In recent blockchain news, Ether staking giant, Lido, partners with two projects from the Cosmos blockchain ecosystem, incorporating a new shift that could see the movement of millions of dollars in liquidity between two blockchains like a seismic tide. This move highlights a growing interest in liquid staking, which has rapidly emerged as a favoured strategy for digital asset investors to yield on their stakes.
Liquid staking – a process that allows users to keep their locked-up tokens liquid through derivative tokens – have risen to be a titan in the decentralized finance (DeFi) arena. Currently, the sector brims with a monumental $16 billion worth, according to data fetched from DefiLlama. Extending this titanic reach, Lido’s stETH comes accompanied by a stunning market capitalization of $13.8 billion.
To serve the dual purpose of rebasing and providing a wrapped, auto-compounding asset, Lido’s tokens will be bridged to Cosmos in two types: stETH and wstETH respectively. For the implementation of this significant task, Neutron and Axelar, a pair of renowned cross-chain platforms, have been chosen by Lido. In lending their services to this task, Neutron and Axelar have both committed a well-measured segment, precisely 1% of their respective token initiatives, to construct liquidity for wrapped stETH and wstETH.
However, this point also brings forth an interesting ‘crypto-drama’. Curiously, the aforementioned decision does spark an air of contradiction. On one hand, it’s a promising step, providing digital asset investors with opportunities for inter-chain transactions and increased liquidity. On the other, by design, blockchain assets aim for decentralization whereas bridges may create certain points of central authority, thus moving the ethos towards a centralized model.
Regardless, the enthusiasm in the digital corridors is palpable. As Avril Dutheil, a core contributor to Neutron, professes, the move to bring Lido’s staked ETH to the Cosmos ecosystem is both a reflection of cross-chain support value and a commitment to ushering in liquidity and users to this system. Once within the Cosmos realm, the wstETH token can operate on several blockchains crafted on the Cosmos’ Inter-Blockchain Communication (IBC) technology platform. Counting amongst these are renowned entities like Cosmos, Cronos, Sommelier, and well-established DeFi protocols such as Osmosis and dYdX.
Source: Coindesk
