Nomic Introduces Bitcoin Liquid Staking Token in the Cosmos Network Amid Growing Interest

As
the
desire
for
bitcoin
liquid
staking
solutions
intensifies,
Nomic,
the
foundational
blockchain
that
powers
a
non-custodial
bitcoin
bridge,
is
set
to
make
a
significant
move.
The
team
announced
plans
on
Wednesday
to
introduce
a
bitcoin
(BTC)
liquid
staking
token
to
the
Cosmos
ecosystem,
facilitated
by
an
integration
with
the
Bitcoin
network’s
staking
protocol,
Babylon.

What
is
COSMOS?

The

Cosmos
blockchain
is
designed
to
address
key
issues
in
the
blockchain
sector,
such
as
interoperability,
scalability,
and
ease
of
use.
It
utilizes
the
Inter-Blockchain
Communication
(IBC)
protocol,
allowing
different
blockchain
networks
to
exchange
information
and
value
directly.
This
feature
is
useful
for
developers
looking
to
create
decentralized
applications
that
operate
across
various
blockchain
systems.

Cosmos
offers
a
modular
framework
that
simplifies
the
process
of
developing
custom
blockchains
suited
for
specific
applications,
enhancing
performance.
The
well-known
THORChain
ecosystem,
which
has
seen
a
lot
of
popularity
in
this
recent
bull
run,
is
a
project
that
runs
on
the
Cosmos
SDK
(Software
Development
Kit)
and
is
built
for
inter-chain
operability.

What
is
Nomic?

Nomic
is
a
layer-1
blockchain
designed
with
a
focus
on
interoperability
and
flexibility,
aiming
to
serve
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
main
challenges
faced
by
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
developers
and
users
alike.
The
platform’s
commitment
to
interoperability
is
particularly
noteworthy,
as
it
enables
the
transfer
of
value
and
information
across
disparate
blockchain
ecosystems,
thus
broadening
the
potential
for
innovation
within
the
decentralized
space.

One
of
Nomic’s
standout
features
is
its
adaptive
protocol,
which
allows
for
on-chain
governance
and
the
ability
for
the
network
to
evolve
over
time
through
community-driven
upgrades
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
network’s
development
and
governance.

Furthermore,
by
prioritizing
security,
decentralization,
and
user
experience,
Nomic
is
poised
to
support
a
wide
range
of
applications,
from
decentralized
finance
(DeFi)
and
non-fungible
tokens
(NFTs)
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
significant
player
in
the
future
of
decentralized
technology.

What
is
Liquid
Staking?

Liquid
staking
is
an
innovative
mechanism
within
the

cryptocurrency
space
that
allows
users
to
stake
their
digital
assets
in
a
proof-of-stake
(PoS)
blockchain
network
while
retaining
liquidity
of
their
staked
capital.
In
traditional
staking,
users
lock
up
their
cryptocurrency
tokens
to
support
network
operations
such
as
transaction
validation
and
block
production,
in
return
for
staking
rewards.

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

The
process
works
by
users
sending
their
tokens
to
a
smart
contract
associated
with
a
liquid
staking
provider.
In
return,
they
receive
an
equivalent
amount
of
liquid
tokens,
often
referred
to
as
staking
derivatives,
which
can
be
traded,
used
as
collateral
for
loans,
or
utilized
in
other
DeFi
protocols.
These
liquid
tokens
are
pegged
to
the
value
of
the
underlying
staked
assets
and
accrue
staking
rewards
over
time,
reflecting
the
earnings
from
the
staking
process.

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

Liquid
staking
not
only
enhances
liquidity
in
the
cryptocurrency
market
but
also
democratizes
access
to
staking
rewards
by
lowering
the
barriers
to
entry.
Users
with
smaller
amounts
of
capital
can
participate
in
staking
activities
that
they
might
otherwise
be
excluded
from
due
to
minimum
staking
requirements
or
the
illiquid
nature
of
traditional
staking.
Furthermore,
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
the
management
of
synthetic
assets
and
regulatory
considerations,
underscoring
the
importance
of
understanding
the
mechanisms
and
risks
involved
in
this
innovative
approach
to
staking
in
the
blockchain
ecosystem.

Liquid
Staking
on
COSMOS

The
concept
of
liquid
staking
tokens
(LSTs)
has
seen
a
notable
rise
in
popularity,
with
data
from
DeFiLlama
revealing
that,
as
of
Tuesday,
LSTs
accounted
for
approximately
$54
billion
in
total
value
locked
(TVL),
ranking
them
at
the
forefront
of
DeFi
applications.
This
surge
in
interest
is
largely
driven
by
the
appeal
of
earning
staking
yields
while
engaging
with
DeFi
protocols.

For
those
in
the

Cosmos
network,
this
development
means
they
can
now
stake
their
BTC
via
Nomic’s
bridge,
enjoying
the
benefits
of
yield
earnings
while
maintaining
liquidity
of
their
assets.
This
is
a
departure
from
traditional
BTC
staking
methods,
which
typically
involve
locking
up
assets
for
a
determined
period.

Introducing

$stBTC,
a
Bitcoin
Liquid
Staking
Token
powered
by

@babylon_chain.https://t.co/b7duK3MBVs

—
Nomic
(@nomicbtc)

April
10,
2024

Nomic’s
strategy
introduces
an
innovative
way
for
users
to
leverage
their
staked
BTC
in
DeFi
protocols
within
the
Cosmos
ecosystem,
thanks
to
the
inter-blockchain
communications
(IBC)
technology
protocol
of
Cosmos.
This
technology
enables
seamless
interactions
between
different
blockchains
within
the
ecosystem,
such
as
performing
transfers.

Under
this
new
system,
individuals

staking
their
BTC
on
Nomic
will
receive
rewards
in
both
NOM,
Nomic’s
native
token,
and
nBTC,
an
IBC-compatible
token
that
mirrors
BTC
on
a
1-to-1
basis.
This
setup
not
only
offers
BTC
holders
a
novel
avenue
for
yield
but
also
utilizes
stBTC
and
staked
NOM
to
bolster
the
security
of
Nomic’s
layer
1
blockchain.

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

With
innovations
like
stBTC
emerging,
Bitcoin
DeFi
now
has
the
potential
to
compete
with
the
trading
volumes
and
total
value
locked
of
Ethereum
DeFi.

However,
the
launch
of
stBTC
on
the
mainnet
remains
pending,
with
the
current
phase
limited
to
testing
functionalities
on
Nomic’s
test
network,
according
to
the
team’s
statement.

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