The interoperable blockchain network, Cosmos Hub has introduced the Liquid Staking Module following the completion of its latest v12 upgrade.
With the upgrade, Cosmos Hub has now unlocked another dimension for ATOM where it is utilized while securing the network and enabling a broader ecosystem of multiplied liquidity.
Cosmos Hub is the first blockchain among the interconnected network of blockchains launched in Cosmos Network. The pioneer interoperable infrastructure enables developers to build application specific chains called ‘Zone’ within interconnected networks called ‘Hub.’
The proposal to enable ATOM liquid staking was introduced in Cosmos Hub governance in April. However, Cosmos Hub is not the first to offer ATOM liquid staking as protocols such as pStake and Stride have already done it before.
The announcement states that ATOM liquid staking currently has an initial limit of 25%, including third-party staked tokens. The limit is set in order to minimize the risk of a liquidity cascade, as previously described in the proposal.
While making improvements to liquid staking primitive, Cosmos Hub’s Liquid Staking Module (LSM) has introduced governance controlled parameters which enables governing members to update the module dynamically.
In addition, it also requires liquid staking providers to add a certain amount of ATOM tokens themselves to accept tokens via delegation.