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Staked ETH, BNB, ATOM, SOL and MATIC will be usable on Tenet as “restakes” to gain further rewards.
A new Cosmos-based blockchain called “Tenet'' will use liquid staking coins from other networks to secure its transactions, potentially allowing the new network to inherit the security of older ones, according to a May 3 announcement from the developers.
The network is currently available as a testnet and will launch a mainnet version as soon as testing is complete. This comes after liquid staking has recently become the largest decentralized finance (DeFi) protocol category.
Liquid staking protocols such as Lido, Rocket Pool and Ankr allow users to stake their coins with a network of validators and receive rewards without having to run their own nodes. These protocols also provide users with tokens called “liquid staking derivatives,” or LSDs, redeemable for the underlying deposits and rewards.
According to the announcement, Tenet will allow users to “restake” these LSDs to earn additional rewards on its network. And it will provide users with tokens that represent the LSDs themselves. The team calls these third-order tokens “liquid liquid staking derivatives,” or LLSDs. LLSDs will be usable in lending apps and decentralized exchanges throughout the Tenet network, the announcement said.
The team expects there to be 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.” Second, it should “bring additional liquidity and yield opportunities to LSDs.”
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.
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.
Liquid staking protocols have existed since 2020 when Lido was first launched. They grew in popularity in 2022 and early 2023 as the Ethereum network implemented a move to proof-of-stake and began to allow staking withdrawals. On May 1, crypto analytics platform DefiLlama announced that liquid staking had become the top category of DeFi apps when measured by total value locked.
Some experts have argued that liquid staking may grow in the future as a result of the Ethereum Shanghai upgrade.
Article by Tom Blackstone - Source: Cointelegraph
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
