In a significant transition illustrating the fluidity of cryptocurrency ecosystems, the Cosmos-based liquid staking protocol, Stride, is positioned for a major shift in security measures. The current Stride (STRD) token model is forecasted to convert to Cosmos’ interchain security system, powered by ATOM tokens. According to Stride’s contributor, this change is likely to unfold on Wednesday within a specified UTC timeframe.
Stride’s present economic security, backed by bonded network tokens, stands at a resolute $19 million. However, with a total value locked over $35 million, the impending transition to the ATOM validator set will result in an astonishingly elevated network security – an approximate increase of 11,935.2%. It is interesting to deduce that post-transition, the economic security is reported to skyrocket from $25 million to an astounding $2.3 billion.
Subsequent to the transition, Stride will transition from its existing token security, STRD, to a governance model driven by ATOM. This essentially degrades Stride to a consumer chain status, handing over the reins of block productions to ATOM’s validator set. It’s pertinent to note that STRD tokens will maintain their utility, continuing to yield staking rewards.
Interestingly, the security transition could influence STRD’s tokenomics, due to stakers’ decision to slash STRD staking rewards disbursed by a significant 50%. Additionally, Cosmos Hub is set to reap further dividends with an assurance of a shared 15% of STRD staking rewards.
Concurrently, despite a 100 million token hard cap, STRD’s annual staking rewards are scheduled for a 50% reduction, a move destined to occur ahead of its transition to Interchain Security.
Although a remarkable transition is underway, scepticism may arise that this move could potentially dilute the sovereignty of the Stride network. The transient market dynamics of ATOM could also pose unforeseen risks. On the flip side, this shift is likely to buffer Stride from security threats, enhancing its resilience against cyber-attacks.
To wrap up, the transition towards the ICS will impact Stride’s economic security, tokenomics, and future trajectory. However, in the heart of this change is a pivotal opportunity for Stride to fortify its network, while striking a balance between security and sustainability.
Source: Coindesk
