A proposal to onboard bATOM (wrapped stkATOM) as collateral on Anchor Protocol has been submitted. This carries profound implications for the Anchor Protocol community, ATOM stakers and UST.
🌐 Proposal: https://forum.anchorprotocol.com/t/proposal-onboarding-batom-as-collateral/3786
Read below to learn more about bATOM and how it’s poised to benefit the ecosystem.
bATOM is wrapped stkATOM on the Terra chain (essentially staked ATOM on Terra). By onboarding bATOM as collateral, Anchor Protocol would be the first DeFi lending option for ATOM stakers, enabling new opportunities for the Cosmos community.
ATOM holders can stake via pSTAKE in order to mint stkATOM, a representative ERC20 token pegged 1:1 to a native ATOM being staked on Cosmos. stkATOM becomes bATOM when bridged over to the Terra network. bATOM could then be used as collateral on Anchor to borrow UST.
Demand for stkATOM is soaring. With 1.3 million ATOM having been staked via pSTAKE, pSTAKE has quickly grown to become the most prominent ATOM liquid staking solution.
This growth is reflective of:
♦️Increased demand for liquidity for staked assets
♦️The growth of ATOM and traction of the Cosmos ecosystem
Alongside this increase in traction comes an increased demand for yield-generating DeFi opportunities for stkATOM. Onboarding bATOM as collateral on Anchor Protocol is a prospect which would not only benefit ATOM stakers, but also Anchor and UST.
Unlocking New DeFi Opportunities
Using pSTAKE and Anchor, ATOM holders could stake while being able to participate in DeFi using UST, incentivizing more ATOM holders to stake in order to take advantage of the new opportunity.
Example yield strategies using UST:
♦️Deposit onto Anchor for ~20% APY
♦️Farm on DEXs including Osmosis & Astroport
♦️Provide liquidity on Mirror Protocol to farm MIR
The UST could also be traded to increase the user’s ATOM position or gain exposure to other assets.
Bringing More Users to Both Anchor Protocol and pSTAKE
Cosmos is a top-10 network in terms of staked value, with over 63% of the ATOM supply ($5.2B+) staked. The addressable market is significant, as is the growing demand for generating extra yield on staked ATOM.
While pSTAKE facilitates the creation of liquid staked PoS assets, Anchor enables holders to utilize such assets in DeFi for more opportunities. bATOM on Anchor minted by pSTAKE would bring more users and TVL to both Anchor and pSTAKE.
Accelerating the Growth of UST
UST has quickly risen to become the largest decentralized stablecoin by market capitalization, driven by the growth of the thriving Terra ecosystem.
Onboarding bATOM to Anchor would increase the utilization ratio of deposited UST and spur demand for UST within the Cosmos ecosystem, further accelerating growth.
Strengthening DeFi on Multiple Fronts
The intersection of pSTAKE and Anchor would bring multi-fold benefits to the Terra and Cosmos ecosystems.
bATOM being onboarded to Anchor as collateral would broaden the DeFi opportunities for ATOM sakers while increasing demand for UST and further bridging the Cosmos & Terra networks.
Would you like to see bATOM on Anchor? Share your thoughts on the Anchor forum.
pSTAKE is a liquid staking solution that unlocks the potential of staked PoS assets (e.g. ATOM). PoS token holders can deposit their tokens on the pSTAKE application to mint 1:1 pegged ERC-20 wrapped unstaked tokens, which are represented as pTOKENs (e.g. pATOM) that can then be transferred to other wallets or smart contracts on the Ethereum network to generate additional yield.
Currently, pSTAKE issues 1:1 pegged ERC-20 liquid staking representative tokens on the Ethereum network, with a long-term aim of building a multi-chain protocol issuing liquid staked representatives on multiple networks including the Persistence Core-1 chain.
Developed by Persistence
Persistence is building an ecosystem of decentralized applications whose financial activities drive value accrual for $XPRT, which lies at the core of the Persistence ecosystem.
The key focus for the Persistence team is to drive significant economic activity on the Persistence Core-1 chain, thereby accruing value to XPRT. This goes hand-in-hand with our vision of evolving pSTAKE’s stkASSETs to become the core assets of the PoS economy.
Persistence’s Core mainnet is a Proof-of-Stake chain powered by Tendermint BFT consensus engine. Persistence’s multi-chain tech stack (currently supporting Cosmos, Ethereum, and other Tendermint-based chains) abstracts away the complexities for developers and enables them to create DEXs, marketplaces, lending/borrowing platforms, etc.
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