Moonkitt

What is the Liquidity Staking Module (LSM)? ​

The iqlusion team spearheaded the development of the Liquidity Staking Module (LSM) in August 2021, culminating in its official integration into the Cosmos Hub v12 upgrade on September 13, 2023.

This innovative module revolutionized staking on the Cosmos Hub by introducing instant transfers: Previously, staked tokens required a waiting period before being moved. The LSM eliminates this delay, allowing immediate transferability.

Key features ​

The module utilizes specific features like:

  • Liquefy: Converts your stake into a tokenized version for instant transfer,
  • Solidify: Converts the tokenized stake back into its original, native form.

While these features unlock exciting possibilities, they also introduce new risks. For a deeper understanding of these potential risks, please visit our dedicated Security section.

Important Note for DeFi Users

Our app's liquid stake offers convenient transferability, but due to technical constraints within the LSM, these tokens are not currently compatible with DeFi protocols. To participate in DeFi, you'll need to convert your liquid stake to stATOM, qATOM, or stkATOM.

LSM Adoption: Current Status and Future Outlook ​

As of now (early May 2024), the Cosmos Hub remains the only chain that has officially integrated the Liquidity Staking Module (LSM) into its code.

However, exciting developments are on the horizon:

  • IRISnet Integration: IRISnet recently announced its 3.0 Upgrade, scheduled for mid-May 2024. This upgrade is expected to include the LSM, and Moonkitt is committed to integrating IRISnet within our app once it's live on their chain,
  • Cosmos SDK Integration: While the initial plan was to integrate the LSM directly into the Cosmos SDK, used by many blockchains in the ecosystem, it seems this approach has shifted. Nevertheless, Moonkitt remains committed to promoting its adoption and actively advocating for other chains to follow the Cosmos Hub's example.

IMPORTANT

The LSM offers crucial security measures currently missing on chains without it. This is particularly important because, on non-LSM chains, liquid staking providers can potentially accumulate excessive voting power, jeopardizing the overall decentralization. See the Security section on the safeguards offered by the LSM.