Liquid Staking Module: Suggestion

R ecently brought to my attention was an implication of the LSM and it’s impact to end users. TL;DR: In order to properly account for the upcoming changes I suggest a, ‘lock-out, tag-out’ method practiced commonly in many industries; be added to the LSM. Context: The LSM enables instant conversion of staked $ATOM to liquid staking derivatives. Problem: Rescue Services and an inability to react timely, by end-users to an instant conversion of compromised staked assets. Suggestion: Lock-out tag-out is an industry standard that protects against incompetence, malice, accidents, and other mishaps. In context of the LSM and addressable problems I propose the following - Lock-out Tag-out function to the Liquid Staking Module would disallow users’ funds to be immediately converted without waiting. In order to properly balance the meta-changes encompassed by the LSM, impacts to that of end-user safety & security should be considered. Details such as length of lock-out, method of lock-out, are less important than the LSM’s automatic usability. If the LSM is shipped without concerns for user safety, regular users may suffer as a consequence of professional cyber criminals. The gist…

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Hey, the band of validators who help people recover from thefts are truly unsung heroes of the ecosystem.

“Well don’t lose your keys” is probably the right response.

Jacob, that’s ridiculous!

Yes. Maintaining secure crypto assets is harder than hell. If I had to guess, this particular feature is going to be the sort of thing that precisely the user who misplaces their keys or has them compromised (note: my first BTC bag is lost to misplacement. No one is immune to this problem, be very careful at all times, the tech is not forgiving) is not going to use.

I think that it may be better to try to come up with an alternate solution but I don’t know what that is.

I have friends who have been helped… I think by golden staking actually.

The ubp does form a decent buffer but that isn’t its intent.

I would recommend some additional consideration on this one

The unbonding period’s main role here isn’t that it actually benefits White hats over Black hats, it’s that retail end-users need time to coordinate with these recovery teams.

A lock-out feature may also be appreciated for ultra safe large institutions that are long-only and not active managers. In addition to the relative simplicity of this mechanic, a lock-out feature may benefit traders with less discipline who might paper-hand in times of crisis.

I can largely argue many reasons and benefits of why to have a lock-out feature, but namely am not a software engineer or competent enough to understand the difficulty of this task or how to best implement it.

So I actually you know this is a very very good point.

You have convinced me

Going to investigating adding Pause functionality to the LSM fork.

It’s gonna take a bunch of ecosystem coordination to get users to pause their stake. Will need a lot of help to make this possible

I agree with this idea 100 percent. I think adding a lock-out or tag-out tool to the Liquid Staking Module is a great way to make sure that users’ funds are safe and can be retrieved if needed. We should definitely think about the pros and cons of this function to make sure it’s a good fit for the LSM.

I think it’s great that GoldenStaking told us about this, and I’m sure the Cosmos Community will take this seriously. For more information on the importance of lock-out or tag-out, you can read this piece from GoldenStaking: