Secure Your Blockchain with Cosmos’ Liquid Staking Tokens

In the Brief:

  • New Cosmos chain will use liquid staking tokens from other networks for security
  • Liquid staking is a top DeFi protocol category
  • Restaking derivatives to earn rewards
  • Initial assets include Ether, BNB, Cosmos, Solana, and Polygon

2 - 4 minute read

A new blockchain called “Tenet” is set to launch a mainnet version soon, according to an announcement from the developers on May 3rd. Based on the Cosmos blockchain, Tenet will use liquid staking coins from other networks to secure its transactions. By doing so, it could potentially inherit the security of older networks and ensure the long-term security of the Tenet chain by leveraging the joint security of each ecosystem it services.

Liquid staking protocols have become the largest decentralized finance (DeFi) protocol category, with platforms such as Lido, Rocket Pool, and Ankr allowing users to stake their coins with a network of validators and receive rewards without having to run their own nodes. These protocols also provide users with tokens called “liquid staking derivatives,” or LSDs, redeemable for the underlying deposits and rewards.

Tenet will take this concept further by allowing users to “restake” these LSDs to earn additional rewards on its network and providing users with tokens that represent the LSDs themselves. The team calls these third-order tokens “liquid liquid staking derivatives,” or LLSDs. LLSDs will be usable in lending apps and decentralized exchanges throughout the Tenet network.

At launch, the protocol is expected to allow liquid staking derivatives of Ether (ETH), BNB, Cosmos (ATOM), Solana (SOL), and Polygon (MATIC) to be restaked on Tenet. The new network is being developed by former executives of Ankr and Blockdaemon and is advised by members of the Lido, Ankr, and OpenAI teams.

The use of liquid staking derivatives instead of native coins to secure the network is expected to bring additional liquidity and yield opportunities. Experts have argued that liquid staking may grow in the future as a result of the Ethereum Shanghai upgrade.

The Bottom Line

The launch of Tenet and the use of liquid staking derivatives is an exciting development in the DeFi space. Traders should keep an eye on its progress and consider the potential impact on the assets involved. The use of third-order tokens and the ability to restake LSDs could provide unique opportunities for traders to earn additional rewards and increase liquidity. However, as with any new platform, there are also risks involved, and traders should conduct their due diligence before investing.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

Leave a Reply

Your email address will not be published. Required fields are marked *