Key Points:
LSM empowers users by allowing the conversion of staked ATOMs into liquid assets, reducing the traditional liquidity staking risk. The upgrade was executed at block height 16985500, with the implementation occurring around 9 a.m. ET.
It is designed to temporarily limit the total number of Atoms that can be staked to 25% of the overall staked Atoms within the Cosmos Hub. Crucially, this cap is not set in stone and can be adjusted in the future through a governance vote, providing flexibility and adaptability to the network.
One of the immediate benefits of LSM is that it enables users to directly liquidate their already-staked ATOM tokens without the need to wait for the unbonding period. This development is expected to boost network liquidity significantly, unlocking millions of dollars worth of ATOM tokens and facilitating DeFi activities across the Cosmos ecosystem.
To ensure the security and stability of the network, LSM introduces governance-controlled parameters. Additionally, validators seeking delegations from liquid staking providers will be required to self-bond a certain amount of ATOM, enhancing security measures within the ecosystem.
This update comes at a crucial time for the Cosmos blockchain, as recent data indicated a decline in the total amount of staked ATOM since August 2023. The “Gaia v12” upgrade and the introduction of LSM aim to reinvigorate the staking ecosystem and position Cosmos for continued growth and innovation.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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