{"id":491999,"date":"2022-09-10T16:42:20","date_gmt":"2022-09-10T13:42:20","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/liquid-staking-is-key-to-interchain-security\/"},"modified":"2022-09-10T16:42:20","modified_gmt":"2022-09-10T13:42:20","slug":"liquid-staking-is-key-to-interchain-security","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/liquid-staking-is-key-to-interchain-security\/","title":{"rendered":"# Liquid staking is key to interchain security"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2d553b6b43e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2d553b6b43e\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/liquid-staking-is-key-to-interchain-security\/#%E2%80%9D_Liquid_staking_is_key_to_interchain_security_%E2%80%9C\" >&#8221; Liquid staking is key to interchain security &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/liquid-staking-is-key-to-interchain-security\/#Interchain_security_matters_for_blockchains_big_and_small\" >Interchain security matters for blockchains big and small<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/liquid-staking-is-key-to-interchain-security\/#Liquid_staking_optimizes_interchain_security\" >Liquid staking optimizes interchain security<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Liquid_staking_is_key_to_interchain_security_%E2%80%9C\"><\/span>&#8221; Liquid staking is key to interchain security &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDkvNWNmZjhmNWUtODMyZC00MGQ3LTg2NjMtNTI2Yzg1ZDg0MWEyLkpQRw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-71846793>Bitcoin\u2019s genesis in 2009 will probably go down in history as one of the most notable technological events of all time. Demonstrating the first real use case for the immutable, transparent and tamper-proof ledgers \u2014 i.e., blockchain \u2014 it established the cornerstone for developing the crypto and other blockchain-based industries.\u00a0<\/p>\n<p>Today, just over a decade later, these industries are thriving. The total crypto market capitalization hit an all-time high of $3 trillion at its peak in November 2021. There are already more than 300 million crypto users worldwide, while forecasts suggest the figure may cross 1 billion by December 2022. Although phenomenal, this journey has merely begun. <\/p>\n<p>Several factors have contributed to the blockchain and cryptocurrency industry\u2019s success so far. But above all, it\u2019s due to certain key features of the underlying <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>: decentralization, trustlessness and data security, to name a few. Leading blockchain networks like Bitcoin are pretty robust as such thanks to their proof-of-work (PoW) consensus mechanism. Globally distributed miners secure these networks by providing \u201chashing\u201d or computational power. Similarly, in the proof-of-stake (PoS) consensus that Ethereum plans to adopt soon, validators secure the network by locking up or \u201cstaking\u201d digital assets. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The truth behind the misconceptions holding liquid staking back<\/em><\/strong><\/p>\n<p>However, the number of miners or validators matters greatly in PoW and PoS, respectively \u2014 more miners or validators means greater security. Thus, only the bigger, more established blockchains can benefit optimally from conventional consensus mechanisms. On the other hand, emerging blockchains often lack the resources to secure their networks fully, no matter their innovative potential.<\/p>\n<p>Bolstering interchain security frameworks is one way of solving this rather pertinent problem. Moreover, with innovations like liquid staking, bigger PoS blockchains can help secure the emerging ones, ultimately facilitating a safer and stabler industry overall.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Interchain_security_matters_for_blockchains_big_and_small\"><\/span>Interchain security matters for blockchains big and small<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>One might wonder why bigger blockchains would even care to share validators with the smaller ones. Isn\u2019t it about meritocratic competition, after all? Of course, it is, but that doesn\u2019t necessarily mean underplaying the role of interoperability or cross-chain mechanisms. Moreover, if emerging but innovative blockchains thrive, it\u2019ll benefit them and the industry as a whole. And this is the key to blockchain technology\u2019s mass adoption, which is the ultimate goal despite all competition. <\/p>\n<p>PoS blockchains are <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly more prone to various majority attacks than their PoW-based counterparts. As Billy Rennekamp of the Interchain Foundation succinctly <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/web.archive.org\/web\/20220223104738\/https:\/\/blockworks.co\/cosmos-hub-and-the-future-of-shared-security\/\">pointed<\/a> out, \u201cIf one can control one-third of a network, they can do censorship attacks and if they control two-thirds of the network, they can control governance and pass a proposal for a malicious upgrade or drain the community pool with a spend proposal.\u201d<\/p>\n<p>Having said that, over 80 blockchains already use PoS, with more to come in the near future, including Ethereum. This is primarily because of the massive energy consumption and environmental impact of PoW chains. But while this change is welcome, it could cause an industry-wide security crisis without robust measures. If that h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ens, the industry will lose investors\u2019 confidence, and everyone will suffer, including the bigger chains with well-established PoS networks. Thus, enhancing interchain security is a win-win approach and, indeed, the need of the hour. <\/p>\n<h2><span class=\"ez-toc-section\" id=\"Liquid_staking_optimizes_interchain_security\"><\/span>Liquid staking optimizes interchain security<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>So much for the rationale behind interchain security. It is, in fact, already in action, thanks to the Cosmos Hub. However, the journey is far from complete. It\u2019s possible to take interchain security to the next level with innovations such as liquid staking. <\/p>\n<p>For the uninitiated, liquid staking unlocks the liquidity of assets staked (locked up) in PoS blockchains or other staking pools. This is crucial because, otherwise, the staked liquidity remains underutilized. Users cannot use their staked assets in decentralized finance (DeFi), which restricts them from generating optimal yields. By offering tokenized derivatives of these staked assets, liquid staking allows individuals to reap the benefits of staking and DeFi simultaneously. This enables additional utility besides maximizing yield.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The many layers of crypto staking in the DeFi ecosystem<\/em><\/strong><\/p>\n<p>If these advantages appear too money-minded to some people, it\u2019s because they overlook a more critical aspect. The mechanism allowing liquid staking protocols to liberate locked values also enhances interchain security. In simple terms, this works by letting validators on established PoS blockchains like Cosmos \u2014 aka the provider chain \u2014 verify transactions on smaller \u201cconsumer\u201d chains. Validators won\u2019t go rogue in the process since that would mean losing the assets they staked on the provider chain.<\/p>\n<p>However, the more specific significance of liquid staking is that it broadens the scope for interchain security. The liquid-staked assets can represent the value of assets staked on any producer chain, which can then be used to share validators with mostly any consumer chain. In other words, what\u2019s currently possible primarily on Cosmos can be widely accessible with liquid staking.<\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Tushar Aggarwal<\/strong> is a Forbes 30 Under 30 recipient and the founder and CEO of Persistence, an ecosystem of bleeding-edge financial applications focusing on liquid staking.<\/div>\n<\/div>\n<p><em>This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/liquid-staking-is-key-to-interchain-security\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Liquid staking is key to interchain security &#8220; Bitcoin\u2019s genesis in 2009 will probably go down in history as one of the most notable technological events of all time. Demonstrating the first real use case for the immutable, transparent and tamper-proof ledgers \u2014 i.e., blockchain \u2014 it established the cornerstone for developing the crypto&#8230;<\/p>\n","protected":false},"author":1,"featured_media":492000,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDkvNWNmZjhmNWUtODMyZC00MGQ3LTg2NjMtNTI2Yzg1ZDg0MWEyLkpQRw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,112348,75793,74863,74876,75578,20093,70375,72287],"class_list":["post-491999","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-chain","tag-consensus","tag-cryptocurrencies","tag-proof-of-stake","tag-proof-of-work","tag-cosmos","tag-cybersecurity","tag-security"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/491999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=491999"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/491999\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/492000"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=491999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=491999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=491999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}