Stride Blockchain to Adopt ATOM-Powered Security Model
Stride Blockchain to Adopt ATOM-Powered Security Model
The Transition of Stride: Boosting Economic Security in the Blockchain Industry
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The blockchain industry continues to evolve, pushing boundaries and exploring new avenues for innovation. One such development is the upcoming transition of Stride, a Cosmos-based liquid staking protocol, to Cosmos’ interchain security (ICS) system. This transition, scheduled to occur on Wednesday between 17:00 UTC and 21:30 UTC at block height 4616678, brings about significant changes and improvements to the economic security of Stride.
Stride, with over $35 million in total value locked, currently relies on the STRD token model for economic security. However, this model only provides $19 million in economic security through bonded network tokens. With the transition to ICS, the economic security of Stride will witness a staggering 11,935.2% increase, reaching approximately $2.3 billion. This boost in economic security is set to make the liquid staking protocol more resilient to potential hacks and attacks.
But what exactly is the Cosmos’ interchain security system? To understand this, we need to delve into the workings of Cosmos Hub, a blockchain intermediary that connects all independent blockchains within the Cosmos network. Cosmos Hub employs a proof-of-stake consensus mechanism powered by ATOM tokens. With interchain security, consumer chains like Stride can leverage ATOM-backed validators, allowing them to share the robust security provided by Cosmos Hub using ATOMs instead of their native tokens.
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Post-transition, Stride’s security will be fortified by staked ATOM instead of STRD tokens, with Cosmos’ validator set taking over block production from the existing Stride validator set. This transformation essentially positions Stride as a consumer chain, enabling Hub’s validator to participate in its consensus. Notably, STRD tokens will continue to play a valuable role by generating staking rewards. As of now, STRD holds a market capitalization of $86.7 million, while ATOM boasts a market value of $2.73 billion.
In addition to bolstering economic security, the transition to ICS will also impact Stride’s tokenomics. Stakers have decided to reduce the distribution of STRD as staking rewards by 50%, ensuring a more controlled and sustainable issuance. Furthermore, 15% of the STRD staking rewards will be shared with Cosmos Hub, strengthening the collaboration and mutual benefits between the two entities.
According to the original tokenomics, Stride’s hard cap for STRD tokens is set at 100 million. Under the new plan, the emission of STRD as staking rewards will be halved. In the first year, this reduction translates to 1,304,100 STRD annualized emissions. To implement this change, a preparatory chain upgrade will be carried out before the transition to ICS takes place.
The transition of Stride marks a significant milestone in the blockchain industry. It not only enhances economic security but also showcases the power of interchain collaboration. By utilizing Cosmos’ interchain security system, Stride strengthens its position as a reliable and secure liquid staking protocol. With the transition just around the corner, the blockchain industry eagerly anticipates the positive impact it will bring.
Edited by Parikshit Mishra.
