The Evolution of Liquid Staking: Insights from Mikhil Pandey of Persistence One

By
Sam kamani
June 9, 2024

Welcome to another episode of the "Web3 with Sam Kamani" podcast, where we dive deep into the world of Web3 with innovators, explorers, and risk-takers. In today's episode, we had the pleasure of interviewing Mikhil Pandey from Persistence One. This episode is a goldmine for founders and investors in the Web3 space. Here’s a recap of the essential insights from our conversation with Mikhil Pandey.

Introduction to Liquid Staking

In late 2020, Mikhil and his team began exploring the concept of liquid staking. At that time, liquid staking was a novel idea with only a few players like Rocketpool making waves. The focus was predominantly on Ethereum, with little attention given to other chains like Cosmos. Persistence One, however, saw the potential in Cosmos and decided to make a big bet on liquid staking for IBC-enabled chains.

The Journey of Persistence One

Persistence One was founded in 2019 during a challenging bear market. Initially, they aimed to bring real-world assets on-chain, but regulatory and adoption hurdles made this difficult. They pivoted to focus on staking and later, liquid staking, recognizing the immense potential in this space.

Persistence One developed their own chain on Cosmos, leveraging its robust technology stack. They launched P Stake, an application for liquid staking, and Dexter, a DEX for trading liquid stake tokens. This strategic shift allowed them to raise capital from prominent investors like Three Arrows Capital, Sequoia Capital India, and Binance Labs.

Understanding Staking and Liquid StakingStaking:

In simple terms, staking involves locking up your assets in a blockchain to help validate transactions. Validators earn rewards for their work, but their assets can be slashed (punished) if they produce incorrect blocks. This process secures the blockchain and ensures that only legitimate transactions are recorded.

Liquid Staking:

Liquid staking takes this a step further by making staked assets more capital efficient. Instead of locking up your assets entirely, liquid staking allows you to receive a representative token (like STK Atom in the case of Cosmos). This token can be used in other financial activities while still earning staking rewards. It provides liquidity, allowing you to trade or use your staked assets as collateral, thereby enhancing capital efficiency.

Expanding Horizons with Bitcoin Liquid Staking

Persistence One is now venturing into new territories with liquid staking for Bitcoin. Unlike Cosmos or Ethereum, Bitcoin is a proof-of-work blockchain and does not inherently support staking. However, by collaborating with Babylon, Persistence One aims to introduce liquid staking for Bitcoin, offering similar benefits of liquidity and capital efficiency.

The Rise of Restaking

Restaking is an advanced concept where staked assets from one blockchain can be used to secure other smaller chains. Eigenlayer is a notable player in this space, allowing Ethereum stakers to secure additional chains and earn more rewards. This concept, originally from Cosmos, is now gaining traction across different blockchain ecosystems.

Challenges and Future Directions

One of the significant challenges for Persistence One has been scaling and achieving traction. Despite building a robust chain and innovative products, gaining user adoption and increasing TVL (Total Value Locked) has been tough. However, Mikhil remains optimistic and focused on their core values of humility, integrity, patience, and persistence.

Conclusion

Persistence One’s journey is a testament to the importance of innovation, adaptability, and persistence in the Web3 space. Their work in liquid staking and upcoming projects in Bitcoin staking highlight the evolving landscape of blockchain technology.

For anyone interested in exploring or participating in Persistence One’s ecosystem, visit their website and try out their products. Engage with the community, and if you have questions, Mikhil is always open to connect on Twitter and Telegram.

Stay tuned for more exciting episodes on "Web3 with Sam Kamani" as we continue to explore the cutting-edge developments in the world of blockchain and Web3.

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