfi ecosystem:

Chain Security

The Persistence core-1 chain uses CometBFT consensus based on Delegated Proof of Stake that involves network participants like stakers and validators to stake XPRT for block production and validation in return for XPRT rewards. The XPRT bonded ratio (% of token supply that is staked) defines the economic security of the Persistence. Historically, the Persistence core-1 chain has maintained a ~75%+ bonded ratio, one of the highest among all PoS chains in crypto. 

Decentralized LSTfi Governance

XPRT stakers and validators have the final say on chain upgrades, ecosystem dApp improvements, network parameter changes such as minimum or maximum inflation, XPRT community pool spend, and more via on-chain voting. Key community-led initiatives like the launches of pSTAKE and Dexter, XPRT inflation reduction, Liquidity Bootsrapping Incentives, and Dexter’s decision to never launch its token to align with Persistence have showcased the strength of XPRT governance.

On-chain LSTfi Traction

XPRT is also a significant enabler for traction within the ecosystem. For example, XPRT has become the base asset on Dexter, and LP Incentivization on Dexter through XPRT

has mainly been successful, with significant milestones achieved in a short time. Following Dexter’s footsteps, any dApps deployed on Persistence in the future can build with XPRT taking center stage.

Pay for transaction fees on the Persistence Core-1 chain

On average, the Persistence core-1 chain processes ~5,000+ transactions (related to XPRT staking, IBC transfers, liquid staking on pSTAKE, trading, and LPing on Dexter. etc.) with ~1,100+ daily active accounts. On-chain activity may require XPRT for transaction fees.

Persistence Network Economics 

XPRT Inflation

XPRT, like most other Cosmos app chains’ native token, is an inflationary token to uphold chain security and block validation by incentivizing network stakeholders to participate in XPRT staking (21-day lockup period) in return for staking rewards. XPRT staking rewards currently comprise XPRT inflation and XPRT from transaction fees. In the future, ecosystem dApps may share revenue with XPRT stakers, a decision that the XPRT governance can take. Currently, 90% of XPRT inflation is distributed as staking rewards, and the remaining 10% goes to the XPRT Community Pool.  

XPRT inflation is variable and based on specific on-chain parameters (governed by XPRT) like 

• Minimum Inflation 
• Maximum Inflation 
• Inflation Rate Change (how fast inflation changes)
• Target Bonded (target % of total supply to be staked)
• Halving (happens ~ every 2 years)
• Block Time

XPRT inflation gradually decreases to the minimum value if the bonded ratio exceeds the target bonded, and vice-versa. Less XPRT staked -> More XPRT Inflation -> More XPRT Staking Rewards. This mechanism directly links XPRT inflation and chain security, maintaining the target bonded ratio.

At Genesis, the inflation was set to 35% with minimum inflation 25% and maximum inflation 45% for a target 67% bonded ratio. XPRT inflation halving happens every 2 years after the first year since Genesis. This gives a soft maximum supply cap of ~403M XPRT that would be reached by 2035.

The first XPRT inflation halving was scheduled for August 2023. However, the XPRT inflation halving was brought forward to May 2023 by the Persistence Community due to a skewed block time (6s) caused by a more decentralized validator set, chain upgrade, and on-chain dApp activity. With future inflation halving every two years, the issuance of XPRT would keep reducing with more dApp activity on the chain, thus creating a soft max supply of XPRT, which would be variable but substantially less than 403M. 

Since Genesis in April 2021, the XPRT inflation has reduced by ~60.45%.

XPRT Token Release

100M XPRT were minted at Genesis in April 2021 and distributed across various categories like Validator Incentivization, Private Sale, Team, Ecosystem Growth, and more. 96.9% of the 100M tokens have already been released, with the final unlock of the remaining 3.1M tokens in March 2024. 

XPRT Network Decentralization 

The Persistence core-1 chain is one of the most decentralized PoS chains. Here are some insights

• The minimum number of validators that would need to agree to disrupt regular network operation (Nakamoto coefficient) is 10, one of the highest in Cosmos. 
• 21,370+ unique delegates stake an average of ~4,400 XPRT
• 94.72% of the total stakers stake less than 10,000 XPRT, indicating widespread stakeholder reach
• Persistence has an Observatory Decentralization Score of 82, the 2nd highest in Cosmos. 

What sets the Persistence LSTfi Ecosystem apart?

Cosmos and Vision

Being one of the OG app chains, Persistence is deeply routed in Cosmos’ IBC world. The ecosystem has been tirelessly building since 2019, whether participating in the launch of Cosmos Hub, being one of the first chains to enable IBC, introducing ATOM liquid staking, and most recently, building Cosmos LSTfi from the ground up. Persistence’s vision is simple, long-term, and scalable. Persistence aims to be a one-stop shop for Cosmos LSTfi.  It is pretty evident from the EVM world that liquid staking and LSTfi have Product Market Fit. LSTfi in Cosmos is yet to mature, and Persistence is well-positioned to capture any boom.

The app chain thesis reaching mass market adoption is not competition for Persistence but rather a huge opportunity. As more chains like dYdX and Celestia come to life in the IBC world, Persistence’s addressable market for Cosmos LSTfi will only increase. pSTAKE will continue to expand the issuance of LSTs. Dexter will continue to build liquidity for these LSTs. New users from new ecosystems will be onboarded, and on-chain activity and TVL will increase, creating a booming decentralized LSTfi economy.

Staking AND DeFi will never run out of fashion.

Persistence LSTfi User Experience

dApps like pSTAKE and Dexter are very different from each other in terms of their purpose, technical architecture, governance, etc. However, they have one thing in common, one uniting force. They are both #BuiltOnPersistence. What differentiates Persistence from its competitors is what it stands for–liquid staking AND more, LSTfi. Being built on the same underlying layer 1 chain optimized for liquid staking, pSTAKE and Dexter offer an LSTfi user experience like no other. For example, liquid staking ATOM on pSTAKE and providing stkATOM liquidity on Dexter requires jumping between the two front ends and no other complex IBC transactions and multiple steps.

In the future, LSTfi on Persistence may come under one roof with an LSTfi super app that provides access to all LSTfi primitives on Persistence (and possibly also outside Persistence within Cosmos through IBC) at the touch of a single click.  

Persistence’s long-term belief in Cosmos and IBC, its app chain sovereignty, and its ability to build customized, niched liquid staking applications will bring its decentralized LSTfi economy vision to life.

About Persistence

Persistence is a cosmos app chain for LSTfi (liquid staking finance) with the issuance of & DeFi for LSTs.

The Persistence core-1 chain hosts pSTAKE Finance–a multi-chain liquid staking protocol for issuing LSTs that allows users to earn staking rewards while participating in DeFi primitives, and Dexter–the Interchain DEX for yield-generating assets like LSTs.

Persistence aims to offer a one-stop shop for liquid staking for PoS (Proof-of-Stake) users and enable developers to build innovative applications around LSTs.

Become a Persister today!

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