[Prop #853] [Voting] Allocate 600k ATOM to pSTAKE for growth of ATOM liquid staking

Proposal Allocate 600k ATOM to pSTAKE Finance for liquid staking and building liquidity for stkATOM across various Cosmos DeFi protocols. Change Log • October 24th, 2023 - Started this discussion by publishing the initial proposal • November 16th, 2023 - Made the following edits: Added Implementation details Changed TL;DR Proposed use of Funds TL;DR • pSTAKE Finance requests 600k ATOM from the Cosmos Hub Community Pool for the growth of ATOM liquid staking with stkATOM across Cosmos DeFi protocols. Of this 600k ATOM, 300k ATOM will be liquid staked with pSTAKE and the remaining 300k ATOM will be paired with stkATOM for LPing on DEXes. The split of liquid-staked ATOM to be used in Cosmos DeFi is proposed to be as follows: • LP on stkATOM/ATOM pool on Astroport (Neutron): 175k ATOM and equivalent stkATOM • LP on stkATOM/ATOM pool on Dexter (Persistence): 125k ATOM and equivalent stkATOM • pSTAKE Finance will waive any fees (5% fees) for the Community Pool on the 300k ATOM that will be liquid staked with pSTAKE. Furthermore, pSTAKE Finance will share 15% of its total revenue generated from ATOM liquid staking with the Cosmos Hub Community Pool…

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Totally agree whith this proposal, ATOM needs to nourish their app base in order to thrive, STRD as part of ICS has become the bigger receiver of stimulus, but Stride isn’t the only LS provider, that’s why as a comunity we should incentivize also other solutions, Competition and diversity is required not only in LS but in life in general that’s why a merge with STRD has many aversion. If we as a community keep resisting change things will remain the same, here are answers to your questions of how cosmos would become sutainable.

pandeymikhil:

It’s important to note that these funds will always remain under the custodianship of the Cosmos Hub, ensuring that no individual protocol has direct control over them.

pandeymikhil:

In return for this allocation, the pSTAKE protocol commits to waiving any fees for the Community Pool on the 350k ATOM that will be liquid staked with pSTAKE. Furthermore, pSTAKE is open to sharing 15% of its total revenue generated from ATOM liquid staking with the Cosmos Community Pool, contingent upon the 15% fee-sharing proposal being approved by $PSTAKE governance.

Win win solution to me.

I’m fully behind this idea. ATOM needs to branch out and support a variety of projects for its long-term success. This plan is a smart move that not only benefits Cosmos and Persistence but also positively impacts other platforms like Neutron and Dexter. By allocating ATOM to pSTAKE for liquid staking, we’re doing more than just increasing rewards for the Cosmos Community Pool. We’re diversifying our investments, which is a strong strategy to boost ATOM’s role, particularly in the DeFi sector.

Let’s also not overlook the advantages this brings to Persistence, a project deeply rooted in the Cosmos ecosystem. As Persistence grows, it aligns its goals with those of the broader Cosmos community. This mutual growth leads to a more stable and feature-rich environment for all users, enriching the Cosmos network as a whole.

Having a range of options is not just intelligent; it enriches our entire network. This is where Neutron and Dexter come into the picture. They stand to benefit from this proposal, which in turn solidifies ATOM’s standing in the DeFi landscape within Cosmos.

This has my support, too. I’m a daily user of Stride, but I want to see Atom used in every protocol in Cosmos.

Would it be out of place or unreasonable to ask that the Community Pool also receive some amount of up-front $XPRT to help offset the allocation of the “dormant” Atom & to better align the Fund’s continued viability & growth with the growth & success of Persistence?

I’m opposed to this, as I am also opposed to the Osmosis PoL proposal. The Stride-Neutron PoL makes a lot of sense because it strengthens two consumer chains at once. This proposal does involve Neutron in a small way, which is nice, but it seems to be mostly intended to promote a competitor to Stride. Any proposal to boost someone’s TVL with free ATOM can be justified by the “ATOM moneyness” concepts first introduced in ATOM 2.0. But right now, we do not have a clear theory of what the criteria for these deals is and we don’t have a framework for doing them. We don’t have any way for projects to collateralize the ATOM they are leant. We don’t have automation around this process. I think we can make exceptions in the case of deals involving consumer chains, because collateralization is not as much of concern given the control of the validator set over consumer chains through ICS, and value accrual for the Hub is not as big of a concern given that it benefits consumer chains. But until we have have the economic and code frameworks figured out with Timewave or something else, to allow these PoL deals to be an “onboarding to the AEZ platform” instead of a bunch of one-offs,…

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I got few contributions/feedback to share.

Firstly, I must commend pSTAKE/Persistence team for initiating this idea and it’s absolutely an epic one.

600k Atom is absolutely a great way to initiate more growth amongst Atom users, LST and Boosting the liquidity strength across these dApps.

Hope to see all aspirations come to reality, can’t wait to have a proposal go live after this forum.

I think spreading liquid staked assets to more than 1 LSD chain provider is a good idea. But like jtremback said it doesn’t include that much benefit to AEZ or Cosmos hub so I am kind of split on this idea.

If all asets were to be placed on Neutron on Astroport (and hopefully soon Mars Bank) it would have more benefit for the hub while still keeping intrest for pstake by earning commission from LSD assets.

I agree to the proposal. We should have diversified LS providers in Cosmos. Persistence shall be supported to the same extend as Stride was.
The inititative will help to grow the whole environment organically.

Persistence is on the mission to become crosschain LS HUB and represents Cosmos externally in front of other blokchains as BNB and Eth.

Within Cosmos Persistance had been actively supporting the comminuty from the beginning I personally dont get why its left behind and only Stride is considered to support.

jtremback: This proposal does involve Neutron in a small way, The majority of funds will be allocate in Neutron. jtremback: Any proposal to boost someone’s TVL with free ATOM Isn´t free ATOM in fact PSTAKE will be waiving fees for the Community Pool and sharing 15% of its total revenue with C.P. jtremback: But right now, we do not have a clear theory of what the criteria for these deals is and we don’t have a framework for doing them. We don’t have any way for projects to collateralize the ATOM they are leant. We don’t have automation around this process. But that nevermind if STRD is the beneficiary. jtremback: but it seems to be mostly intended to promote a competitor to Stride. In free markets needs to be competition otherwise is monopoly. jtremback: I think we can make exceptions in the case of deals involving consumer chains, because collateralization is not as much of concern given the control of the validator set over consumer chains through ICS, and value accrual for the Hub is not as big of a concern given that it benefits consumer chains. So every dapp out of ICS can’t acrue value to…

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Currently, most of the Liquid Staked ATOM is on Stride. For some reason, people forget other Liquid Staking alternatives exist, and prefer to use the most popular ones, creating a systemic risk.

Also, for some reason, the major players of the Cosmos Ecosystem want to only see Stride succeed (observe how the big voices never mention or talk about QuickSilver or pSTAKE). Look at how Sunny proposed to allocate 900k ATOM for LPing in the Osmosis stATOM/ATOM pool. No mention of other protocols. I understand Stride is in the AEZ while its competitors aren’t, but you can’t use this argument to provoke a systemic risk.

Here, Mikhil from pSTAKE comes up with a valid way that’s a win-win for all the involved parties. All assets remain in Cosmos Hub’s custodianship, all fees for the 350K ATOM are waived, and 15% of the fees generated by pSTAKE go into the Cosmos Community Pool.

Let’s not put all our eggs in one basket, frens.

I agree with this proposal. It will simply be beneficial for out network, and support the growth for the entire cosmos ecosystem.

Multisig as Interim Solution Hey everyone, I’m chiming in on behalf of Timewave . To preface, I am not posting in favor or against this draft proposal. Timewave is a neutral provider of infrastructure that enables interchain agreements. Blockchains, DAOs, dApps, protocols, and other internet-native entities can use Timewave infrastructure to enter into economic agreements with the Hub, thereby onboarding onto the AEZ platform. Whatever terms the Hub and Persistence ultimately reach with one another, if any, we at Timewave will work towards building the infra necessary to initiate and manage that agreement trustlessly (i.e. without the need for a trusted multisig). With all that said, I encourage the Hub to move forward with strategically valuable liquidity sharing agreements without waiting for Timewave. Similar to how Stride started with a multisig with the intention to move to a trustless option once the trustless option is production ready, the Hub could enter into a liquidity sharing agreement with novel deal terms and use a multisig to manage the deal until the trustless infrastructure is audited and able to handle the novel deal terms. Timewave will prioritize any deals…

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Hey @jtremback , first and foremost, thank you for sharing your thoughts here. We really appreciate you bringing up your concerns. I agree with some of the things you have brought up. In particular, I am aligned with your thoughts around having an economic and code framework for doing liquidity deals with chains. I also agree with you that it would be ideal to have Automation around the entire process of making the deal and putting the CP ATOM to use. As per our conversations with Timewave labs, they are already working on tooling around these problems and I think it would make a ton of sense to leverage those tools once they are ready. As highlighted by @maximus , once these solutions are built out and ready, we would be more than happy to migrate assets from a multisig to Covenant v2/v3. In the meantime, I would propose having a 4/7 multisig custody the assets. The people on this multisig should be defined by governance. The reason we did not propose who should custody these funds is primarily to avoid any situation where ATOM stakeholders feel that pSTAKE will be favoured by the multisig participants (or they probably are already favouring pSTAKE, which is why they are on…

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If stride cannot be acquired by the hub, we should promote other LST protocols and have them join the AEZ.

This proposal represents a well-thought-out, strategic, and holistic approach to the growth of the Cosmos ecosystem. Stakewolle believes this initiative will yield both immediate benefits and long-term growth, and we urge community members to extend their support for Persistence.

This is really well thought proposal.

It really highlights the potential of ATOM as Interchain Money to stimulate growth across the Cosmos ecosystem.

Using Dormant tokens in community fund to help cosmos ecosystem to grow and provide more options for users to provide liquid staking is best thought process.

Couldn’t agree more with this proposal.

This strategic allocation benefits the Cosmos Hub by promoting Liquid Staking adoption while accruing significant value across the Cosmos LSTfi ecosystem.

Cant wait for this to go voting.

pandeymikhil: The requested 600k ATOM represents 11.76% of the ATOM presently dormant in the Community Pool. Liquid staking this amount (approximately 350k ATOM) is expected to yield roughly 69,160 ATOM rewards annually, factoring in a 19.76% pSTAKE LS yield. The 5% protocol fee charged here will be waived off and sent back to the Community pool in addition to the 15% revenue. Additional yield is anticipated from LP rewards and swap fees on Dexter and Astroport. Enjoyed reading this proposal and all the comments. A couple things from our perspective… we agree that supporting app chains that aren’t consumer chains makes sense when the Hub maintains control of the funds and when 15% or more of the revenue comes back to the community pool. Doesn’t the LS yield come from issuance of new tokens so the CP is robbing Peter to pay Paul? The choice is between not inflating and calling the CP tokens dormant/unproductive, or increasing supply and depressing price? Also, the numbers in the above quotation assume current inflation/yield and theres ongoing discussion to set max inflation at 10%, so it makes sense to include the deceased revenue numbers too. If the ATOM the CP…

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Hey @BlocksUnited , thank you very much for your comment and the candidness in your response to the proposal. You have made some really great observations here and I want to start off with the first question. Doesn’t the LS yield come from issuance of new tokens so the CP is robbing Peter to pay Paul? This is a great observation. I have also fought with this idea quite a bit. Especially because I keep thinking that any LS provider charging a fee on ATOM liquid staking from consumers and sending a portion of this revenue to the hub, is doing exactly what you described - Robbing Peter to pay Paul. Peter in this case is the consumer and Paul is the Community Pool. I believe any LS protocol sharing revenue with the hub is doing pretty much the same thing. However, if you take a step back and ask yourself (which is what I did) - who is benefitting from this? I believe it is both, ATOM stakers (Paul) , and Peter as per your example. Peter values liquidity of his staked assets more than the revenue share he would receive if he was in the same boat as Paul. Peter is willing to pay a fee for his assets to have liquidity while Paul is not too keen on having his assets Liquid…

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No.
the reserved ATOM is used to incentive new project/protocol develop,not used to supply liquidity;
if one project couldn’t accapt by market 2 years, u need consider your direction;
just like 90K BTC couldn’t rescue UST.

Stride applacation same.

Yes, we need more decentralization in the question of liquid staking!

But I have several questions:

1. Among which validators is it proposed to distribute this stake?

2. Will swap fees go back to the Community Pool?

3. At the moment:

• the Cosmos Hub Community Pool is 5.2M $ATOM
• 600K ATOM is 11% of the Community Pool
  Don’t you think 11% of the Community Pool is quite a large portion?

pandeymikhil: The choice is between not inflating and calling the CP tokens dormant/unproductive, or increasing supply and depressing price? Also, the numbers in the above quotation assume current inflation/yield and theres ongoing discussion to set max inflation at 10%, so it makes sense to include the deceased revenue numbers too. Sorry, I don’t really understand what you mean by this. Could you please expand more on this? Thank you for your well articulated response. Respect. What I mean in the above example is that once the CP ATOM is staked, rewards are paid out and most of those rewards are inflation. If the Community Pool ATOM continues to sit in the treasury without being staked, there are no additional ATOM emissions to pay staking rewards on that ATOM. You said, “As for the max ATOM inflation being reduced to 10%. You are right that it impacts the revenue that pSTAKE can share with the CP but the benefits still outweigh the reduced revenue aspect. My personal opinion is that with a reduced max inflation parameter, ATOM bonding ratio might take a short term hit, but the unbonded ATOMs should flow into DeFi - either directly or in the form of Liquid…

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BlocksUnited: But ATOM flowing into DeFi doesn’t help ATOM validators and there is no way that the 15% being paid to Cosmos by Persistence can make up the difference of lower profitability for small validators. We believe this is a very important point. @Cosmic_Validator points this out in their response to the 10% inflation discussion here: [PROPOSAL] Set Max Inflation at 10% - #33 by Cosmic_Validator How is this 600k ATOM to be liquid staked with pStake and for stkATOM liquidity on Astroport and Dexter affecting the profitability of small validators? The 350k ATOM to be liquid staked with pStake would actually increase profitabiliy of small validators if they are eligible and selected for the pStake Cosmos Hub host chain delegation program. Furthermore, increasing the liquidity of stkATOM is also positive since it is healthy for the liquid staking ecosystem in Cosmos to have several liquid staking providers. We think that Stride is a great project and we will keep supporting Stride, but for Stride itself is also healthy to have some good competition and avoid getting too centralized. In the Ethereum ecosystem, Lido has become too large now and it is now controlling…

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Agree with everything you said.
I think my point is that the revenue share with the Hub won’t offset the loss of profit by decreased staking APY and decreased bonded ratio if people lose interest and unstake.

BlocksUnited:

I think my point is that the revenue share with the Hub won’t offset the loss of profit by decreased staking APY and decreased bonded ratio if people lose interest and unstake.

There are around 247M staked ATOM, do you think staking 350k ATOM would have a major impact on the APR? Also, this would increase the bonded ratio, not decrease it. Moreover, not sure how this is related to this proposal, but if the bonded ratio decreases the APR increases. Furthermore, if the bonded ratio decreases when it is already below ~67%, not only the APR would increase but also the inflation would also increase more to encourage more staking. If the bonded ratio decreases when it is above ~67%, the APR would increase, but the inflation would continue to decrease but at a slower pace as the bonded ratio gets closer to ~67%

Thank you pSTAKE/Persistence for submitting this proposal draft to allocate 600k ATOM to pSTAKE. • Currently, there is a lot of competition for community pool tokens… between this proposal, proposal #839 and Osmosis draft proposal to allocate 900k ATOM to an LP the combined ask would spend ~50% of the ATOM in the community pool. These tokens are currently dormant, however there is a realised opportunity cost to passing any proposal should funds not be available later down the line because the ATOM has been allocated elsewhere. So this is definitely a consideration. • Based on some rough calculations, with pSTAKE having 336,456.72 ATOM liquid staked and Cosmos Hub Community Pool receiving 15% of the 5% protocol fee for pSTAKE annual revenue for the Cosmos Hub would be around ~$20,000-$25,000 from liquid staking fees, but if my calculations are correct the majority of revenue would be generated through LP swap fees on decentralised exchanges. Here is an estimation (just hope my rough math is accurate - please correct me if otherwise) • Dexter: stkATOM/ATOM • Current Liquidity: $733,422.29 • Cosmos Hub liquidity injection: ~200k ATOM = $1.42m • Cosmos Hub share of…

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Thank you for all the feedback on this discussion so far. It is really enthralling to see Cosmonauts bring in various perspectives and contribute to the discussion constructively. I will continue to be active here and respond to all queries.

As a side note, pSTAKE is hosting a Twitter Space to discuss the proposal and really dive deeper into the rationale, FAQs, and benefits of this.

1 November 2023 (Wednesday) 3 PM UTC - https://x.com/pStakeFinance/status/1717829587655090181

Hope to see everyone there!

Thanks @l1am_Crypto for your valuable feedback and for highlighting some very important points that have not been discussed so far. Currently, there is a lot of competition for community pool tokens… These tokens are currently dormant, however there is a realised opportunity cost to passing any proposal should funds not be available later down the line because the ATOM has been allocated elsewhere. So this is definitely a consideration. If a better opportunity arises and the CP is low on funds, a proposal to withdraw assets from pSTAKE and deploy elsewhere should suffice. It may lead to some time delay, but it could definitely be a solution. On another note, I’d like to highlight the key difference of pSTAKE’s proposal, revenue share without any additional overhead to the Hub. As suggested in my OP and on the pSTAKE Forum, pSTAKE Finance (given governance approval) will share 15% of its total ATOM liquid staking revenue and waive any fees on the Hub’s 350k ATOM worth stkATOM position. This comes in return for the suggested liquidity injection by the Hub and some temporary multi-sig operational work to manage the LP positions until Timewave’s Covenant v2 is out, as…

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Hey @Antropocosmist Thank you for sharing your thoughts. Apologies on the delay in getting back to you. Among which validators is it proposed to distribute this stake? The pSTAKE Validator Delegation Strategy is driven by the PSTAKE governance. Initially, at launch, 62 validators were voted in by the community based on parameters like uptime, commission, and governance participation and received equal delegations to keep things simple while still keeping decentralization in mind. We are also in the works of tweaking the delegation mechanism to a weight-based rebalancing strategy considering parameters like Voting Power, Commission, Uptime, Governance Participation, and LSM capacity. More details about this will be published and discussed on the pSTAKE Forum . Will swap fees go back to the Comunity Pool? Yes, the Hub’s Protocol Owned Liquidity on Dexter and Astroport will not be bonded and generate swap fees from trading activity on the pools mentioned the original post above. Timely (perhaps every quarter), the swap fees will be sent back to the Cosmos Hub Community Pool. Don’t you think 11% of the Community Pool is quite a large portion? I think the…

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Hi, following from the twitter space discussing the proposal I would like to suggest the following options • Replace stkATOM/IST pool with an stkATOM/USDC pool. It is likely the the Cosmos Hub can generate more revenue from an stkATOM/USDC pool than an stkATOM/IST pool, this is because a noble USDC pool is likely to see higher volumes which will generate additional revenue. This also has the added benefit of Noble looking to transition to ICS at some point towards the end of November. Meaning there are additional synergies from using a USDC pool. That said, I think the pool selection process should be done in a way where we are selecting the best pools to provide POL, that will return the most value for ATOM, either in revenue or other metrics. This brings me on to option two… • Create two seperate proposals One proposal from pSTAKE to signal approval of a 600k ATOM spend, with 350k ATOM to be liquid staked with pSTAKE, and the remaining 250k ATOM to be transfered to a multisig account waiting for further instruction The second proposal, would be defining the liquidity pools that the Cosmos Hub community would like to deposit the ATOM to. Signalling for the…

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Hey @l1am_Crypto first and foremost, thank you for actively sharing your feedback on the Twitter Space as well as here. Really appreciate you taking the time to provide your thoughts. l1am_Crypto: • Replace stkATOM/IST pool with an stkATOM/USDC pool. It is likely the the Cosmos Hub can generate more revenue from an stkATOM/USDC pool than an stkATOM/IST pool, this is because a noble USDC pool is likely to see higher volumes which will generate additional revenue. This also has the added benefit of Noble looking to transition to ICS at some point towards the end of November. Meaning there are additional synergies from using a USDC pool. That said, I think the pool selection process should be done in a way where we are selecting the best pools to provide POL, that will return the most value for ATOM, either in revenue or other metrics. This suggestion to utilise native USDC issued on Noble and pair it with stkATOM instead of using IST makes a lot of sense and I agree with you that this pool could generate more volumes than the proposed stkATOM/IST pool. This could definitely be an interesting use case; I recognise that there are currently several technical…

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where is the market for LSDs? I understand you are trying to create “LSDfi” but why wouldnt each DEX make their own ad hoc LSD, increasing DEX revenue?

LSD providers seem like an unnecessary and clumsy element that leads to a bevy of emergent problems.

Problems that might be more obvious if the community pool didnt perpetually subsidize ATOM LSD’s lack of demand and perpetual illiquidity.

Objection.
stkATOM on PSTAKE is not a complete product.
After the Cosmoshub v12 upgrade, Cosmoshub already supports LSM, if the validators have the enough self-bound. ATOM staked to a validator can be converted to stATOM at any time, if the validator is self-bound enough. Stride is already integrated, while PSTAKE is not yet fully integrated and only works for few large validators it selected, which violates the original intent of Proposal 790 LSM.
So stkATOM is a defective product and this proposal should be opposed until PSTAKE fully integrates the functionality of Proposal 790 LSM.

iwbinb: until PSTAKE fully integrates the functionality of Proposal 790 LSM. As soon as the LSM was ready on the Cosmos Hub, both Stride and pStake offered the option to liquid stake staked ATOM directly without waiting the unbonding period via the LSM. Either through the pStake UI/stkATOM or the Stride UI/stATOM. iwbinb: Stride is already integrated You are confusing the LSM with consumer chains. Stride, pStake or other ATOM liquid staking providers can offer the option to liquid stake staked ATOM without the unbonding period thanks to the LSM. Yes, Stride joined the Cosmos hub as a consumer chain and it is a great project, but it doesn’t mean that only Stride can offer liquid staking of staked ATOM, pStake or other liquid staking providers that are not consumer chains can also leverage the LSM and offer as well liquid staking of staked ATOM without the unbonding period iwbinb: only works for few large validators it selected This is also incorrect. pStake has been delegating to many validators across the active set and they are about to announce a new selection process for Cosmos hub validators for pStake based on updated…

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You only know we can stake ATOM to get stATOM.(pSTAKE and Stride both support)
You don’t know CosmosHub already support the LSM with that already delegate ATOM with validators.
For example, I already delegate 100ATOM to a validator(who already self-bond), I can make this 100ATOM directly to stATOM on Stride but not avaliable on pSTAKE.

iwbinb:

I already delegate 100ATOM to a validator(who already self-bond), I can make this 100ATOM directly to stATOM on Stride but not avaliable on pSTAKE.

This is incorrect. Both pStake and Stride (and also other ATOM liquid staking providers) support liquid staking of already staked ATOM without waiting the unbonding period thanks to the LSM. In fact, pStake and Stride released the UI to liquid stake already staked ATOM around the same time just after the LSM upgrade in the Cosmos hub

We see all the reputed liquid staking providers equally, and if we have given chance to Stride we should give the chance to pStake too, but can you elaborate more how do you chose the validator set you stake with?

In fact, about liquid staking of already staked ATOM, PSTAKE only supports few validators they selected.
So before they support for all validators(already self-bond), I don’t think the proposal should be supported.

I am not sure what you are talking about.
pStake delegates with 70+ validators while Stride only validates with 32 validators. Other than Quicksilver every other liquid staking protocol stakes with a subset of Hub active set which is concerning. They are concentrating the already distributed VP.

About LSM, I am not updated on the current situation of pStake if they support the LSM or not and what are their plans to do that.

@pandeymikhil

Being a supporter of free-market and fair competition I would support this proposal. I see trusted people in the multi-sig. But my only concern is the subset of Hub active set pStake delegates to. What would it take to increase the set from the current 70 to ~All (excluding 100% commission and exchange validators)?

waqarmmirza:

But my only concern is the subset of Hub active set pStake delegates to.

I think the demanding eligibility requirements that Stride or pStake have in terms of governance participation, uptime and more it is actually positive. It encourages more active governance participation and better uptime and performance. It is fair that validators with great uptime or governance participation are rewarded, while those who never/rarely vote, never participate in the forum or have bad uptime are not eligible. All the validators can choose to participate in governance, improve their uptime and work hard with community or engineering contributions. If some validators choose to rarely vote, have bad uptime and don’t contribute to the Cosmos hub neither with community or engineering contributions, it is normal that they are not eligible/selected by Stride, pStake or other staking providers. Furthemore, by selecting validators in this way with such demanding requirements, the slashing risks for liquid staking providers are minimized and hence they are perceived as less risky and can attract more ATOM to be liquid staked.

Allocating funds to be LPs in a pool makes sense to bootstrap liquidity and generate enough trust in the pool for the ecosystem to be an accepted form of DEX. This is key to help any DEX succeed Timeline We are wondering what happens after x+365 days? Will withdrawal be initiated immediately there after to return the funds back to the community pool alongside all the profits minus impermanent losses (if any)? pandeymikhil: It is proposed that the allocated funds remain within the proposed protocols for an initial duration of one year. This implies that the funds will be held within the proposed protocols for a period of x+365 days, where x represents the days until the funds are transferred to the multisig. Operational Execution What’s the reptuation of Timewaves Lab in managing the fund to ensure the rebalancings happen properly? pandeymikhil: While we are actively in discussions with Timewaves Lab to establish a trustless fund management solution using Covenant for managing our funds, we acknowledge that production is still underway. To bridge this interim period, we propose the creation of a 3/5 multisig to steward the funds securely. This…

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jacksteroo:

And how far along is Convenant v3 @maximus ?

We are in the design phase with v3 where we are collecting feedback from the community and turning that feedback into specs. We plan on beginning the engineering effort on it Q1 2024.

v2 will be sufficient for this proposal. v2 is on track to be production ready by Q1 2024.

wassie: We see all the reputed liquid staking providers equally, and if we have given chance to Stride we should give the chance to pStake too, but can you elaborate more how do you chose the validator set you stake with? Thank you for sharing your thoughts @wassie pSTAKE’s validator set is driven by the PSTAKE governance . pSTAKE contributors believe in progressive decentralization. At launch, the delegation strategy was kept simple to implement while keeping decentralization in mind. A criteria that involved filtering the top 100 Cosmos Hub validators with on-chain parameters like uptime, commission, not an exchange validator, slashing history, governance participation was suggested and passed by governance. This resulted in the current 62 validator active set. Stake delegation was set to be evenly distributed across these 62 validators. So although a smaller validator received the same amount of stake as a bigger validator, the % increase in stake for a smaller validator was much higher. pSTAKE contributors are also working on how to improve the validator selection mechanism and increase the number of validators pSTAKE supports (thus increasing…

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Addressing two points from above: iwbinb: You only know we can stake ATOM to get stATOM.(pSTAKE and Stride both support) You don’t know CosmosHub already support the LSM with that already delegate ATOM with validators. For example, I already delegate 100ATOM to a validator(who already self-bond), I can make this 100ATOM directly to stATOM on Stride but not avaliable on pSTAKE. waqarmmirza: Being a supporter of free-market and fair competition I would support this proposal. I see trusted people in the multi-sig. But my only concern is the subset of Hub active set pStake delegates to. What would it take to increase the set from the current 70 to ~All (excluding 100% commission and exchange validators)? Hey @waqarmmirza @iwbinb pSTAKE launched support for the LSM on the day it went live on the Cosmos Hub. pSTAKE’s LSM implementation also supports Ledger and was audited by Halborn Security before release. Sharing some LSM usage stats (as of 21 November 2023): • 71,127 natively staked ATOM has been liquid staked into stkATOM • 339 LSM liquid staking txns by 138 unique users On the point of validators and self-bod, please allow me to…

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jacksteroo:

We are wondering what happens after x+365 days? Will withdrawal be initiated immediately there after to return the funds back to the community pool alongside all the profits minus impermanent losses (if any)?

Hey Jack,

You are absolutely right here. Funds will be pulled out and returned back to the community pool when the duration agreed upon ends.

jacksteroo:

What’s the reptuation of Timewaves Lab in managing the fund to ensure the rebalancings happen properly?

Timewave’s solution is yet to go live but the decision to migrate custody of assets to Timewave is also dependent on Hub governance. Once the v2 is ready, a proposal will be raised to discuss the migration of funds and Timewave’s solution will be explained in more detail then.

Our current view on proposal that should allocate $ATOM outside consumers chains and how it should be proposed:

Get liquidity that you don’t own.
Provide $XPRT that the Hub own in exchange.

So the hub have an incentive to make it work, and still conserve $ATOM ownership until you accept be a provider chain or die.
It’s win win for the Hub, not for Persistence, but that’s the only way that it’s an acceptable deal.

Otherwise the Hub doesn’t earn anything from it, and would better provide them on some others consumer chains.

Zdeadex | 🇲🇫 ⚛

Hi @pandeymikhil
Looks like you had a misunderstanding of Native Staked Atom to stkATOM.
If it is a general ATOM staked into a stkATOM, LSPs can choose a fixed subset validators. That is the freedom of the Liquid Staking Providers (LSPs).

However, if it is Natively Staked Atom to stkATOM, then this is a different feature.(forum.cosmos.network/t/signaling-proposal-draft-add-liquid-staking-module-to-the-cosmos-hub/10368)
This feature was implemented after the v12 upgrade.
Whenever a validator has a self validator bond, delegators can convert Natively Staked Atom to stkATOM. The upper limit is that if a validator self bond is 100ATOM, then the value of converting Natively Staked Atom to stkATOM is 25000stkATOM.
Again, this is a feature available to any validator with self bond, not a subset of validators chosen by the LSPs. Stride is already supported for all validators.

I hope my explanation makes sense to you.
If you understand my explanation but feel it is not right, please get an answer fromthe cosmoshub team.

Hey @iwbinb

I get your question and thanks again for going into more details.

pSTAKE supports LSM delegations for validators that are a part of its subset and does not support LSM based delegations for validators that aren’t in its set.

But as far as I know, Stride works in a similar way except it may seem like it accepts all LSM based delegations. With Stride, you are nudged to redelegate to one of Stride’s 32 validators on the dApp itself and the underlying stake is transferred from a validator that is not a part of Stride’s active set to a validator in the active set.

Should you wish to continue to liquid stake, the stake is then distributed across the 32 validators that the Stide governance chooses.

While it may seem like Stride supports all validators, it doesn’t in reality. It takes in all the ATOMs that it can and redelegates to its subset.

As for pSTAKE, the protocol just accepts already staked assets if you re-delegate LSM based delegations to a validator pSTAKE supports. I don’t see much difference in this approach. I hope that clarifies your doubt

Persistence has always been a project with a questionable marketing strategy. During the bull maket they had an army of influencers hyping their projects, like Pstake or Assetmantle. And yet they failed to reach any adoption. I strongly don’t want the Cosmos Hub associated with a vaporwave. Persistence doesn’t have any of Cosmos values. They are clearly desperate for liquidity, and the Cosmos Hub is not a charity, the Hub has to partenr with promising projects, not projects that failed and keep showing that don’t have what it takes to build in the ecosystem.

Thank you for the detailed reply. It is great to hear that pStake is working on a decentralized way of choosing the subset. Any ETA on this? I believe we won’t have any problems when this solution is implemented, until ten, will pStake delegate these 600 K atoms with the existing subset?

I strongly believe pStake needs to increase the subset for now.

Thanks for the answer. Hopefully we will see further improvements in the validator set and soon.