The Cosmos platform’s developers integrated the liquid staking module into the Cosmos Hub ecosystem’s central blockchain during the network upgrade to version v12.
The v12 upgrade is successfully completed ⚛️
The Liquid Staking Module is live on the Cosmos Hub!
With LSM the Hub unlocks new dynamics within the ATOM Economic Zone.
Users can now directly liquid-stake their already staked #ATOM without waiting for the unbonding period. pic.twitter.com/IdIyr8nsdL
— Cosmos Hub ⚛️ (@cosmoshub) September 13, 2023
The Liquid Staking Module (LSM) enables exchanging ATOM tokens staked through validators for liquid assets stATOM and stkATOM. Users do not need to unlock the coins or wait for the two-week unbonding period.
LSM allows users to continue earning passive income and to additionally use stATOM and stkATOM as capital in DeFi protocols across the Cosmos ecosystem.
The team noted that, to reduce risk, the amount of tokens in liquid staking is capped at 25% of the total coins staked by validators. In the future, the limit may be changed via governance decision.
The Leap Cosmos wallet developers noted that LSM will make ATOM staking more profitable, attract additional tokens and increase the bonding ratio. This will reduce the coin’s inflation and make it \”more utilitarian by nature,\” they emphasised.
well, with LSM enabling easier liquid staking, more ATOM gets bonded for staking, increasing the bonding ratio ↑
as the bonding ratio increases, the ATOM inflation rate goes down, making the token more utilitarian in nature!
⚛️ ?
— Leap Cosmos ⚛️ (@leap_cosmos) September 13, 2023
LSM has already been integrated by projects such as Stride, pSTAKE Finance and Quicksilver Protocol.
As previously reported, the latter attracted funding from the staking company Chorus One, while Binance Labs invested in pSTAKE.