pSTAKE Finance brings liquidity stakes and a new airdrop to the Cosmos ecosystem
pSTAKE Finance brings liquidity stakes and a new airdrop to the Cosmos ecosystem.
One of the most significant transitions that has taken place in the crypto ecosystem since the inception of Bitcoin (BTC) is the growing dominance of Proof-of-Stake (PoS) protocols over the Proof-of-Work (PoW) equity model, mainly due to of the performance requirements of the PoW model and growing concerns about its environmental impact.
As more projects are launched or transitioned to the PoS model, a new layer of protocols has emerged that focuses on providing liquid staking options that allow holders to mine the value of the tokens staked while making a profit by locking their assets on the network.
pSTAKE Finance is one such platform, and here’s a quick look at their long-term goal of making the PoS model more useful and how it differs from similar protocols.
Project backer with $10M seed funding round
The pSTAK project is part of the Persistence Protocol (XPRT), a multi-chain technology powering Cosmos (ATOM), Ethereum (ETH), and other Tendermint-based chains. Persistence’s long-term mission is to create an ecosystem of multi-chain Web 3 products designed to stimulate global liquidity and enable easy exchange of value.
The project received a boost in November 2021 following the successful completion of a $10 million seed funding round from investors including Three Arrows Capital, Galaxy Digital, Coinbase Ventures and Alameda Research.
The funds raised in the seed round were used to provide the necessary reserves to boost the protocol’s liquidity and ensure there was enough liquidity for users to join the platform.
Since inception, pSTAKE has provided liquidity stakes for Cosmos and XPRT, which have annualized returns of 12% and 32%, respectively. Users who put ATOM or XPRT on the protocol receive stkATOM or stkXPRT in return, which can then be used for various functions in DeFi, including borrowing and lending.
According to Defi Llama, the pSTAKE protocol currently has a total value (TVL) of $48.63 million.
Total value locked on pStake | Source: Defi Llama
The developers behind the project are currently working on adding support for other tokens, including Ether, Terra (LUNA) and Solana (SOL).
Staking liquidity for the Cosmos ecosystem
While it would be nice to have new protocols that offer liquidity staking, an important question to ask is how this project compares to the competition.
For example, Lido is a liquidity staking protocol that already has support for Eth2, Terra, Solana, and Kusama and has a TVL of $9.35 billion.
The main difference of pSTAKE is that it appears outside of the Cosmos ecosystem and is primarily focused on increasing liquidity for other protocols that reside on the Inter-Blockchain Communication Protocol (IBC) by adding interoperability to Ethereum Virtual Machine (EVM).
While Lido supports Terra, pStake is the only protocol that supports ATOM and other Tendermint-based projects.
Once acquired, stkTOKEN is available for use in various DeFi protocols within the Ethereum ecosystem, allowing holders to generate additional profits.
Airdrop pSTAKE and ongoing developments
Above all, pSTAKE is focused on scaling the community and expanding its services by adding support for other projects in the Cosmos ecosystem.
To encourage community support and reward early adopters, the project launched its pSTAKE airdrop, distributing 30 million pSTAKE over the next six months to multiple addresses including stakers from ATOM, OSMO and XPRT.
“Explaining the pSTAKE airdrop. As of February 24th, 30 million pSTAKE will be airdropped over the next 6 months:
- ATOM, XPRT, OSMO stacker
- Holders of stkAAVE, CRV (including yveCRV, cvxCRV)
- Early pSTAKE subscribers
- StakeDrop Cosmos Participant, XPRT”.
On the development side, one of the key collaborations currently being explored is with Terra’s Anchor Protocol (ANC), a savings protocol responsible for minting the stablecoin TerraUSD (UST).
“Discover pSTAKE and anchor synergies. The Anchor protocol represents the gold standard of DeFi savings. pSTAKE is the most well-known ATOM liquidity staking solution. Collaborating on new bAssets (e.g. bATOM) will benefit both while opening up new DeFi opportunities for players.”
Eventually, this integration allows ATOM to be used as collateral to mint UST on Anchor, which is currently only possible with LUNA and Ether.
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