In recent months, liquid staking has become increasingly popular in the Proof-of-Stake (PoS) ecosystem. Staking your crypto assets in a PoS network locks those assets in the protocol. Staking grants users governance rights and allows them to help secure the network and earn staking rewards. However, because the staked assets are locked, users cannot utilize them for anything. Liquid staking changes this by allowing users to stake while keeping their assets liquid, therefore being able to participate in DeFi (Decentralized Finance) activities.
That brings us to Quicksilver; a Cosmos SDK built PoS blockchain that allows for scaling and communication with the Cosmos ecosystem through the inter-blockchain communication protocol (IBC). The network's native asset $QCK is used for securing the chain via staking, lets you participate in the governance, and is needed to pay for transactions in the Quicksilver network. In this article, we're having a closer look at the features brought to the Cosmos ecosystem by Quicksilver.
Quicksilver will implement Interchain Accounts (ICA) to perform critical functions of the protocol. For example, stakers would enjoy all the benefits of staking on other networks without leaving QuickSilver. How? The Host chain (Quiksilver) will create a deposit and withdraw account on the Controller chain (i.e., Juno) to handle staking rewards for the delegators.
The Interchain Accounts module enables Cosmos chains to perform specific tasks from chain A to chain B without leaving chain A. The Cosmos Hub, Osmosis, Juno, and Stargaze are the Zones to be onboarded at Genesis, all leveraging ICA.
Liquid Staking and Governance by Proxi
At the moment, if stakers want to use DeFi applications, they must unbond their stake, which means they will lose staking rewards and possibly airdrops. Still, they will opt out of their governance rights if they use these assets on a liquid staking protocol. QuickSilver Fixes this!
You can do more with your staked assets when you liquid stake. In the Cosmos Ecosystem, there are numerous examples of liquid staking protocols. Quicksilver's approach, on the other hand, is unique. Users won't need to choose between DeFi or governance; they will be able to engage in both, which will keep users empowered regardless of what they do.
Users' voting rights will be preserved thanks to the governance by proxy feature. How? The protocol will mirror native chain proposals that allow users to vote. The Quicksilver protocol will then reflect users' votes on behalf of delegations, allowing users to participate in governance from their native chains via Quicksilver. It is worth noting that users are not required to unstake their assets to do so. Only protocol-enabled networks will be able to do so.
The features mentioned above will rely on Interchain Queries to work. Interchain Queries (ICQs) function as follows: a Requesting Chain asks for information from the Target Chain. A relayer sends this request to the Target Chain, which replies by providing proof and information to the Requesting Chain. When liquid staking on Quicksilver, your assets are sent from your wallet to a Quicksilver "account" on the native chain, meaning that your assets don't need to go to Quicksilver to use them; this avoids concentrating assets on the protocol and adds an extra security measure.
Other Benefits for $QCK Stakers
Staking rewards fees will be distributed to QCK stakers at the epoch. The fee amount is 5%; however, the community can change this at any time via governance. In the first phase, staking rewards fees collected in $ATOM, $JUNO, and $OSMO will be distributed, as more networks onboard the QuickSilver network, there will be more staking rewards fees for $QCK stakers to earn.
The Genesis Airdrop will reward Stakers on Cosmos, Juno, and Osmosis; after this, stakers on chains boarded to the QuickSIlver protocol will receive airdrops upon onboarding.
The team claims there's a formula based on how you stake instead of how much you stake. More details soon.
The token holders control Quicksilver changes in parameters, incentives distribution, and onboarding zones.
The quicksilver token distribution
You can use $QCK in staking for governance and pay fees + the other incentives for staking.
See $QCK distribution.
The initial allocation of 200 million $QCK is as follows:
Those on schedule 1 (Founders, Core Devs, and Investors) will receive 20% of their total allocation liquid at Genesis and 10% every six months over four years. Those on the (Testnets Incentives) Schedule 2: 20% will receive 20% of their total allocation liquid at genesis plus 10% every three months over two years.
Freshly minted tokens spread as follows:
- 30% as Staking Rewards.
- 30% to the Incentives Pool.
- 30% as Participation Rewards
- 10% to the community pool.
Liquid staking maximizes what you can achieve with your crypto assets. Communities could leverage Quicksilver's ICA, ICQs and Governance by Prox to build economic systems complex on the inside but simple on the outside and enhance the delegators' experience while reducing limitations for developers. Liquid staking is evolving and Stakin is honored to be part of the Genesis Validators on QuickSilver.