Stride, a liquid staking protocol built on Cosmos, has unveiled its plans to migrate from the current STRD token model to Cosmos’ interchain security (ICS) system. This transition will harness the power of ATOM tokens to bolster economic security and fortify the liquid staking protocol against potential hacking attempts.
Strengthening Economic Security through ICS System
According to Lan Unsworth, a contributor to Stride, the transition to Cosmos’ ICS system is scheduled to take place on a designated Wednesday, between 17:00 UTC and 21:30 UTC, specifically at block height 4616678. This move will transfer block production and security responsibility from the existing Stride validator set to the ATOM validator set.
Significant Boost in Economic Security
With the implementation of the ICS system, Stride’s economic security is expected to experience a substantial surge. Unsworth stated that the transition will result in a remarkable increase of approximately 11,935.2%, propelling Stride’s economic security from roughly $25 million to an impressive $2.3 billion.
Leveraging Cosmos’ Interchain Security
Cosmos’ interchain security functions by leasing ATOM-backed validators to consumer chains, enabling them to benefit from the security offered by Cosmos using ATOM tokens instead of their native tokens. Cosmos Hub acts as an intermediary blockchain for all independent blockchains within the Cosmos network, employing a proof-of-stake consensus mechanism that involves ATOM tokens.
Stride’s Transformation into a Consumer Chain
Through the transition, Stride will transform into a consumer chain, relying on staked ATOM tokens for security instead of STRD tokens. The Cosmos validator set will assume the responsibility of block production, taking over from the existing Stride validator set. Despite these changes, STRD tokens will continue to hold utility and generate staking rewards.
Impact on Tokenomics and Interconnectedness
The migration to the ICS system will also have implications for STRD’s tokenomics. Stakers have agreed to reduce the distribution of STRD as staking rewards by 50%, while 15% of the staking rewards from STRD will be shared with Cosmos Hub. This adjustment further strengthens the interconnectedness between the two protocols, fostering collaboration and mutual growth.
Market Overview and Future Outlook
As of now, STRD tokens have a market capitalization of approximately $87.61 million, while ATOM tokens hold a market value of $2.707 billion, according to Coingecko. The transition to Cosmos’ ICS system showcases Stride’s commitment to enhancing economic security and aligning with a larger network of validators within the Cosmos ecosystem.
With its fortified economic security and improved resilience against potential hacking attempts, Stride is poised to navigate the dynamic landscape of decentralized finance with increased confidence. As the transition takes place, users and stakeholders can look forward to a more secure and efficient liquid staking experience within the Stride protocol.
