blockworks.co
Vishal Talasani, the co-founder of Stride Protocol, has proposed a merge between its liquid staking zone and the Cosmos Hub, the blockchain that connects thousands of other networks in the Cosmos ecosystem, by converting Stride’s STRD governance token to Cosmos’ ATOM.
The merger is still in its infancy, and there are yet to be any concrete details on execution, Talasani noted in a talk at Cosmoverse, Istanbul.
Drawing on the concerns of Lido’s control over staked ether on Ethereum, Talasani notes in a press release reviewed by Blockworks that by merging with the Hub and having ATOM, the Cosmos Hub’s native token, become its governance token the project could remove any centralization fears.
“Although Stride has a long way to go before reaching Lido’s scale, we don’t want to ever put a chain in a place where it feels like Stride is a centralization vector,” he said. “So we think it makes sense for ATOM to control Stride.”
Stride currently has a staked total value locked (TVL) of $36.94 million, according to information available on DeFiLama, with staked ATOM making up almost 80% of these tokens. It is currently the largest liquid staking protocol in the Cosmos ecosystem.
In a separate draft proposal reviewed by Blockworks, Stride Labs co-founder, Aidan Salzmann, suggested that the Cosmos Hub will provision the ATOM for the conversion and ensure that all STRD is converted to ATOM.
Following this switch, in the current draft of the proposal ATOM will be the only governance token for Stride protocol, and all Stride rewards —- $700,000 annualized — will be reallocated to ATOM stakers, according to Talasani.
“From Stride’s perspective, this would be a good idea because it would greatly increase the decentralization of Stride protocol, which should in turn increase confidence and lead to more liquid staking,” Salzmann wrote in a proposal.
Cosmos Hubs will also benefit from the merge, Salzmann noted in that the Stride team can be an independent development team part of the Cosmos Hub, making it more decentralized and removing any anxieties around misaligned governance.
Avril Dutheil, founder of Neutron, a smart contract protocol within the Cosmos ecosystem, told Blockworks in an interview that the renewed interest in the Cosmos Hub is a good sign, but remains skeptical.
“It potentially makes sense for some of these projects, but in general, my concerns with these ideas — the mergers — is how do we, as a community, guarantee that the teams working on these projects do become extensions of the Hub,” he said.
He added that teams should continue being motivated to improve and iterate on these projects “so that they actually deliver value to them, from engaging, rather than just using this as an exit.”