Cosmos Hub Offers Liquid Staking Following Upgrade

Cosmos Hub Offers Liquid Staking Following Upgrade
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Cosmos Hub has upgraded to offer a liquid staking module that enables users to skip a 3-week unbonding period by staking Cosmos Network (ATOM).

Prior to the upgrade, all ATOM token holders had a locked period of 21 days to move all of their funds right after unstaking the token. Following the introduction of the new module, staked ATOM tokens can now be used in the Cosmos DeFi ecosystem without compromising yields from staking. The staking process involves users holding their tokens to validate transactions and secure a blockchain network.

All participants receive rewards for their contribution, and the process is almost identical to earning interest on a particular savings account. As per the statement of the pseudonymous Cosmos validator, Cryptocitos, the new module would set the stage for the unlocking of ATOM tokens worth more than $400 million. The liquid staking module would also play a major role in accelerating the presence of staked tokens in protocols running on Cosmos.

Cosmos Hub’s Latest Upgrade and Its Key Elements

The recent announcement clarifies that the implementation of the liquid staking module means the elimination of a 21-day waiting period to unbound and would also get rid of choosing between DeFi or staking. Following the development, the ATOM token was seen to be trading in the green. At the time of writing, the token has surged by almost 1.71% in the previous 24 hours. The increase has pushed the trading price up to $6.54 and the market cap currently stands at the $2.3 billion mark.

Cosmos Hub Offers Liquid Staking Following Upgrade

Furthermore, the introduction of liquid staking by Cosmos would also enable regular holders to cancel unbondings already in place. This would allow ATOM to return to regular staking and be used in the liquidity staking module. Another expected impact will be seen in the token’s inflation rate.

The current bonded ratio for the token is 67.8%, and if it manages to stay above 66.67%, the inflation rate will continue to go down to a floor of 7%. The higher the bonded ratio, the faster the inflation rate decreases. ATOM holders would also be subject to a 25% cap on the total amount of tokens they can liquid-stake.


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