New Tenet Blockchain to Leverage Liquid Staking Coins for Transactions

New Tenet Blockchain to Leverage Liquid Staking Coins for Transactions

Tenet, a new blockchain built on Cosmos, is set to use liquid staking coins from other networks to secure its transactions. This move could potentially allow the new network to inherit the security of older ones, according to a recent announcement from the developers.

Liquid Staking Protocols

Liquid staking protocols such as Lido, Rocket Pool, and Ankr are becoming increasingly popular in the decentralized finance (DeFi) space. These protocols allow users to stake their coins with a network of validators and receive rewards without having to run their own nodes. Users are also provided with liquid staking derivatives known as LSDs, which can be redeemed for the underlying deposits and rewards.

Restaking LSDs for Additional Rewards

Tenet will allow users to restake these LSDs to earn additional rewards on its network while providing tokens that represent the LSDs themselves. The team calls these third-order tokens liquid liquid staking derivatives or LLSDs. These tokens will be usable in lending apps and decentralized exchanges throughout the Tenet network, the announcement said.

Benefits of Using LSDs

Tenet’s team expects two core benefits to using LSDs instead of a native coin to secure the network. First, it ensures the long-term security of the Tenet chain by leveraging the joint security of each layer 1 ecosystem it services, and second, it should bring additional liquidity and yield opportunities to LSDs.

The new network is being developed by former executives of Ankr and Blockdaemon and is advised by members of the Lido, Ankr, and OpenAI teams. At launch, the protocol is expected to allow liquid staking derivatives of Ether (ETH), BNB (BNB), Cosmos (ATOM), Solana (SOL), and Polygon (MATIC) to be restaked on Tenet. Liquid staking protocols have existed since 2020 when Lido was first launched and have grown in popularity in 2022 and early 2023 as the Ethereum network implemented a move to proof-of-stake and began to allow staking withdrawals. As the Ethereum Shanghai upgrade approaches, some experts argue that liquid staking may continue to grow in the future.


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