Proposal #912, a revolutionary project inside the Cosmos network, was successfully passed, according to a recent announcement from the Decentralised Cooperation Foundation (DCF).

Cosmos Network, a blockchain ecosystem renowned for its capacity to link several blockchains, is moving closer to increased liquidity and capital efficiency by building on a foundation of interoperability.

TThe proposal, a major initiative to unleash these benefits through liquid staking solutions, was just passed by the community.

This action demonstrates how liquid staking is becoming more and more popular in the Proof-of-Stake (PoS) blockchain market.

Comprehending Liquid Staking

Staking coins for network validation on conventional PoS blockchains frequently locks them up for a predetermined amount of time. This lowers the supply that is in circulation and may impair network liquidity as a whole.

A solution is provided by liquid staking, which creates derivative tokens that stand in for staked assets These derivative tokens can be freely traded on secondary markets, essentially unlocking the liquidity of staked assets.

Cosmos’ Implementation

Proposal #912 outlines a two-phased approach to leverage liquid staking. Initially, 4% of the Cosmos Community Pool’s idle ATOM tokens (Cosmos’ native token) will be allocated for liquid staking on Stride and Persistence, established liquid staking platforms within the Cosmos ecosystem.

This strategic deployment is projected to increase capital efficiency on staked ATOMs by an estimated 18%. If successful, an additional 6% of the Community Pool will be allocated, bringing the total to 10%.

The Decentralized Cooperation Foundation (DCF)

The Decentralized Cooperation Foundation (DCF), a non-profit organization promoting accessible and efficient blockchain solutions, played a role in sponsoring this proposal. Their involvement underscores the importance of community-driven efforts within the Cosmos ecosystem.

“The passage of proposal #912 is a testament to the Cosmos community’s commitment to innovation and decentralized governance,” says Ric Shreves, President of the Decentralized Cooperation Foundation.

Inter Protocol’s Inter Stable Token (IST)

A crucial element of the proposal is the Inter Stable Token (IST). Liquid staked assets will be used to mint IST, a stablecoin designed to maintain economic stability within the Cosmos network.

These IST tokens will be distributed to various liquidity pools, generating an estimated combined yield of 18%. The use of a stablecoin aims to mitigate the volatility often associated with cryptocurrency markets.

A look ahead

The successful implementation of proposal #912 has the potential to serve as a model for future blockchain initiatives within the Cosmos ecosystem.

By improving liquidity and capital efficiency, this initiative opens the door for further innovation and a more interconnected digital future. It also highlights the power of decentralized governance within the Cosmos community.

This move by the Cosmos community illustrates a growing recognition of the potential benefits of liquid staking in the PoS blockchain space.

While the long-term implications remain to be seen, the projected increase in capital efficiency and the introduction of a stablecoin element aimed at maintaining economic stability are positive developments.

The success of proposal #912 will likely be closely watched by other blockchain ecosystems dealing with similar liquidity challenges.