Revelo Intel - Persistence: A Staking & Restaking Hub for the Cosmos

In this episode of Revelo Intel, which took place on April 1, 2024, Nick and Mikhil discuss Persistence, Cosmos ecosystem, parallelized EVMs, and more. Read our notes below to learn more.

Background

Nick Drakon (Host) – CEO of Revelo Intel
Mikhil Pandey (Guest) – Co-Founder of Persistence
Persistence – a purpose-built Layer-1 on a mission to maximize yield and security through Liquid Staking and Restaking.

What is Persistence?

Mikhil says that Persistence One is a purpose-built app chain operating within the Cosmos ecosystem. They initially focused on bringing real-world assets onto the blockchain but shifted towards maximizing yields on liquid and rest assets within Cosmos due to challenges faced with real-world asset integration.
He adds that initial attempts at integrating real-world assets faced challenges due to slow processes and market conditions. A stake drop campaign was conducted in late 2020 to gauge interest in liquid staking through airdrops for stakers, revealing significant demand for additional yields.
Mikhil says that they chose Cosmos for its customizable tech stack allowing privacy options, validator selection control, and early adoption of proof-of-stake (POS) mechanisms. They have made an early bet on POS, staking, and liquid staking due to the favorable tech features offered by Cosmos compared to other platforms at that time.
He adds that they have issued $stkATOM as an ERC20 token in 2021 but post-Terra collapse events have caused its market share to drop.
Mikhil says that Persistence has its own DEX called Dexter with stable pools, distinct from traditional Uniswap or concentrated liquidity pools. Meta stable pools enable efficient swaps between assets of similar value, even as one asset appreciates due to staking rewards.
He adds that the restaking concept exists in Ethereum and Cosmos, offering gamified versions at the protocol level. The objective is to provide LST holders like $stkATOM, and $milkTIA with enhanced yield opportunities without excessive risk exposure.
Mikhil says that Persistence focuses solely on liquid state tokens or restake tokens rather than becoming a general-purpose layer one blockchain. He emphasizes providing specific utility for LST holders while steering clear of NFTs or real-world asset integration.

Restaking & Next Steps

Mikhil says that recent expansion includes launches such as Celestia and upcoming chains like Berachain within the Cosmos ecosystem.
He adds that there is a lack of interest among $ATOM holders in engaging in various activities like minting and borrowing against assets. He compares this with Ethereum’s DeFi ecosystem and differences in user behavior.
Mikhil says that a DeFi ecosystem in Cosmos was absent in 2021. Osmosis has played a great role in establishing a DeFi ecosystem within Cosmos.
He adds that $ATOM holders are inclined towards staking rather than providing assets as collateral or engaging in LP activities. Staking is comfortable for users due to native flexibility compared to Ethereum’s staking process.
Mikhil says that the development of restaking allows users to stake their assets similar to traditional staking but with additional rewards. Similar risks are involved such as slashing risks on a Cosmos-based chain.
He anticipates continued activity and airdrops like Celestia impacting product development.

Impact of Cosmos Ecosystem on Persistence

Mikhil makes a distinction between $ATOM and the broader Cosmos ecosystem. He has a positive outlook due to newer IBC-enabled chains joining the network, fostering innovation among existing and new builders.
He adds that since every team focuses on its app chain, it doesn’t inherently contribute to the Cosmos ecosystem in general.
Mikhil says that liquid staking in Cosmos allows for issuing liquid stake tokens for every Cosmos chain, leveraging a consistent staking logic across chains. Supporting a new chain in Cosmos takes less than a week due to the interoperability and shared staking logic among chains. The demand for security in newer app chains within the Cosmos ecosystem is increasing, driving the need for solutions like liquid staking.
He adds that liquid staking on the Persistence Chain enables securing other chains by depositing LSTs, catering to the growing demand for security without inflating token supply. The focus is on betting on newer valuable chains launching within Cosmos, emphasizing the importance of providing security through innovative solutions like liquid staking.

$XPRT: Past & Present

Mikhil says that the $XPRT token serves various purposes such as gas usage and transaction facilitation on the chain. There are discussions regarding additional functionalities for the token, with one proposal suggesting revenue sharing with stakers.
He adds that revenue generated within the network raises questions about its distribution. Currently, revenue from activities like Dexter remains untouched in a contract.

Role of Governance in Persistence

Mikhil says that community discussions emphasize that revenue should benefit those securing the network. The success of projects like Dexter can lead to increased revenue for $XPRT stakers due to network security.
He adds that community members are actively drafting proposals to formalize revenue-sharing mechanisms associated with $XPRT. The $XPRT token functions as a layer-1 token similar to other tokens in Cosmos or beyond, providing gas payment capabilities and chain security.
Mikhil says that validators play a crucial role in governance participation within Persistence in Cosmos. Many validators exhibit over 75-80% validation participation in governance, showcasing a strong commitment to the network’s decentralized decision-making process.

Future Plans

Mikhil says that parallelized EVM implementation showcases the scalability potential for blockchains. They focus on risk management to navigate the risk effectively.
He adds that $BTC‘s evolution with various Layer-2 solutions like Babylon signifies progress towards diversification and innovation.

Parallelized EVM

Mikhil highlights the importance of understanding parallelized EVMs beyond parallel execution to include state-level considerations. People are recognizing database-level challenges as a significant hurdle in achieving seamless transaction processing within parallelized EVMs.
He envisions a future where parallelized EVMs could facilitate high-frequency trading applications with enhanced transaction speeds. It proposes a separation between transaction execution and settlement layers to optimize processing efficiency.
Mikhil anticipates improved user experiences through faster transaction executions enabled by paralyzed EVMs. He compares this advancement to localized fee markets in Solana, emphasizing the potential for innovative applications with superior user interfaces.
He acknowledges limited ecosystem dominance outside EVM-based platforms like Ethereum and Solana.
Mikhil says that every EVM chain is likely to move towards parallelized EVM structures to stay competitive and innovative. Traditional capital from entities like Wall Street may be attracted to these parallelized EVMs, potentially expanding the market significantly. Failure to innovate and incorporate new technologies promptly could lead to challenges for EVM chains in this evolving landscape.

Persistence Long-term Plans

Nick says that innovations like Sonic by projects such as Fantom demonstrate the necessity for constant progress in a fast-paced industry. Persistence showcases rapid evolution from basic operations to complex functionalities, emphasizing the need for innovation amidst chaos.
Mikhil says that they prioritize security through multiple audits reflecting a commitment to building robust solutions with longevity in mind.

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Show Information

Medium: YouTube (Video)
Show: Revelo Intel
Show Title: Power of Persistence: A Staking & Restaking Hub for the Cosmos
Show Date: April 1, 2023