Stride Contemplates Merger with Cosmos Hub Aiming for Enhanced Decentralization in Liquid Staking
Stride Protocol’s co-founder, Vishal Talasani, has proposed merging its liquid staking zone with the Cosmos Hub, converting Stride’s STRD governance token to Cosmos’ ATOM.
- Stride Protocol’s co-founder, Vishal Talasani, has introduced a preliminary proposal to merge Stride with Cosmos Hub, aiming to transition its STRD governance token to Cosmos’ ATOM.
- The proposal is in its initial stage, with execution details yet to be outlined.
- By integrating with Cosmos Hub and adopting ATOM as its governance token, Stride hopes to dispel worries related to centralization.
- Stride holds a staked total value locked (TVL) of approximately $36.94 million and is the largest liquid staking protocol within the Cosmos ecosystem.
Stride Protocol, currently a notable player in the Cosmos ecosystem with a staked TVL of $36.94 million and nearly 80% of tokens staked being ATOM, is contemplating a strategic merger with the Cosmos Hub. This merger proposes converting Stride’s STRD governance token to Cosmos’ native token, ATOM, as highlighted by Vishal Talasani, Stride’s co-founder, at Cosmoverse in Istanbul. The merger’s proposal remains embryonic, with comprehensive details and execution strategies still under development.
— Cosmoverse | İstanbul Oct 2-4 🇹🇷 (@CosmoverseHQ) October 4, 2023
The motivation behind this potential merger seems rooted in a pursuit to alleviate centralization concerns. Notably, by having the Cosmos Hub’s native token, ATOM, as its governance token, the Stride Protocol aims to preclude itself from becoming a centralization vector, thereby enhancing user confidence and leading to an upsurge in liquid staking. The draft proposal from Stride Labs co-founder Aidan Salzmann suggests that the Cosmos Hub would supply the ATOM for the conversion, ensuring a comprehensive conversion of STRD to ATOM. Subsequent to this conversion, ATOM would become the exclusive governance token for Stride protocol, with all Stride rewards, amounting to $700,000 annualized, being allocated to ATOM stakers.
Implications and Future Developments
Salzmann envisages that this move would considerably amplify the decentralization of Stride Protocol. Moreover, it could escalate confidence and subsequently lead to an influx in liquid staking. The Cosmos Hub also stands to gain from this potential amalgamation, acquiring an independent development team from Stride, which could further decentralize it and assuage any apprehensions regarding governance misalignment.
However, this proposal has invoked skepticism alongside its interest. Avril Dutheil, founder of Neutron (a smart contract protocol within the Cosmos ecosystem), voiced concerns about ensuring that teams working on projects like these remain incentivized to enhance and iterate on these projects after a merger. The crucial aspect to be guaranteed, according to Dutheil, is that teams persist in delivering value and remain engaged rather than perceiving this as an avenue for an exit.
While the merger proposes potential benefits like enhanced decentralization and robust governance, the concrete strategies for its realization and the measures to ensure sustained project development and value delivery post-merger remain to be seen. The crypto community will likely be watching closely for further details and developments pertaining to this proposal, shedding more light on the impacts and functioning of such a merger in the decentralized finance space.