liquid-staking

Chorus One has received a grant from the Interchain Foundation to explore the concept of Liquid Staking (also referred to as Programmable Staking or Staking Derivatives).

During the four month project, we will explore the different ways staked assets will be tokenized and the implications on the sustainability of the Internet of Blockchains.

The approaches we will investigate include:

• Delegation vouchers
• bAtoms / Everett model (including implications of interchain accounts / delegated account control)
• B-Harvest delegation DEX and tranches
• Slashing insurance using prediction markets
• The impact of decentralized control of assets using sMPC / BLS (tBTC, Ren, Herdius etc.)
• Centralized staking offerings from Binance, Poloniex, Kraken etc.
• Various staking pool designs, particularly DAO-like models where ownership of a share of the pool is controlled by a token

Note: since ICF funding was approved we've also identified Stake Capital DAO, Stafi, Cryptium's Programmable Staking and Staker DAO as relevant projects to investigate.

The deliverable for the project are as follows:

• A research report (30+ pages)
• An executive summary of the research (< 10 pages)
• A curated list of liquid staking products, services and ideas

Within the research report we would try to take a 360° view of staking derivatives, covering the following areas:

• Impact on network security
• Centralization risks
• Impact on network governance
• Competition between protocols
• Risks and benefits of financialization
• Staking in a cross-chain context, e.g. moving assets to / through low security zones, bridges & peg zones
• Impact on shared security & launching new chains

We will maintain the focus on making this a community initiative. We will run calls every two weeks for the duration of the project. The project duration is four months, so as to allow plenty of time for collecting and reviewing input from the community.

The first milestones:

• Project annoucement - Jan 10th
• First community call - Wednesday, Jan 15th @ 5pm CET
• Second community call - Wednesday, Jan 29th @ 5pm CET

Agenda for first call:

• Overview of liquid staking
• Introduction to some of the potential challenges
• Discussion on Design Principles - what are the characteristics we'd like to see in an ideal liquid staking model?

Chorus Team project roles:

• Brendan Dillon - Strategy & Bus. Dev. - Brendan will be the overall project coordinator
• Felix Lutsch - Research Analyst - Felix will compile the final detailed research report
• Brian Fabian Crain - Founder/CEO - Brian will prepare the executive summary
• Meher Roy - Founder/CTO - Meher will be participate in the community calls, forum discussions etc.

If you'd like to join the initiative please contact us as brendan@chorus.one or through the Chorus One website

Our sincere thanks to all at the Interchain Foundation for funding this work.