pSTAKE Thesis: Cosmos Liquid Staking will be the Biggest Market in Crypto.

Cosmos Liquid Staking is Inevitable

Ethereum liquid staking market stands strong with ETH-based LST protocols leading the charge today. While one of the biggest macro trends in Crypto (Liquid Staking and Restaking) plays out, Cosmos is expanding parabolically and often going unnoticed.

Cosmos will see one of the most significant value creation unfold in the coming months and years. dYdX. Celestia. Dymension. Hyperlane. Eclipse. Akash. Injective. Persistence One. Initia. The list is limitless.

While exciting, it’s something that pSTAKE Finance has bet on quite early on and positioned itself to be the first and the most unique liquid staking protocol.

In this blog, we go through the Cosmos Liquid Staking Market, pSTAKE’s Cosmos thesis, and how pSTAKE Finance is a strong force in capturing market share.    

Imagine a multi-trillion-dollar world full of secure PoS blockchains and flourishing DeFi. That world needs Liquid Staking. That world, in our view, cannot function without pSTAKE Finance.

We believe in a future where LSTs become the default medium of exchange, value, and utility in Crypto (over native tokens). That is the future pSTAKE is building towards. A future where LSTs of multiple leading PoS chains like Cosmos Hub, dYdX, Osmosis, and Celestia are not only issued by pSTAKE on the Persistence One Chain but have widespread DeFi adoption like Decentralized Exchanges, Money Markets, Perpetuals, Options and more. 

Cosmos Liquid Staking is inevitable.

How big is the Cosmos Liquid Staking market?

Cosmos is a place like no other. Contrary to other ecosystems like Ethereum or Solana, where liquid staking is dominated by only one native token ($ETH or $SOL), the Cosmos Liquid Staking market is a combination of all app chains that are live and will ever come into existence.

Currently, Cosmos Ecosystem chains have a combined market cap of $112B+. BNB Chain currently accounts for a whopping 71.4% (~$80B market) of the total addressable market.

pSTAKE has shipped liquid staking solutions for 4 of the Top 15 assets (BNB, ATOM, DYDX, OSMO) in Cosmos with a plan to expand support to other existing assets in the near future. As new-era projects launch in Cosmos, the opportunity for pSTAKE to issue LSTs also increases.

pSTAKE’s Cosmos Liquid Staking Thesis

By now, it must be pretty clear that Cosmos can very well become the leading liquid staking market in all of crypto.

But what does the future of Cosmos Liquid Staking entail? How will liquid staking evolve? Will it only be limited to Staking AND DeFi?

How is pSTAKE well-positioned to capture this expected boom? Let’s dive in.

Over 30% of a major Cosmos chain’s stake might be liquid staked.

As more extensive LST-specific use cases are built out and the chain’s token inflation reduces, liquid staking will become the norm in Cosmos.

In the case of the biggest Cosmos Ecosystem markets like BNB Chain (BNB) and Cosmos Hub (ATOM), the room for liquid staking growth is parabolic.

63.8% of the total ATOM supply is currently staked. Only 2% of the total ATOM staked is through liquid staking protocols. The same figure on Ethereum is ~47%, showing huge untapped potential.

pSTAKE is present on 4 of the Top 15 Cosmos chains and is aggressively expanding to other major ones. This, combined with pSTAKE’s key differentiators like ecosystem alignment, decentralization, and a colossal incentivization war chest, could result in substantial value capture.

Liquid Staking will evolve from just Staking AND DeFi. 

Liquid Staking is primed to become more custom-built and tailored to the ecosystem’s needs. While high chain security and liquidity on staked tokens will continue to be necessary for all Cosmos chains, DeFi might not necessarily be the most suitable utility for all LSTs.

Some ways that pSTAKE LSTs could find niched use cases:

With an existing track record of building custom solutions, pSTAKE is ready to adopt its liquid staking solutions to demands and become a significant value add to every ecosystem it is present in.

Cosmos chains will adopt 1-click liquid staking.

Cosmos has one of the best liquid staking user experiences. Imagine going from a natively staked position to a liquid staked position in a single click without any unbonding period.

Thanks to the Iqlusion Team and other ecosystem contributors, this is a reality in Cosmos with the ‘Liquid Staking Module (LSM)’. A Cosmos chain needs to add this module to its tech stack for the above to work. Only Persistence One (XPRT) and Cosmos Hub (ATOM) support the LSM.

While pSTAKE was the first liquid staking protocol to launch the LSM feature for ATOM, it is soon launching the first and only solution for XPRT, a ~$90M market currently.

As ecosystems will want flourishing liquid staking landscapes, the LSM will be a superpower in liquid staking adoption, with pSTAKE holding superior expertise to support any chain that adopts it.

LST holders may see bigger airdrops than native stakers.

ATOM, especially stakers, has been subject to a few of the biggest airdrops that crypto has ever seen. Celestia, Osmosis, Neutron. The list is endless. And the list will remain to be endless.

Liquid Staking users are among the most savvy and risk-taking DeFi users. As projects launch to elevate the DeFi landscape in Cosmos, they will want to align with this particular user persona in Cosmos to make them a core and foundational part of their communities.

Including LSTs in airdrop involves logistical and infrastructural development for projects. But with pSTAKE, that will never be a hurdle. pSTAKE has built a solution for projects to get stkTokens’ holder addresses at any given block (time) in a single click, eliminating any extra overhead on the project.

Upcoming projects like Aether have already confirmed that they will be airdropping to stkATOM by pSTAKE Finance holders.

Liquid Staking Security will become a major consideration.

As Cosmos Liquid Staking scales, it will be important to do so securely. As chain’s reach higher adoption of security, mechanism and design considerations to uphold strong decentralization may become crucial. A chain’s limitation to support liquid staking could be addressed by creating solutions that may not be as secure as they should be.

pSTAKE leverages the Cosmos Infrastructure and tech stack to deploy non-custodial liquid staking solutions with no admin multi-sigs having control over it’s TVL.

Leading Cosmos Liquid Staking

pSTAKE has a clear goal. Becoming the leading liquid staking provider in Cosmos.

pSTAKE has very extensive differentiators. Focus on decentralization and security. Superior user experience. Maximizing LSTfi yields with widespread DeFi utility. New partnerships. Ecosystem alignments.

pSTAKE’s initial Cosmos Thesis has played out very well with the early bet it took in 2021 by pioneering liquid staking. Now, in 2024, pSTAKE envisions Cosmos becoming the largest liquid staking market and is accelerating at light speed to become the biggest liquid staking protocol in Cosmos.

More LSTs. More Yield. More TVL. More Traction.