Published: February 21, 2024
Persistence One is a purpose-built Layer-1 blockchain built on the open-source Tendermint framework, with a primary focus on maximizing Proof-of-Stake yield with liquid staking and restaking. The project aims to establish itself as a prominent liquid staking hub, providing an efficient bridge between staking and DeFi activities. $XPRT is the native token of the chain, used for staking to secure the network and governance purposes.
Persistence’s core mission is to enable a seamless and capital-efficient experience for users of PoS networks and holders of their respective Liquid Staking Tokens (LSTs). It is a cosmos application-specific chain that provides a secure and robust infrastructure for dApps to build an economy around liquid staked tokens (LSTs).
The end goal is to unlock the liquidity of staked assets on the Cosmos ecosystem, allowing users to get a liquid representation of their staking positions and use it as a yield-bearing asset across DeFi (e.g. providing liquidity on DEXs, using as collateral to borrow assets on money markets…).
Furthermore, Persistence is also aiming to increase the security of its chain through restaking. This is achieved by allowing LST holders to restake their assets and earn additional rewards. These LSTs could be from various Cosmos-based tokens such as $ATOM, $TIA, $DYDX, among others, and are supported by platforms like pSTAKE, Stride, Quicksilver, and Milkyway. Once deposited, these LSTs are restaked on the Persistence Core-1 chain, making users eligible to earn additional $XPRT rewards.
By offering core infrastructure for liquid staking and restaking, Persistence aligns the interest of different chains in the Cosmos ecosystem, representing assets in a liquid form, also allowing users to secure multiple chains simultaneously while continuing to participate in DeFi activities with these tokens.
Through the Persistence Core-1 chain, users can issue and deploy liquid-staked assets (stkASSETs) using the pSTAKE protocol. This allows participants to earn staking rewards while actively engaging in various DeFi activities, such as borrowing, lending, and liquidity provision on decentralized exchanges.
The Core-1 chain incorporates CosmWasm, enabling the deployment of decentralized applications (DApps) through smart contracts. This further expands the ecosystem’s capabilities and utility.
As a Layer1 blockchain, the network comprises a series of components, each playing a crucial role in its functionality:
Issuing liquid staking tokens (LSTs) is the main area of expertise and strength of Persistence, allowing token holders in the Cosmos ecosystem to stake their assets while maintaining liquidity.
At its core, liquid staking on Persistence involves the tokenization of staked assets. When users stake their assets, such as $XPRT, the native token of Persistence, they receive liquid staking tokens (LSTs) in return. These LSTs represent the staked assets but remain freely transferable and usable across various DeFi applications. This means that while the original assets are locked in a staking contract contributing to network security and earning staking rewards, holders of LSTs can still trade, lend, or use these tokens in other DeFi protocols.
The process begins when a user decides to stake their tokens through Persistence. The platform locks the user’s tokens and issues an equivalent amount of LSTs, reflecting the staked value. These LSTs, such as pSTAKE’s stkTokens, can be used just like any other token in the ecosystem, providing the token holder with the flexibility to engage in DeFi activities without missing out on the staking rewards that their original assets generate.
An essential feature of liquid staking in Persistence is the integration with the Cosmos ecosystem, which is known for its interoperability and scalability. By participating in liquid staking, users not only support the security and operability of the Persistence network but also contribute to the broader Cosmos ecosystem. This is particularly significant given Cosmos’ architecture, designed to facilitate communication and transaction flow between independent blockchains.
Inspired by Eigenlayer on Ethereum, restaking in Cosmos is a mechanism by which locked tokens and liquid staking tokens (LSTs) can be restaked to secure other services and generate additional rewards. This is especially important in Cosmos given how prevalent appchains are.
Besides the issuance of LSTs, Persistence is also building infrastructure for restaking to enhance chain security, maximize liquid staking yield, and empower liquid restaking tokens (LRTs) on the Cosmos ecosystem.
The Restaking Infrastructure is being developed to allow locked tokens, including Liquid Staked Tokens (LSTs), to be restaked to secure other chains, starting with Persistence Core-1, thereby earning additional staking rewards in $XPRT tokens.
Users will be able to deposit Liquid Staked Tokens (of $ATOM, $TIA, $DYDX, etc.) issued by pSTAKE, Stride, Quicksilver, and Milkyway onto Persistence One to restake them and secure more chains, starting with the Persistence Core-1 chain and earn additional staking rewards.
This mechanism offers benefits like enhanced security, dual rewards, increased utility for Cosmos LSTs, and encouraging long-term holding. Restaking Infrastructure also fosters the development of novel use cases like Liquid Restaked Tokens (LRTs) on Persistence One.
Nonetheless, it is important to note that these additional restaking rewards may have slightly increased risks of slashing, although it is relatively low risk compared to using LSTs in DeFi.
Liquid staking offers yield, and restaking offers trust. Altogether this provides benefits such as:
By virtue of being a Layer1 chain, the Persistence Core-1 Chain can host a variety of applications built on top. These are DeFi applications that allow users to perform various activities, such as exchanging tokens, borrowing and lending…At the time of this writing, two applications stand out: pStake and Dexter.
pSTAKE Finance is a Cosmos-focused LST issuance protocol built on Persistence One that empowers users to earn staking rewards while participating in DeFi. It is a liquid staking protocol where PoS token holders can staker their tokens onto the pStake platform to mint staked derivative assets called stkASSETS.
pStake stakes the underlying deposited PoS tokens with a subset of validators on each of the supported chains, representing the user’s staked position, accruing staking rewards, and allowing users to use stkASSETS in DeFi to generate additional yield. It is one of the few LST issuers that supports an automated delegation strategy, focusing on the decentralization of the network.
For Cosmos-based assets, pStake has built a module on top of the Persistence chain. For other assets ($ETH, $BNB…), the implementations are built on their respective ecosystems.
pStake helps users to maximize the earning potential of their capital. When you stake your assets through pStake, you not only earn staking rewards, but you also gain access to various stkASSET DeFi opportunities. This means you can generate the highest yields while securing the underlying PoS chain – increasing your capital efficiency.
One of the most notable features is that assets staked through pStake are delegated to a set of safe listed validators of the underlying network. These assets are then distributed across multiple validators to minimize slashing risks and optimize for higher staking rewards.
Additionally, stASSETs are fungible in nature, and slashing risks are shared across all pStake users. pStake offers liquidity and instant unbonding, allowing users to skip long unbonding periods by swapping their stASSETS for other assets through liquidity pools on DEXes.
pSTAKE offers a technical architecture constructed using modules deployed on-chain, providing users with stkASSET tokens instantly, ensuring a secure and non-custodial process.
Key features leveraged from the Cosmos SDK include Interchain Accounts (ICA) and Inter-Blockchain Communication (IBC), with rewards compounding daily. Additionally, Interchain Queries (ICQ) are employed when needed to optimize yields through auto-compounding of rewards.
In PoS networks, an epoch represents a specific unit of time that dictates the schedule of events within the network. For stkATOM, a staking epoch equals one day, sometimes referred to as a “day-epoch.” Under the hood, delegation to validators as part of the staking process takes place every day-epoch.
Rather than waiting for 21-25 days to complete the unstaking claim via the standard process, pStake offers instant redemptions, allowing users to immediately access their liquidity. Nonetheless, note that this feature may not always be available and availability is dependent on current market conditions.
Unstaking is resolved through the Liquid Staking Module on the Persistence Chain. Every four days, unstaking requests are grouped and sent as interchain account (ICA) transactions to undelegate tokens from pSTAKE validators. Simultaneously, a corresponding database entry is created and monitored at each block to determine when the 21-day period ends. Once this period concludes, tokens can be returned to users via the claims process. At unstaking maturity, the unstaked tokens are transferred back to the Persistence chain through inter-blockchain communication (IBC). Users can claim these tokens by clicking the claim button and approving the transaction via their wallet interface.
In the worst-case scenario, users can expect unstaking requests to be completed within 25 days – four days for the unstake request to be submitted and an additional 21 days for the unbonding process to conclude.
While you don’t need to take any action to maximize yields on your liquid staked ATOM, pSTAKE’s reward handling mechanism operates diligently behind the scenes. Each day, the pSTAKE rewards address is examined through Interchain Queries (ICQ). The balance is then sent back to the delegation interchain account to be staked in the next block, ensuring your rewards are working to their full potential.
pSTAKE operates by allowing delegators to transition their delegations onto the Cosmos chain under the control of the pSTAKE protocol. In return, it issues stkATOM tokens that represent the user’s stake. These stkATOM tokens essentially serve as a claim to the original native $ATOM assets. When users wish to redeem or unstake their assets, the stkATOM tokens are either instantly redeemed or unstaked for $ATOM.
The exchange rate for staked assets within pSTAKE is primarily determined at the time of deposit. For instance, the number of stkATOM tokens you receive in exchange for your staked $ATOM is based on this rate. When you decide to unstake, the unstaking process considers the delegation strategy and validator weights to ensure a secure and efficient transition of your assets.
pStake’s delegation strategy is designed to optimize yield while safeguarding the security and uptime of the staked assets.
The BNB ecosystems comprise two chains, both featuring a staking module.
BSC allows a total of 42 validators, with the top 21 validators forming the active set and earning transaction fees.
Token holders, including validators, can bond their tokens for staking on BSC. They can delegate their tokens to any validator or validator candidate with the hope of them becoming an actual validator.
Redelegation is allowed but subject to a 7-day waiting period.
pSTAKE offers a liquid staking solution for $BNB holders, allowing them to stake their assets through the BNB staking interface.
Users can unstake their stkBNB, which involves burning the tokens and initiating an unstaking process.
After a 15-day period, users can claim an equivalent amount of $BNB based on the current exchange rate from the pSTAKE application. This 15-day unstaking period ensures the system’s ability to fulfill user claims.
Users can also exit their liquid-staked BNB position by swapping stkBNB for BNB on decentralized exchanges (DEXs), bypassing the 15-day unstaking period.
DEXter is an interchain DEX for yield-bearing assets, such as Liquid Staking Tokens. Built on the Persistence Core-1 blockchain, DEXter v1 brings automated market maker (AMM) mechanisms to the world of yield-generating assets.
Yield-generating assets in DeFi offer users the opportunity to earn passive income by participating in various financial activities. These assets encompass Liquidity Provider (LP) tokens, Liquid Staked Tokens, and Lending Platforms.
Dexter leverages proven AMM mechanisms inspired by DeFi innovations like Uniswap, enabling users to trade assets without the need for a counterparty. Dexter v1 supports various AMM types, including Stableswap Invariant Pools (up to 5 assets, inspired by Curve), Weighted Pools (inspired by Balancer), and Metastable Pools (inspired by Balancer).
A stableswap, as an automated market maker (AMM), is tailored for tokens with similar pricing, offering minimal slippage and efficient liquidity provisioning. While constant product AMMs are adept at price discovery, they face challenges when dealing with closely pegged assets that ideally shouldn’t impact each other’s prices.
Two primary AMM models exist: the constant sum pool (X + Y = K), which is slippage-free but can experience liquidity shortages when imbalanced, and the constant product pool (X * Y = K), which incurs slippage but maintains liquidity by adjusting asset prices with demand.
Stableswap merges the constant product and sum functions, serving as a constant sum when the pool is balanced for low-slippage trades. As the pool becomes imbalanced, it transitions toward a constant state, ensuring sustained liquidity.
Dexter’s implementation of stableswap goes beyond typical AMMs by supporting liquid-staked assets, tightly correlated with the underlying staked assets. This feature enhances the utility of these assets in DeFi, allowing stakers to seamlessly redeem their staked assets by swapping liquid-staked assets into the base asset, exemplified by assets like stkATOM and stATOM with base assets like $ATOM.
Notably, bridges such as Axelar and Gravity are injecting substantial stablecoin liquidity into Cosmos from various ecosystems. The rise of native stablecoins like $IST and $SILK, alongside $USDC’s native presence with Interchain Security on a consumer chain, positions stableswap pools as a pivotal component in the Cosmos DeFi ecosystem.
Dexter doesn’t limit itself to traditional two-token pools. It embraces the complexity of stableswap pools with more than two tokens, akin to Curve’s 3pool. This extends immense liquidity to three highly correlated stablecoins in DeFi – USDT, USDC, and DAI. Dexter’s Stable – 3/5 pools broaden support to 3 to 5 closely correlated assets.
The liquid-staking landscape in Cosmos boasts diversity with major players like pSTAKE, Quicksilver, and Stride. Dexter’s Stable – 3/5 pools actively support liquid-staked assets from these zones, fostering low-slippage trading between assets like stkATOM/stATOM/qATOM.
Dexter will support a custom weighted pool AMM mechanism inspired by Balancer, which allows users to create a custom pool of assets and choose their weightage for each asset, such as pools with 60/40 or 60/20/20 weightage, in contrast to the constant product AMM mechanism, which only offers 50/50 weightage. This pool type supports up to 8 assets in a single pool.
Pools that weigh one token heavily significantly improve impermanent loss to the user compared to 50-50 pools. Impermanent loss is significantly less for highly imbalanced pools like 95/5, but this leads to high slippage due to low liquidity for one of the assets. Weighted pools allow users to customize their exposure to assets and maintain a balance in impermanent loss.
Weighted pools with more than two assets would allow traders to trade multiple combinations of assets on a single pool, saving them the swap fees to be paid on multiple swaps.
A metastable pool is suited for assets that follow an exchange rate with a base asset, like liquid-staked assets such as stkATOM and interest-bearing tokens from lending protocols such as cDAI.
The Stableswap does not consider the constantly changing exchange rate for yield-generating assets and assumes a 1:1 ratio between the tokens. For example, the pool assumes the price of 1 stkATOM = 1 $ATOM, as the value of stkATOM in terms of $ATOM grows, traders can use this incorrect ratio to leach out the yield from the pool while LPs suffer from impermanent loss.
For example, stkATOM would keep accruing yield in the form of staking rewards in $ATOM and would be worth 1.01 $ATOM, 1.02 $ATOM, and so on.
Metastable pools use stable math along with the known exchange rate for the asset. The metastable pool can take this constantly changing exchange rate into account and hence concentrate the liquidity around the price by changing the slope of the flat part (the price of an asset is the slope of the curve at any point) of the curve, making it capital efficient for LPs and trades more precise.
The founding team started building during the bear market of 2019 in the RWA sector, but it turned out to be too early for this niche, which ended up finding some regulatory hurdles. The team of contributors also participated in the development of projects like Game of Stakes and Game of Zones, which helped the Cosmos Hub to go live. This shows how much experience and unique insights they have gained after building in Cosmos for so many years.
Since then, the emergence of DeFi has transformed the financial landscape, providing accessible yield-generating opportunities via blockchain technology. As a layer 1 on Cosmos, Persistence 1 is on a mission to maximize the adoption of liquid staking yield, building an economy that is centered around liquid staking tokens (LSTs).
The vision entails further growth in the thesis for application-specific chains. Increasing market adoption of appchains is not an issue for Persistence, but rather an opportunity to grow the total addressable market, offering liquid staking opportunities for the native tokens of such chains.
Persistence One was also built on the belief that LSTs will eventually replace native assets, enhancing capital efficiency and becoming the predominant medium of exchange and utility in DeFi. When the protocol launched in 2020, it swa hundreds of millions in staked assets. This was the lightbulb moment that proved that users want to earn a yield on locked assets while staying liquid at the same time.
DeFi reached a peak of over $240 billion in Total Value Locked (TVL) across multiple ecosystems in November 2021. Before DeFi’s rise, staking was a popular yet conservative strategy, accumulating nearly $100 billion in global staked value and attracting 6.7 million stakers as of October 27, 2022.
Source: DeFiLlama
Despite the substantial growth in staking, a significant portion of potential TVL and activity remained isolated within the PoS ecosystem. Conversely, the emergence of DeFi revealed the limited utility of staked assets when compared to the vast composability and financial opportunities available in DeFi. This led to a reduction in the attractiveness of staking for securing the blockchain.
Liquid Staking offered a solution to this problem by allowing PoS token holders to simultaneously stake their assets and participate in the DeFi space. Participants in Liquid Staking receive liquid-staked representative tokens, which can be utilized across various DeFi ecosystems. Additionally, they continue to earn rewards from their underlying staked tokens while contributing to the security of the underlying networks.
LSTfi in Cosmos is yet to mature, and Persistence is well-positioned to capture any boom. Persistence and its ecosystem projects were created with a clear value proposition to address the challenges faced by Proof of Stake (PoS) token holders while offering innovative solutions to unlock liquidity and drive mass adoption in the DeFi (Decentralized Finance) ecosystem.
The first challenge was solving the lack of liquidity for staked assets. While staking provides rewards and contributes to network security, it restricts users from accessing their assets for other purposes. pStake solves this problem by creating liquid-staked positions, allowing users to maintain their staking rewards while accessing liquidity.
pSTAKE enables users to generate additional yield on top of the staking rewards they earn from the PoS network. Through the issuance of representative tokens, users can participate in the broader DeFi ecosystem, lending, borrowing, trading, and earning more from their staked assets. This dual-income stream maximizes the return on investment for PoS token holders.
In addition to that, Persistence also embraces a multichain future and supports LSTs across multiple chains (and more will come in the future). This is a key component to enable fixed income in crypto later on.
Persistence’s value proposition lies in its ability to unlock liquidity for staked assets, provide additional yield-generation opportunities, and offer compatibility with the broader DeFi ecosystem. By addressing the liquidity challenges faced by PoS token holders and fostering cross-chain interoperability, it aims to reshape DeFi and drive the adoption of LSTs.
As DeFi continues to gain momentum, liquid staking will play an increasingly important role. DeFi has witnessed explosive growth in recent years, providing a decentralized alternative to traditional financial services. This has led to the emergence of a wide range of applications, including lending, borrowing, decentralized exchanges (DEXs), yield farming, and more.
While DeFi has achieved remarkable success, it is not without its challenges. One significant limitation is the illiquidity of staked assets. When users stake their tokens in PoS networks, they lock them up for extended periods to earn rewards. This lack of liquidity restricts users from actively participating in other DeFi opportunities, causing a conflict of interest for many crypto holders.
Liquid staking solutions, exemplified by Persistence and its ecosystem projects, offer a solution to DeFi’s liquidity challenge. By tokenizing staked assets, users can unlock liquidity while maintaining their staking rewards. This innovation bridges the gap between PoS networks and the broader DeFi ecosystem, creating a seamless experience for crypto holders.
The evolution of blockchain technology and consensus mechanisms has been a journey marked by innovation and adaptation.
The story begins with the creation of Bitcoin, which introduced the world to Proof of Work (PoW). Satoshi Nakamoto’s groundbreaking whitepaper and open-source code laid the foundation for a revolutionary form of “hard money.” Bitcoin, however, lacked the flexibility needed for decentralized applications.
Over the years, PoW networks faced challenges related to scalability, cost efficiency, and environmental sustainability. In response, PoS networks like Persistence and Cosmos gained prominence as viable alternatives. PoS networks offered solutions to these issues and opened new possibilities for decentralized applications.
Cosmos played a crucial role in advancing PoS technology, thanks to Tendermint consensus and the Cosmos SDK. In 2013, PeerCoin became the first cryptocurrency to implement a PoS consensus mechanism. Soon after, Cosmos was born in 2014.
The years 2018 to 2020 witnessed significant development efforts among PoS blockchain teams, including Cosmos, which launched phase 1 of its mainnet in March 2019. On March 30, 2021, Persistence Core-1 Mainnet was launched, with pSTAKE playing a critical role as part of Persistence’s suite of next-generation financial products.
In 2021, stakers can earn passive income by staking PoS assets to secure the respective networks. As time passes, the staking ratio continues to increase across aboard, with liquid staking solutions like pStake addressing the issue of asset illiquidity. These solutions tokenize staked assets, allowing holders to use them in various financial applications, trade them, and even transfer them across different blockchains. This flexibility enables PoS token holders to participate in both staking and DeFi simultaneously.
The primary advantage of liquid staking is that it transforms illiquid staked assets into liquid assets. In traditional staking, assets are locked up for extended periods, often making them inaccessible. Liquid staking, on the other hand, tokenizes these stakes, allowing users to trade and transfer them at will. This liquidity empowers users to respond quickly to market opportunities and diversify their investments.
A second-order effect of the liquidity advantages mentioned above is that liquid staking offers stakers the potential for enhanced yield generation. In traditional staking, returns are typically generated through fixed interest rates. Liquid staking introduces a new dimension by enabling stakers to earn rewards from both the interest generated by their staked assets and additional returns from trading or investing opportunities. One example of this consists in using LSTs as collateral, or lending them to earn the staking APR + the lending APR paid by borrowers.
The flexibility of liquid staking is crucial for investors in DeFi to use their staked assets in DeFi, with the use as collateral being the most prevalent examples. This flexibility is crucial for users looking to leverage their staked assets for lending, borrowing, trading, and other DeFi activities. It eliminates the need to choose between staking and participating in other lucrative DeFi opportunities.
In PoS blockchains, asset holders eager to stake their tokens and earn staking rewards face a unique challenge – the requirement to lock up their capital. This locked capital, known as a delegation, serves as a vital security deposit, ready to be forfeited in the event of a validator’s misconduct.
Staking within the Cosmos ecosystem involves a two-party system: validators and delegators. Validators operate the necessary hardware and a Cosmos SDK-based blockchain application, proposing and validating new blocks in consensus with other validators. To deter validators from misbehavior, delegators pledge capital in the form of the chain’s native staking tokens as a security deposit. In cases of misbehavior, whether accidental or malicious, a penalty is imposed – 0.1% of the staked deposit for persistent downtime and a more severe 5% for double signing violations (when a validator signs more than once for a given block height). This penalty, often referred to as “slashing,” results in the burnt or lost tokens.
In exchange for their security deposits, delegators earn staking rewards proportional to the value of their staked assets for each validated block. Validators, in turn, charge a commission on these rewards for providing their validator services.
To safeguard against specific attack scenarios where validators commit offenses, and either themselves or their delegators can unbond their deposit before the misbehavior is reported, an unbonding period is instituted, typically spanning around three weeks. During this unbonding period, staked assets do not accrue rewards and are returned to the delegator as liquid, unlocked assets upon its conclusion.
Therefore, under most circumstances across Cosmos SDK networks, the maximum amount a user may lose due to slashing for any misconduct is limited to 5 %, preserving nearly 95% of their capital intact.
Liquid staking, as a concept, seeks to address the issue of illiquidity inherent in traditional staking. It presents a mechanism to transform these locked delegations into liquid assets, ready for trading, utilization, or transformation. Often implemented through smart contracts, users deposit their tokens into these contracts, which then delegate to specific validators on behalf of the protocol.
The primary goal of liquid staking is to empower delegators to maintain their staked position while simultaneously allowing them to explore opportunities for the best returns on their capital. This is achieved by minting an asset representative of the native bonded token at the moment of delegation. This new asset can then be employed within DeFi protocols, unlocking additional financial possibilities.
With the widespread adoption of liquid staking, the expectation is that the bonded stake of a chain should converge towards a value close to 100%. This occurs as the liquid version of the underlying token can be freely traded on markets, serving as a substitute for the native asset. In this way, the security of the underlying chain reaches its theoretical maximum while maintaining a liquid supply – the perfect balance between security and liquidity.
The adoption of restaking represents a significant evolution for the Cosmos ecosystem, offering an innovative approach to blockchain security, capital efficiency, and yield generation. This mechanism has the potential to redefine the incentives for token holders within the Proof of Stake (PoS) networks in the Interchain, especially in ecosystems as dynamic and interconnected as Cosmos appchains.
At its core, restaking amplifies the security of any given chain. By allowing staked assets to be re-deployed to secure additional networks, restaking not only diversifies the security mechanisms of individual chains but also strengthens the collective resilience of the interconnected blockchain ecosystem. This is particularly pertinent in the Cosmos ecosystem, where the security of one chain can have ripple effects across others through the Inter-Blockchain Communication (IBC) protocol. By incentivizing the restaking of assets, networks can achieve higher staking ratios, thereby increasing the cost and complexity of potential attacks.
Restaking also offers key advantages in terms of yield generation and capital efficiency. By enabling assets that are already staked to be restaked, token holders can pursue additional yield opportunities without needing to allocate fresh capital. This effectively maximizes the capital efficiency of staked assets, allowing holders to compound their returns by participating in multiple reward-generating activities simultaneously.
The concept of liquid staking—where staked assets are represented by liquid tokens that can be traded or used in DeFi applications—gains an additional layer of utility with restaking. Restaking can facilitate the creation of new financial products and services, such as Liquid Restaking Tokens (LRTs), that further integrate the staking and DeFi ecosystems. This not only enhances the liquidity of staked assets but also opens up novel avenues for yield farming, lending, and borrowing, thereby enriching the DeFi landscape.
pSTAKE, with its innovative approach to liquid staking, is well-positioned to capitalize on the growing opportunities within the Cosmos ecosystem.
As more chains like dYdX and Celestia emerge in the world of Inter-Blockchain Communication (IBC), pSTAKE’s addressable market for Cosmos Liquid Staking Token (LST) issuance continues to expand. The success of liquid staking in the Ethereum Virtual Machine (EVM) world demonstrates that there is a product-market fit for LST in Cosmos. As a result, pSTAKE is set to introduce new stkTokens, including stkDYDX, stkXPRT, and stkTIA.
The alignment between the Cosmos Hub and the Persistence Ecosystem (including pSTAKE) has created a mutually beneficial relationship. The Cosmos Hub benefits from increased ATOM liquid staked assets, enhanced economic activity within the ATOM Economic Zone (AEZ), additional revenue sharing, and more. This synergy strengthens the overall Cosmos ecosystem.
stkAssets, including stkATOM, will play a pivotal role in supporting the Cosmos Hub and AEZ by becoming more integrated into the Neutron DeFi Ecosystem. This integration includes bootstrapping token liquidity on platforms like Astroport and expanding the range of DeFi applications on protocols such as Mars and Nolus.
Additionally, the pSTAKE team is actively exploring new developments and opportunities within the Cosmos Proof-of-Stake (PoS) ecosystem. Projects like Babylon, which introduces BTC staking, demonstrate the commitment to innovation and expanding the ecosystem.
Nevertheless, despite its advantages, the adoption of restaking is not without challenges. These include the complexities of managing risk, particularly the increased exposure to slashing penalties, and the technical and operational hurdles of implementing restaking across different networks with varying protocols and security mechanisms.
LSTFi (Liquid Staking Finance) on Persistence One introduces a novel approach to DeFi (Decentralized Finance) by leveraging the unique capabilities of liquid staking tokens (LSTs). This strategy intertwines the principles of liquid staking with DeFi functionalities, enabling users to maximize their yield through sophisticated financial strategies.
One such strategy is looping, which amplifies the utility and potential returns of staked assets. Looping is an advanced DeFi strategy that involves using liquid-staked tokens as collateral to borrow a native asset, staking the borrowed asset to obtain more LSTs, and repeating the process multiple times. This strategy leverages the liquidity of LSTs to create a leverage effect, increasing the user’s exposure to staking rewards without the need to provide additional capital from their pocket.
This strategy is profitable when the APY from staking is greater than the borrow APY on the money market where the native asset is being borrowed. This enables users to increase their staking rewards by leveraging their initial staked assets. It effectively utilizes the liquidity of LSTs to create a compound yield-generating system, enhancing the capital efficiency of staked assets.
For instance, consider an example where you can use a LST earning a higher APY than the borrow APY. Below you can see a hypothetical scenario on Mars, one of the most popular money markets in Cosmos.
To implement this in practice you would look for the lowest borrow rate in the market. At the time of writing this is offered by Mars Protocol on Neutron. The next steps would be to liquid stake $ATOM with pSTAKE and receive stkATOM in return, deposit stkATOM as collateral in Mars, borrow $ATOM, and repeat the cycle to loop as many times as you want.
The idea is to capture the spread between the staking APY of the LST and the borrow rate. Hence, this strategy is only profitable when the staking APY is greater than the borrow APY. That results in a positive PnL on which you can get leverage by looping. However, note that due to the overcollateralized nature of money markets like Mars the amount that you will be able to borrow will be lower with each loop.
However, note that this strategy also involves higher risks, particularly from the volatility of the underlying assets and potential liquidation if the market moves against the user’s position. Additionally, the costs associated with borrowing (variable interest rates) need to be carefully considered, as they can diminish the overall profitability of the looping strategy.
Because of the interest rate model being used in most money markets, there will be a certain point where it can become incrementally more expensive to borrow a certain amount to engage in leveraged activities. Rates are volatile and based on real-time supply and demand. Therefore, higher leverage increases the likelihood of liquidation if assets decorrelate.
To reduce liquidation risk, users can use highly correlated assets. This correlation between borrow and collateral assets significantly lowers the risk of liquidation. When assets are tightly correlated, such as stkATOM and ATOM trading in lockstep, the chance of liquidation decreases. If the collateral’s value falls, so does the value of the debt, and vice versa. This correlation helps mitigate the risks associated with higher leverage, providing users with a more secure environment for their leveraged positions.
Supported wallets include Keplr and Ledger.
Staking
Before doing a transaction, make sure you have enough $XPRT tokens in your wallet to pay fees for the transactions.
Unstaking
Before doing a transaction, make sure you have enough $XPRT tokens in your wallet to pay fees for the transactions.
There are 2 unstaking options and a claim to complete the whole unstaking flow:
Flash Unstake
pStake is the only LST provider with this feature.
Unstake
Claim
Redeem Instantly
Supported wallets include Metamask, Trust Wallet, Binance Web Wallet, MathWallet and other wallets supported by WalletConnect.
Staking
If you don’t see your stkBNB balance in your wallet, do the following:
Unstaking
Before you start, ensure that you have some BNB in your wallet to pay the gas fees
Swaps can be performed via the following steps.
Proceed to the swap page and connect your wallet. Next, select the tokens and quantity to be swapped from and into. After confirming the transaction, the DEX will attempt to complete your order.
Slippage can be set by depending on the user’s preference, by clicking on the gear button on the top right of the UI.
Users can provide liquidity via the following steps.
Firstly, click on the Pools page and connect your wallet. The page will show any existing pools, as well as all existing pools on Dexter.
Users may choose to deposit their liquidity into an existing pool by clicking on them, or create a new pool.
Clicking on an existing pool will bring them to the information page, and allow users to add or remove liquidity.
Choosing to create your own pool can be done via the UI in a guided process. Note that this functionality is subject to $XPRT governance.
Persistence’s core business revolves around developing and maintaining blockchain infrastructure and protocols built on top.
As a Layer 1 chain, Persistence offers DeFi, specialized on liquid staking and restaking. This service provides liquidity to traditionally illiquid assets and opens up new investment opportunities.
By offering staking services, ecosystem projects like pStake can allow token holders to participate in the network’s consensus mechanism and earn rewards from staking while remaining liquidy. In return for this service, they can then charge a fee on top of the staking rewards.
All fees currently generated from on-chain activity on Persistence One are shared with $XPRT stakers. Staking rewards currently comprise $XPRT inflation and fees from network transactions. In the future, ecosystem dApps may share revenue with $XPRT stakers, subject to governance votes.
When it comes to users, they continue to earn staking rewards plus whatever yield from their use across DeFi (provide liquidity ).
There are transaction fees associated with activity on the Persistence Chain, while its ecosystem projects will generate and share revenue in specific ways depending on their use case. Below you can find the fee split of pStake and DEXter.
As a Layer 1, Persistence charges transaction fees for on-chain activity, such as staking $XPRT, transferring tokens through IBC, using ecosystem dApps…
When you liquid stake your $ATOM through the pSTAKE protocol, your rewards are automatically compounded over time. Just like in traditional staking, validators take a portion of these rewards before they are distributed to users. The rewards are divided into two parts:
Redeem Instantly Fee: There is a nominal charge of 0.5% associated with the Redeem Instantly feature. This fee applies when you choose to instantly redeem your stkATOM for $ATOM.
Additionally, as with any transactions on Cosmos and Persistence chains, there may be transaction fees involved. When you perform staking and unstaking transactions, $ATOM is transferred between the Cosmos and Persistence chains via IBC, which could incur a small transaction fee in $ATOM (typically around 0.01 $ATOM). Moreover, for the staking transaction to be completed after the deposited $ATOM is on the Persistence chain, a nominal fee in $XPRT may also be required.
Users pay 2 types of fees, being transaction and swap fees.
Transaction fees are incurred by any users making a transaction on-chain. These fees are then distributed to $XPRT stakers as rewards.
Swap fees incur when traders make swaps on any of Dexter’s pools. These fees are calculated as a percentage of the swap amount specific to each pool, accordingly:
The swap fee will be distributed between liquidity providers and protocol treasury as defined by the Vault Admin.
$XPRT is the native token of the Persistence ecosystem. Launched in April 2021, it was conceived to fuel a DeFi ecosystem that would go beyond the standard DeFi primitives found in most blockchains.
The Persistence core-1 chain uses CometBFT consensus based on Delegated Proof of Stake (dPoS). Therefore, it involves network participants like stakers and validators to stake $XPRT for block production and validation in return for $XPRT rewards.
As a result, the $XPRT bonded ratio (% of token supply that is staked) defines the economic security of the Persistence. Historically, the network has maintained a ~75%+ bonded ratio, one of the highest among all PoS chains in crypto.
$XPRT also derives its utility from its integration into the broader Persistence ecosystem. It offers governance power within the ecosystem, allowing $XPRT stakers and validators to have the final say on network upgrades, ecosystem dApp improvements, network parameter changes such as minimum or maximum inflation, $XPRT community pool spend…
The utility of $XPRT goes beyond being the native token. It enables use cases such as ecosystem development, network security, and governance. As the Persistence ecosystem continues to evolve, $XPRT remains at its core.
The role of $XPRT is to bootstrap ecosystem applications to propel network adoption and to secure the core infrastructure through staking. $XPRT stakers can also participate in governance to steer the network and contribute to the long-term success of the ecosystem.
As the Persistence chain runs on a delegated Proof-of-Stake-based CometBFT consensus engine, staking is integral to ensuring a secure and robust network. This means that $XPRT token holders will be able to delegate their tokens to one of the networks’ validators for staking. Stakers will receive staking rewards in the form of $XPRT in return for contributing to the security of the network.
Staking can be done via wallets such as Keplr, Cosmostation, Ledger, etc.
$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, similar to other Cosmos chains, is an inflationary token used for securing the network and validating blocks. This is achieved by incentivizing network stakeholders to participate in staking, subject to a 21-day lockup period.
Staking rewards currently comprise $XPRT inflation and fees from network transactions. 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) such as:
100 million $XPRT tokens were minted at Genesis, gradually releasing over 42 months. Currently, ~98% of the token is already unlocked, and $XPRT inflation gradually decreases to the minimum value if the bonded ratio exceeds the target bonded, and vice-versa. This mechanism directly links $XPRT inflation and chain security, maintaining the target bonded ratio.
Less $XPRT staked -> More $XPRT Inflation -> More $XPRT Staking Rewards.
At Genesis, the inflation was set to 35% with minimum inflation 25% and maximum inflation 45% for a target 67% bonded ratio. Besides, $XPRT inflation is cut by half 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%, currently holding the following parameters:
The pSTAKE platform operates as a liquid staking protocol, enabling PoS token holders to stake their tokens within the platform. This action generates stkASSETs, representing staked representative assets. pSTAKE utilizes a subset of validators on supported chains to stake the PoS tokens deposited by users. These stkASSETs, mirroring the user’s staked position, passively accumulate staking rewards. Furthermore, users can utilize these stkASSETs within DeFi to create extra yield.
$PSTAKE is the governance and incentivization token of the pSTAKE protocol. It is an ERC-20 token and powers the protocol’s ecosystem, providing users with governance power.
To secure the protocol’s sustained success, the $PSTAKE token serves as an incentive for the key contributors within the pSTAKE ecosystem.
The total supply amounts to 500 million tokens. The distribution plan prioritizes bolstering decentralization while also providing incentives for key contributors essential to the protocol’s sustained expansion and development.
The retroactive reward consisting of 6% of the supply was distributed accordingly:
Airdrop tokens are vested over 6 months and released monthly, with the first distribution taking place on or around March 8th, 2022.
Note that Dexter does not have its own token, and uses $XPRT for governance and traction, aligning closely with the success of the LSTFi narrative on the Persistence One ecosystem.
Governance discussions for Persistence are held on their forum and move to the on-chain governance phase once sufficient support is garnered. Proposals are usually targeted towards the creation of new pools, allocation of incentives and emissions, coordinating network upgrades, collaborations with other protocols…
In the on-chain phase, $XPRT stakers are able to vote on these proposals. Users can stake $XPRT by delegating their tokens to a network validator.
Similar to Persistence, governance discussions for pStake are held on their forum and move to the on-chain governance phase once sufficient support is garnered, via a series of stages: community discussion, formal proposal, snapshot voting, and implementation
The following table showcases a list of parameters and actions that the community is able to govern via the mechanics. This list does not include all possible factors.
Protocol Economics
pSTAKE Stakeholders
Snapshot Parameters
Dexter relies entirely on $XPRT governance after deciding not to have its own token.
Staking assets involves locking tokens in order to participate in the consensus mechanism of a PoS network. By doing so, stakers can validate transactions and secure the network, earning rewards in the form of additional tokens as a result. However, neither staking nor liquid staking come risk-free.
Liquid staking aims to address the illiquidity issue by allowing stakers to access their staked tokens while continuing to earn rewards. However, this also introduces additional risks and complexities, often because of the requirement to use additional smart contracts.
On the restaking side, Persistence uses the Terra Alliance Module. This way, when a validator is slashed, the total amount of tokens is not directly affected. Instead, the shares of the affected validator are slashed. This results in the offending validator claiming a smaller share of the rewards pool, while their assets are distributed proportionally to non-offending validators.
Restaking is also exposed to the same slashing risk as staking on the underlying Persistence One chain as well as to the underlying LSTs.
Security is a priority for Persistence, as demonstrated by its efforts to increase network security by borrowing $BTC security via Babylon, $ETH security via Ethos Stake, and restaking of LSTs in the Cosmos ecosystem.
Persistence is engaged in recurring security audits with highly reputable firms and also fosters a semi-permissioned environment to ensure secure deployments of applications on the network.
pStake – Cosmos
Cosmos Security Audit – October 20, 2022 – Halborn
pSTAKE Native – February 17, 2023 – Oak Security
pStake – BNB
Smart Contract Audit – July 4, 2022 – PeckShield
Smart Contract Audit – August 3rd, 2022 – Halborn
pStake – ETH
Security Assessment – April 26, 2022 – Trail of Bits
Smart Contract Audit – May 26, 2022 – PeckShield
pBridge
Audit Report – November 23, 2021 – Oak Security
Persistence Anchor
Ethereum Smart Contracts – January 25, 2022 – Oak Security
Dexter
Dexter Core – February 10, 2023 – Halborn
Security Audit – February 13, 2022 – PeckShield
Audit Report – March 13, 2023 – Oak Security
Persistence One is one of the only ecosystems in Cosmos to have active bug bounties.
Some of the members include:
Tushar Aggarwal, Founder and CEO
Kevin Poh, Head of Business Development & Partnerships
Mikhil Pandey, Chief Strategy Officer
Jeroen Develter, Director of Product
Zhi Hao Loy, General Counsel
$PSTAKE
pStake was the first dApp to build on Persistence One, raising $20M from Sequoia, Binance Labs, Galaxy Digital, Defiance, Coinbase Ventures, Tendermint Ventures, Kraken Ventures, Spartan Group, Coinlist public sale, and others.
pStake raised $10M as part of a bootstrapping round. The investors include:
A public round was also held from December 16 to 22, 2021. A total of $10M was raised at $0.40 per $PSTAKE token, distributed amongst 20K holders.
$XPRT
Seed and private sales amounted to 14% of the total supply, or 14M $XPRT, while Validators and Strategic Sales amounted to 10% of the total supply, or 10M $XPRT. No information was provided regarding the amount raised.
A public sale was held in March 2021, in 2 stages, consisting of 1% of the total supply, or 1M $XPRT. Prices ranged from $0.4 to $0.45 during the auction stages.
Traditionally, many blockchain networks relied on Proof of Work (PoW), a consensus mechanism that requires significant computational power, resulting in substantial energy consumption. PoW networks, like Bitcoin, are known for their environmental impact and limited scalability.
Proof of Stake, however, presents an energy-efficient and scalable alternative. In PoS, validators are chosen to create new blocks and validate transactions based on the amount of cryptocurrency they “stake” or lock up as collateral. This consensus mechanism not only reduces energy consumption but also enhances scalability, enabling more transactions to be processed.
The Cosmos Network represents a paradigm shift in blockchain technology. Prior to its emergence, blockchains operated in isolation, unable to communicate or interact with each other. These isolated networks faced challenges related to scalability and usability.
Cosmos addresses these challenges by introducing a decentralized network of independent, scalable, and interoperable blockchains. Through the Cosmos Software Development Kit (SDK), developers gain a modular framework that allows for the customization of decentralized applications (DApps). Cosmos achieves this through the use of Byzantine Fault-Tolerant consensus algorithms, such as Tendermint BFT.
DeFi, short for Decentralized Finance, represents a transformative shift in the financial industry. It encompasses a wide range of open financial products and services built on blockchain technology. Unlike traditional financial institutions, DeFi aims to provide accessible and trustless financial services to anyone with an internet connection.
DeFi enables users to borrow, lend, trade, and access a myriad of financial services without relying on centralized intermediaries like banks. It operates on the principles of transparency, security, and efficiency, reimagining how people interact with money. DeFi services are typically accessible through decentralized applications (DApps) built on blockchain protocols.
In conventional staking mechanisms, users often lock up their tokens for a predetermined period, rendering them illiquid and inaccessible. Liquid staking, however, introduces a game-changing concept. When users stake their tokens, they receive another token in return, acting like a certificate of deposit. These tokens can be freely traded, exchanged, or utilized across various DeFi applications while still earning staking rewards.
Liquid staking enables users to access the underlying tokens’ liquidity, unlocking their potential for use across the broader DeFi ecosystem.
Selecting the right validator for delegating your crypto tokens can be a daunting task, given the growing number of validators on most ecosystems. However, making this decision can be made easier by categorizing validators and conducting some research to align your needs with the right validator.
In general, validators fall into several categories, each with its own set of advantages and disadvantages:
When choosing a validator, consider your preferences and investment strategy:
Additionally, in your validation selection process, you should also look for:
Ultimately, the type of validator you choose should align with your goals, preferences, and risk tolerance. By conducting due diligence and assessing these factors, you can make an informed decision when selecting the right validator for your assets.
What is Persistence?
Persistence is a platform on Cosmos, aimed at enhancing the adoption of liquid staking yield. It focuses on building an economy centered around Liquid Staking Tokens (LSTs) and addresses liquidity challenges in staked assets.
What is staking?
Staking means locking up assets in a validator node in return for earning rewards from the work of this validator. These rewards are earned as your assets are put to work by verifying transactions in Proof-of-Stake networks.
What are Liquid Staking Tokens (LSTs)?
LSTs are tokens representing staked assets in PoS networks. They allow holders to maintain staking rewards while accessing their assets’ liquidity. LSTs can be traded, used as collateral, or employed in various DeFi applications.
Why should I stake my tokens?
Staking allows users to generate yield on their assets, securing the network and protecting their holdings from being diluted by token inflation.
How does Persistence address the liquidity issue in staking?
Persistence tackles liquidity issues allowing for the creation of liquid staked positions, enabling users to access their staked assets while still earning rewards. This dual-income model maximizes returns for PoS token holders.
Which validator should I stake $XPRT with?
As a delegator, you are free to choose a validator of your choice. You should note that %XPRT validators are the bedrock of the core-1 chain and contribute to the ecosystem with tech, governance, infrastructure, and social support.
Some things to consider while choosing a validator are commission, uptime, governance participation, slashing history, validator rank (lower rank is better for chain decentralization), social support, delegator customer support, etc.
You can also delegate to multiple validators that align with your ideal validator parameters for a diversified delegation of stake.
Why is there a 21-day unbonding period?
The unbonding period is in place to help secure the network. A 21-day unbonding period ensures no sudden unbonding shocks, security concerns, or malicious activities on the network.
Can I transfer my staked XPRT tokens between wallets? Do I need to unstake?
Yes, you can transfer staked XPRT tokens between wallets.
No, there is no need to unstake your tokens to transfer tokens.
How are staking rewards generated? Do I need to claim them?
$XPRT staking rewards are generated from $XPRT inflation and transaction fees. In the future, ecosystem dApps may share revenue with $XPRT stakers, a decision that the $XPRT governance can take.
You can claim your $XPRT staking rewards from your wallet directly. You will need to sign a wallet transaction to claim rewards.
How can $XPRT staking rewards be auto-compounded?
$XPRT staking rewards can be auto-compounded through third-party applications like Yieldmos, REStake, etc.
What do I do if my validator is shutting down their node? Do I need to unstake?
You can redelegate your staked $XPRT tokens to a different validator from your wallet if your current validator shuts down their node.
No, you do not need to unstake your tokens.
Will I get $XPRT staking rewards in the 21-day unbonding period?
No, you will not receive $XPRT staking rewards in the 21-day unbonding period if you have unstaked your tokens.
Can I cancel the $XPRT unbonding that is in progress?
Yes, ongoing $XPRT unbondings can be canceled anytime during the 21-day unbonding period.
What Consensus mechanism does Persistence use?
Persistence uses the CometBFT Consensus Mechanism, which is a software solution designed for securely and consistently replicating applications across multiple machines in a distributed system. In this context, “securely” means that CometBFT can continue functioning as long as fewer than one-third of the machines in the system fail in arbitrary ways, which includes the possibility of some machines becoming malicious. “Consistently” refers to the property that all non-faulty machines in the system observe the same transaction log and compute the same state. This capability is crucial for ensuring fault tolerance in various applications, ranging from digital currencies and election systems to infrastructure orchestration.
CometBFT comprises two main technical components: a blockchain consensus engine and a generic application interface called the Application BlockChain Interface (ABCI). The consensus engine, based on the Tendermint consensus algorithm, ensures that identical transactions are recorded in the same order on every machine in the network. The ABCI interface facilitates the delivery of transactions to applications for processing. What sets CometBFT apart from other blockchain and consensus solutions is that it does not impose built-in state machines like key-value stores or scripting languages. Instead, it allows developers to perform BFT state machine replication for applications written in the programming language and development environment of their choice.
What are the liquid staking products on the Persistence Core-1 chain?
Persistence hosts a suite of DeFi applications focused on LSTs. The dApps built on the Persistence Core-1 chain are:
How decentralized is the Persistence chain?
Persistence is one of the most decentralized chains in Cosmos, with one of the highest Nakamoto Coefficients and Network Scores.
Does the Persistence Core-1 chain support Smart Contracts?
Yes, the Persistence Core-1 chain supports CosmWasm, a smart contract platform in Cosmos. CosmWasm currently powers DeFi primitives such as pStake or Dexter on the Persistence Chain.
How does the community decide the future of the network?
The Persistence Network has an on-chain governance mechanism where the community votes for passing proposals, voting on software upgrades, changing consensus parameters and spending funds from the community pool or the ecosystem funds etc.
The easiest way to vote currently is via the Keplr Dashboard or Leap wallet.
The community members can also pitch ideas and share suggestions or feedback on the forum.
How does liquid staking improve DeFi and PoS ecosystems?
Liquid staking bridges the gap between staking and active DeFi participation. It allows staked assets to remain liquid, enabling users to trade, lend, or use them as collateral, enhancing the asset’s utility and yield-generating potential.
Which coin-type address is supported on the Persistence Core-1 chain?
Currently, both 118 & 750 coin-type addresses are supported by the Persistence Core-1 chain and will work as normal. However, we advise users to migrate to the coin-type 118 wallet address as the support for 750 coin-type wallets is proposed to deprecate in December 2024.
Cosmos
How much is my stkATOM worth?
The value of 1 stkATOM increases as it accrues staking rewards over time. This is because stkATOM follows a model where there is an exchange rate that changes based on the amount of underlying $ATOM. Users staking/unstaking on the pSTAKE protocol are charged the ongoing rate which is displayed on the app UI.
Why do I get less stkATOM for my ATOM?
stkATOM follows an exchange rate model (also known as the cToken Model) which results in stkATOM increasing in value against ATOM as the protocol accrues staking rewards. Thus, 1 stkATOM is worth more after each reward epoch, or 24 hours. Liquid stakers are given stkATOM tokens at the prevailing exchange rate at the moment they stake.
How do I receive rewards?
Rewards accrue into the value of stkATOM which increases after every reward epoch. Users start earning rewards from the end of the first day after staking.
Does pSTAKE charge for the service?
pSTAKE charges 5% on liquid staking rewards, where 95% goes to stkATOM holders and 5% goes to the protocol. In order to pay for transaction fees, users may need to hold a small amount of XPRT on the Persistence chain.
How is my stake distributed to validators?
Your stake is distributed equally to all validators in our set. Validators in the set are chosen in order to optimize uptime, low commission rates, high governance participation, and low instances of slashing.
BNB
How much is my 1 stkBNB worth?
The value of 1 stkBNB goes on increasing as it accrues staking rewards over time. This is because stkBNB follows a cToken model whose value changes based on the amount of underlying BNB. Users staking/unstaking on the pSTAKE protocol are charged the ongoing exchange rate which is displayed on the app UI.
What is the minimum and maximum amount of BNB I can stake?
There is no minimum or maximum limit to the amount of BNB a user can stake. Be careful to leave enough BNB in the wallet to pay for gas fees.
Why do I get less stkBNB for my 1 BNB?
stkBNB follows an exchange rate model (Compound’s cToken model) which increases in value as the protocol accrues staking rewards. Thus, 1 stkBNB is worth more after each reward epoch (24 hours). Users are minted stkBNB tokens at the ongoing exchange rate.
How do I receive rewards?
Rewards accrue into the value of stkBNB which increases after every epoch (UTC 00:00 hrs). Users start earning rewards from the end of the first day after staking.
Does pSTAKE charge for the service?
pSTAKE charges 0% staking rewards as fees for BNB Liquid Staking for the first 3 months. The fee is targeted towards developmental activities like hackathons, grants, bug bounties, etc. to support long-term growth of the pSTAKE ecosystem.
What determines the amount of reward I receive after every epoch?
Staking rewards mainly come from the transaction fees paid by users of the BSC chain and thus vary according to the network activity. pSTAKE uses a validator scoring mechanism based on APR, uptime, and number of slashing instances to delegate to the top validators on the BNB chain.
