In 2022, Stride protocol launched as the first Cosmos-wide liquid staking provider. At launch, protocol users could liquid stake their ATOM for stATOM, and use stATOM to redeem the underlying ATOM. The user-experience (UX) was built to be intuitive and simple, abstracting away the complexity of bridging tokens between Cosmos blockchains. Since then, Stride protocol has on-boarded several more blockchains for liquid staking. Stride protocol’s stToken liquidity pools on Osmosis have quickly become some of the biggest liquidity pools in Cosmos. And now, stTokens are beginning to be integrated into sophisticated DeFi applications across the Cosmos.
With a TVL of USD $7.2m, total wallets created at 56,406, and a presence in the Cosmos media ecosystem, Stride protocol is currently the biggest Cosmos-wide liquid staking provider.
Looking forward to 2023, we believe the Stride core contributors will be hyper-focused on making Stride protocol’s liquid staking even more secure and easier to use. We expect that contributors will also be working on new features, like liquid governance. The following list of potential features is organized around several key themes.
The importance of security cannot be overstated. Given that tokens deposited with Stride protocol are used for economic security and governance on their respective chains, the protocol must responsibly and securely handle these tokens. What’s more, Stride protocol’s stTokens are being increasingly integrated into DeFi applications across the Cosmos, making the Stride blockchain a key security dependency. For these reasons, security is the number one priority of core contributors. Currently, the Stride code-base has been fully audited by three separate firms; Stride protocol’s internal logic uses rate-limiting; and the Stride blockchain has a minimalist design philosophy, just like the Cosmos Hub.
How core contributors plan to enhance security even further:
Interchain Security V1
ICS V1 / replicated security from the Cosmos Hub will be available in early 2023, and Stride will be one of the first consumer chains! This means that the Stride blockchain will be protected by the Cosmos Hub’s $1.7 billion of economic security.
IBC Native Rate Limiting
There will be reasonable limits placed on the amount of tokens that can be IBC’d from the Stride blockchain on a single day. In the unlikely scenario that an attacker exploits the blockchain, IBC rate-limiting would mitigate the damage. For context, the Osmosis and Axelar blockchains currently use IBC rate-limiting, and it will likely soon become a standard security feature across the Cosmos.
In addition to the three audits that have already been performed on the Stride protocol code-base, throughout 2023 it will be continuously audited. Continual auditing would include checking all newly written code before it’s uploaded to the blockchain. Osmosis and Axelar already receive this service, and soon Stride will too.
In Q1, Stride protocol will officially be protected by a 500,000 STRD bug bounty. This bounty will serve as another line of defense around the protocol.
All tokens currently supported by Stride protocol are used to govern their respective blockchains. Currently, when a user deposits a token, the protocol stakes it with a validator on the token’s proper chain, and that validator gets to exercise the token’s voting power. But it would be better if the user could retain the voting power of his token. That’s why core contributors are working on liquid governance, which will allow holders of stTokens to exercise the voting power of the underlying tokens.
Liquid governance will be developed in an iterative manner, according to this plan:
Planetary Governance (Stride blockchain)
For example, in the case of an on-chain governance vote on the Cosmos Hub blockchain, holders of stATOM on the Stride blockchain would be able to signal their voting intent. This would require their stATOM to be locked on Stride before the beginning of the vote, and remain locked for the duration of the unbonding period. Stride mirrors these requirements from the Cosmos Hub’s governance module. Stride protocol would then vote on their behalf, which would supersede the vote of whichever validator(s) the tokens were delegated to.
Orbital Governance (Osmosis Liquidity Pools)
For example, in the case of an on-chain governance vote on the Cosmos Hub blockchain, stATOM liquidity providers on Osmosis would be able to signal their vote. This would require the Osmosis LP tokens with underlying stATOM to be in a bonded state during the duration of the voting period. Interchain queries would be used to record how much stATOM a user has, and that user would be able to signal their vote. Since ICQs are used, it wouldn’t be necessary to upload any code to the Osmosis blockchain.
Cosmic Governance (Cosmos-Wide)
The goal of V3 is to allow stTokens in any Cosmos DeFi application to exercise the voting power of its underlying token. Liquid Governance V3 requires more research and core contributors are committed to working toward a solution. Specifically, for V3 to work stTokens would need to be lockable. This may require uploading special Stride protocol smart contracts to participating chains, or upstreaming custom logic into the SDK which would enable the locking of stTokens.
One of the major hindrances to the adoption of any Web3 project is complexity. Creating a simple, intuitive user experience has always been a major focus of the Stride core contributors, as it increases protocol usage.
Here are the UX improvements that we believe core contributors are working on:
Several small improvements will be made to the Stride web app / frontend, making it easier for first-time users to liquid stake. For example, for ease of use, all tokens supported by Stride will be displayed on the left hand side of the web app, instead of using the current drop-down bar.
Currently, Stride liquid staking requires two transactions: an IBC transaction and a transaction on the Stride blockchain. This is not intuitive for non-Cosmos users. Very soon, users will sign one transaction to liquid stake, completely abstracting the IBC bridge step and making the experience feel like monolithic chains, such as Ethereum using skip transactions.
The Liquid Staking Module
The liquid staking module (LSM) is a revolutionary new Cosmos SDK module being developed by Iqlusion. Once completed and installed to chains, it will allow staked tokens to be directly liquid staked with Stride protocol without the intermediate step of unstaking. We expect that Stride core contributors are keeping a very close eye on the development and proliferation of LSM, and will enable support for it immediately once it has been installed on chains supported by Stride protocol.
The whole point of Web3 is transparency. Everything about Stride protocol happens on its decentralized, transparent blockchain. But for most users, it’s impossible to read the blockchain. That’s why we expect that Stride core contributors will be making an effort to make Stride data more accessible, through various dashboards:
The Cosmos Cockpit
To keep track of the many stToken integrations, a dashboard will be built to inform users of stToken use-cases across the Cosmos and help them manage their positions. It will be similar to ApeBoard or Pulsar. It will include links to every stToken integration, and it will display the user’s position.
A general Stride protocol dashboard will be released, with such figures as TVL, redemption rate, market rate, current unbondings, and so on. Data will be provided for each token supported by Stride protocol.
Stride Incentives Calendar
Currently, the Stride Briefing contains a link to a Google Sheet with an incentive calendar that displays forward guidance about STRD incentives. Very soon, this feature will be folded into the Stride web app.
Stride is the first interchain liquid staking protocol. It is the first user of Interchain Accounts and Interchain Queries. Core IBC tech is advanced. Stride leverages it and builds upon it to bring new utility to Cosmonauts.
Bonded Liquidity Market (“Instant Redemptions”)
Stride processes deposits and withdrawals daily. Currently, withdrawals take 3 weeks. However, withdrawals could be matched with deposits to be processed instantly. For example, if Alice deposits 1 ATOM and Bob withdraws 1 stATOM, Bob could receive Alice’s ATOM in exchange for his stATOM (before it’s been staked). This would increase the peg health and result in a better Stride UX.
The Stride protocol is naturally long the tokens of the zones it supports (if those zones succeed, Stride succeeds). Therefore, the Stride treasury can arb stTOKEN pools, increasing the size of its arb treasury (denominated in TOKEN). Because the treasury is long TOKEN and doesn’t denominate in USDC, its holdings are up only, which leads to a positive feedback loop (treasury size increases, peg gets tighter, and so on).
Stride validators are selected through Stride’s rigorous validator selection process. Some large holders may want to delegate to subsets of validators (bare-metal, globally distributed, etc.). They could express these preferences by minting a separate LST, such as baremetalstATOM.
Validator Data Hub (“InterchainWiki”)
Core contributors are thinking hard about how to contribute to solving the problem of validator concentration of economic and voting power. They are setting out to provide a public repository of granular data that reflects the value validators bring to the networks in which they participate, so that Cosmos can more efficiently distribute delegations across community validators.
Relayer Fee Market Middleware
Core contributors are thinking about how to incentivize relayers to process expensive interchain accounts transactions with IBC middleware.
stTokens on Ethereuem (via Axelar)
By bridging stATOM and other LSTs to Ethereum (as well as other ecosystems like NEAR), Ethereum users can gain exposure to staked ATOM (and other Cosmos tokens) and easily custody stTokens as ERC20s using existing EVM custody arrangements.
stTokens on NEAR/Polkadot (via Composable Finance)
Using Composable Finance’s Composable Centauri, Stride is working to bridge stATOM and other Cosmos stTokens to NEAR and Polkadot. This way, staked Cosmos tokens can be used in DeFi in two new ecosystems.
Staking tokens of non-Cosmos PoS Chains (using GMPs)
Core contributors are looking at ways to issue liquid staking tokens for tokens outside of Cosmos. Several teams are working to connect these ecosystems via IBC (Composable Finance, Polymer, Axelar etc.). As a first step, core contributors are working with them to bring stTokens to NEAR and Polkadot.
We believe the above features will be development priorities for the Stride core contributors in 2023, most likely to be completed in the first half of the year. This list is not exhaustive, nor is it a guarantee of anything. Things on the list may not end up being built, and things not on the list might be built.
As a reminder, Stride is a decentralized and fully open-source protocol governed by a decentralized autonomous organization. These potential features were sourced from the community, discussed on Commonwealth, then proposed to protocol governance by a community member and voted on by Stride tokenholders.
After the vote passed, this roadmap was written to share the proposed features more broadly. The proposed features are not intended to constrain Stride contributors by requiring that they focus only on these roadmap items or by requiring that all of these features be launched in 2023. This list is meant only to help guide Stride contributors to focus on features that STRD tokenholders wish to see implemented.