A new Cosmos-based blockchain called “Tenet” will use liquid collateralized coins from other networks to secure its transactions, potentially allowing the new network to inherit the security of the old, according to a May 3 announcement from the developer. .
The network is currently available as a testnet and will launch the mainnet version as soon as testing is complete. This comes after liquid staking recently became the largest category of decentralized finance (DeFi) protocols. Liquid staking protocols like Lido, Rocket Pool, and Ankr allow users to stake their tokens and earn rewards through a network of validators without running their own nodes. The protocols also offer users tokens called “liquid collateralized derivatives,” or LSDs, that are redeemable for underlying deposits and rewards.
According to the announcement, Tenet will allow users to "re-stake" these LSDs to earn additional rewards on its network. It will provide users with tokens representing LSD itself. The team refers to these third-order tokens as “Liquid Collateralized Derivatives, ” or LLSDs. The announcement states that LLSD will be available for lending applications and decentralized exchanges across the Tenet network. The team envisions two core benefits of using LSD instead of the native token 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 serves." Second, it should "bring additional liquidity and yield opportunities to LSD." At launch, the protocol is expected to allow for liquidity-collateral ized derivatives of Ether, Binance Coin,the universe, Solana and polygon restaking on Tenet.
The new network was developed by former Ankr and Blockdaemon executives, with advice from Lido, Ankr and members of the OpenAI team. The Liquid staking protocol has existed since Lido first launched in 2020. They will gain popularity in 2022 and early 202 3 as the Ethereum network implements proof-of-stake and begins allowing withdrawals. On May 1, crypto analytics platform DefiLlama announced that liquid staking has become the top category of DeFi applications measured by total value locked. Some experts believe that liquidity staking m ay grow in the future due to the Ethereum Shanghai upgrade.
