Nomic Introduces Liquid Bitcoin Staking Token on Cosmos Network Amid Growing Interest

As the desire for liquid bitcoin staking solutions intensifies, Nomic, the foundational blockchain powering a non-custodial bitcoin bridge, is poised to take a significant step forward. The team announced plans on Wednesday to introduce a liquid bitcoin (btc) staking token into the Cosmos ecosystem, facilitated by an integration with the bitcoin network's staking protocol, Babylon.

What is the COSMOS?

The Cosmos blockchain is designed to address key issues in the blockchain sector, such as interoperability, scalability, and ease of use. It uses the inter-blockchain communication (IBC) protocol, which allows different blockchain networks to exchange information and value directly. This feature is useful for developers looking to create decentralized applications that operate on multiple blockchain systems.

Cosmos offers a modular framework that simplifies the process of developing custom blockchains suitable for specific applications, improving performance. The well-known THORChain ecosystem, which has been very popular in this recent bull run, is a project that runs on the Cosmos SDK (software development kit) and is designed for cross-chain operation.

What is Nomic?

Nomic is a layer 1 blockchain designed with a focus on interoperability and flexibility, with the goal of serving as a foundational platform for a new generation of decentralized applications (dApps) and financial services. At its core, Nomic seeks to address some of the major challenges facing existing blockchain infrastructures, such as scalability issues, high transaction costs, and limited cross-chain communication capabilities.

By leveraging advanced consensus mechanisms and a unique architecture that facilitates seamless interaction between different blockchain networks, Nomic aims to provide a more scalable, cost-effective, and user-friendly environment for both developers and users. The platform's commitment to interoperability is particularly noteworthy as it enables the transfer of value and information across disparate blockchain ecosystems, thereby expanding the potential for innovation within the decentralized space.

One of Nomic's standout features is its adaptive protocol, which enables on-chain governance and the ability for the network to evolve over time through community-driven updates and proposals. This approach not only ensures that Nomic can adapt to the rapidly changing landscape of blockchain technology and user needs, but also empowers its community by giving them a direct stake in the development and governance of the network.

Additionally, by prioritizing security, decentralization, and user experience, Nomic is prepared to support a wide range of applications, from decentralized finance (DeFi) and non-fungible tokens (nft) to more complex enterprise-level solutions. As the blockchain ecosystem continues to grow and diversify, Nomic's innovative approach to interoperability and flexibility positions it as a potentially important player in the future of decentralized technology.

What is liquid bet?

Liquid staking is an innovative mechanism within the cryptocurrency space that allows users to stake their digital assets on a proof-of-stake (PoS) blockchain network while retaining the liquidity of their staked capital. In traditional staking, users lock their cryptocurrency tokens to support network operations, such as transaction validation and block production, in exchange for staking rewards.

However, once staked, these assets are typically locked up for a fixed period, making them illiquid and unusable for other purposes. Liquid staking addresses this limitation by issuing synthetic assets or derivatives representing the staked tokens, which can then be used in various decentralized finance (DeFi) applications without unstaking the original assets.

The process works when users send their tokens to a smart contract associated with a liquid staking provider. In exchange, they receive an equivalent amount of liquid tokens, often called staking derivatives, which can be traded, used as collateral for loans, or used in other DeFi protocols. These liquid tokens are tied to the value of the underlying assets staked and accumulate staking rewards over time, reflecting profits from the staking process.

This mechanism ensures that users can participate in network security and governance while also interacting with the broader DeFi ecosystem, optimizing their capital efficiency.

Liquid staking not only improves liquidity in the cryptocurrency market, but also democratizes access to staking rewards by lowering barriers to entry. Users with smaller amounts of capital can participate in staking activities from which they would otherwise be excluded due to minimum staking requirements or the illiquid nature of traditional staking. Additionally, by facilitating broader participation in staking, liquid staking contributes to the security and decentralization of PoS networks.

Despite its benefits, liquid staking introduces complexities around synthetic asset management and regulatory considerations, underscoring the importance of understanding the mechanisms and risks involved in this innovative approach to staking in the blockchain ecosystem.

Liquid bet on COSMOS

The concept of liquid staking tokens (LST) has seen a notable rise in popularity, with data from DeFiLlama revealing that, as of Tuesday, LSTs represented approximately $54 billion in total value locked (TVL), placing them at the forefront of DeFi applications. . This increase in interest is largely due to the appeal of earning staking returns while engaging with DeFi protocols.

For those on the Cosmos network, this development means that they can now stake their btc through the Nomic bridge, enjoying the benefits of profits while maintaining the liquidity of their assets. This marks a departure from traditional btc staking methods, which typically involve locking up assets for a set period.

<blockquote class="twitter-tweet” data-width=”550″ data-dnt=”true” wp_automatic_readability=”5.8394160583942″>

Presenting twitter.com/search?q=%24stBTC&src=ctag&ref_src=twsrc%5Etfw”>$stBTCa liquid bitcoin staking token powered by twitter.com/babylon_chain?ref_src=twsrc%5Etfw”>@babylon_chain.https://t.co/b7duK3MBVs

– Nomic (@nomicbtc) twitter.com/nomicbtc/status/1777924584353796199?ref_src=twsrc%5Etfw”>April 10, 2024

Nomic's strategy presents an innovative way for users to leverage their btc staked in DeFi protocols within the Cosmos ecosystem, thanks to the Cosmos inter-blockchain communications (IBC) technology protocol. This technology allows for seamless interactions between different blockchains within the ecosystem, such as making transfers.

Under this new system, people who stake their btc on Nomic will receive rewards in both NOM, Nomic's native token, and nBTC, an IBC-compatible token that mirrors btc 1 to 1. This setup not only offers holders btc a new avenue of yield, but also uses stBTC and NOM staked to strengthen the security of the Nomic layer 1 blockchain.

Matt Bell, CEO of Turbofish and key figure behind Nomic, highlighted the potential impact of such innovations, stating:

With the emergence of innovations like stBTC, bitcoin DeFi now has the potential to compete with ethereum DeFi's trading volumes and total value locked.

However, the launch of stBTC on the mainnet is still pending, and the current phase is limited to testing functionalities on the Nomic testnet, according to the team's statement.

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