Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Stride, the liquid staking protocol developed on the Cosmos platform, is poised to embark on a notable transition from its current token framework to the interchain security (ICS) system of Cosmos, which is driven by ATOM tokens. This initiative aims to bolster the economic security of the protocol and strengthen its defenses against potential cyber threats. The transition is anticipated to occur on Wednesday at block height 4616678, as stated by Stride contributor Ian Unsworth.
Enhanced Economic Security and Block Production:
At present, Stride holds more than $35 million in total value locked, but it has only $19 million in economic security derived from bonded network tokens. However, following the switch to ICS, the protocol will delegate block production and security duties to the ATOM validator set. This alteration will yield a remarkable 11,935.2% surge in the network’s economic security, elevating it from around $25 million to $2.3 billion, according to Unsworth.
The Function of Cosmos’ Interchain Security:
Cosmos’ interchain security allows consumer chains like Stride to harness the security offered by the Cosmos network by leasing validators backed by ATOM. This framework permits chains to use ATOM tokens instead of their own native tokens to take advantage of Cosmos’ security features. In this instance, Stride will transition to being secured by staked ATOM rather than STRD tokens. The Cosmos Hub, serving as a bridge among independent blockchains within the Cosmos network, utilizes a proof-of-stake consensus mechanism that involves ATOM tokens.
Related Posts
Modifications to Tokenomics and Staking Rewards:
Post-transition, Stride will function as a consumer chain, with the Cosmos Hub validator set engaging in its consensus and block production. Although STRD tokens will maintain their utility and continue to yield staking rewards, the tokenomics will undergo adjustments. Stakers have consented to halve the distribution of STRD as staking rewards by 50%. Furthermore, 15% of the STRD staking rewards will be allocated to the Cosmos Hub.
Preparation Upgrade and Hard Cap:
As part of the preparatory upgrade prior to the transition to ICS, the issuance of STRD as staking rewards will be cut by 50%. The initial tokenomics established the issuance at 2,608,200 STRD in the first year, but it will be modified to 1,304,100 STRD on an annual basis. It is crucial to highlight that STRD has a hard cap of 100 million tokens.
The transition of the Stride Protocol to Cosmos’ interchain security system driven by ATOM tokens signifies a pivotal advancement toward enhancing the economic security of the protocol. This shift will result in a substantial increase in economic security and transfer block production responsibilities to the ATOM validator set. This initiative reflects the protocol’s dedication to resilience and lays the groundwork for a more robust and secure liquid staking ecosystem.
The post Stride Blockchain Will Move to ATOM-Powered Security Model appeared first on BitcoinWorld.
