LSD for DeFi: Tenet, LayerZero partner to drive cross-chain liquid staking adoption

May 30, 2023 Coin Telegraph

Cross-chain interoperability protocol LayerZero’s infrastructure aims to drive liquid staking adoption across the DeFi ecosystem.

Layer-1 blockchain Tenet is set to see its liquid staking derivatives platfrom plug into a cross-chain decentralized finance (DeFi) ecosystem through a partnership with omnichain messaging protocol LayerZero.

Tenet has plugged into LayerZero’s cross-chain protocol to access the wider DeFi ecosystem across a number of different blockchains. The Cosmos-based blockchain is a DeFi-focused ecosystem which provides liquidity and yield products for liquid staking derivatives (LSDs).

LSDs have been a central cog in the DeFi ecosystem for some time. A prime example is Ethereum (ETH) liquid staking pools like Lido allowing users to stake and unstake ETH seamlessly leading to massive amounts of capital being staked for lucrative yields.

Tenet’s network allows users to create projects and tokens which will now be integrated with LayerZero technology. The interoperability opens up users to the broader DeFi ecosystem across a variety of smart contract blockchains.

Tenet’s DeFi blockchain operates using its own diversified proof of stake consensus framework, with its native stablecoin backed by a basket of interest-bearing LSDs from various blockchains.

Staking a basket of blockchain-based assets is touted to remove the risk of network attacks by major token holders. Tenet’s genesis stake of its network security was allocated to ETH, ATOM, BNB, MATIC, ADA, and DOT.

Tenet CEO Gregory Goodman told Cointelegraph that LSDs remain a popular DeFi solution that extends the ability to profit from staked assets:

“They allow you to maximize opportunities, by leveraging on the liquidity of staked assets. LSDs will essentially allow PoS native tokens to maximize their earnings potential.”

Goodman also highlighted the importance of LayerZero’s infrastructure in becoming a key component to the future of DeFi.

“The technology they’ve built is a generation ahead of bridging and avoids some of the key exploits we’ve seen bridges succumb to.”

The DeFi ecosystem has seen its fair share of exploits over the last 12 months. Cross-chain bridge attacks saw more than $2 billion stolen from the DeFi ecosystem, with the infamous Axie Infinity Ronin bridge hack accounting for a significant amount of that figure.

Tenet is also set to launch a bridge using LayerZero to make their omnichain LSDs interoperable with the 27 different blockchains supported by the latter’s network.

Over 440,000 Ethereum Added to Liquid Staking Derivatives in Two Weeks

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New Cosmos chain will use liquid staking tokens from other networks for security

May 3, 2023 Coin Telegraph

ANKR

Staked ETH, BNB, ATOM, SOL and MATIC will be usable on Tenet as “restakes” to gain further rewards.

A new Cosmos-based blockchain called “Tenet'' will use liquid staking coins from other networks to secure its transactions, potentially allowing the new network to inherit the security of older ones, according to a May 3 announcement from the developers.

The network is currently available as a testnet and will launch a mainnet version as soon as testing is complete. This comes after liquid staking has recently become the largest decentralized finance (DeFi) protocol category.

Liquid staking protocols such as Lido, Rocket Pool and Ankr allow users to stake their coins with a network of validators and receive rewards without having to run their own nodes. These protocols also provide users with tokens called “liquid staking derivatives,” or LSDs, redeemable for the underlying deposits and rewards.

According to the announcement, Tenet will allow users to “restake” these LSDs to earn additional rewards on its network. And it will provide users with tokens that represent the LSDs themselves. The team calls these third-order tokens “liquid liquid staking derivatives,” or LLSDs. LLSDs will be usable in lending apps and decentralized exchanges throughout the Tenet network, the announcement said.

The team expects there to be two core benefits to using LSDs instead of a native coin to secure the network. First, it “ensures the long-term security of the Tenet chain by leveraging the joint security of each [layer 1] ecosystem it services.” Second, it should “bring additional liquidity and yield opportunities to LSDs.”

At launch, the protocol is expected to allow liquid staking derivatives of Ether (ETH), BNB (BNB), Cosmos (ATOM), Solana (SOL) and Polygon (MATIC) to be restaked on Tenet.

The new network is being developed by former executives of Ankr and Blockdaemon and is advised by members of the Lido, Ankr and OpenAI teams.

Liquid staking protocols have existed since 2020 when Lido was first launched. They grew in popularity in 2022 and early 2023 as the Ethereum network implemented a move to proof-of-stake and began to allow staking withdrawals. On May 1, crypto analytics platform DefiLlama announced that liquid staking had become the top category of DeFi apps when measured by total value locked.

Some experts have argued that liquid staking may grow in the future as a result of the Ethereum Shanghai upgrade.

liquid staking derivatives