Blockchain

Cosmos Hub Launched The “Gaia V12” Upgrade, Introducing The Liquidity Staking Module

Cosmos Hub Launched The "Gaia V12" Upgrade, Introducing The Liquidity Staking Module

Key Points:

Cosmos Hub launches the “Gaia v12” upgrade with the Liquid Staking Module (LSM) for enhanced liquidity.
LSM temporarily caps staked ATOMs at 25% and adds governance controls for security.
The upgrade aims to rejuvenate Cosmos and foster DeFi growth amid recent stake declines.

In a significant development, Cosmos core developers have executed the anticipated “Gaia v12” upgrade on the Cosmos Hub blockchain. This upgrade marks a milestone for the ecosystem, bringing forth the Liquid Staking Module (LSM), a groundbreaking feature designed to enhance the platform’s functionality.

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.

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Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.