After completing ecosystem onboarding through our friends at Informal Systems, we can now announce with profound excitement that we are integrating with Cosmos Hub to bring the power of bitcoin liquid staking to the Cosmos ecosystem and beyond.

Here’s everything you need to know.

Our Upcoming Testnet

Our forthcoming appchain testnet and bitcoin liquid staking pool is set for release in early April 2024 and will be secured by ATOM through Cosmos Hub. The appchain is an Ethereum Virtual Machine (EVM)-compatible Cosmos chain complete with an ATOM staking mechanism and Cosmos validator set that will be leveraged for testing.

Following the launch of testnet, our liquid staking token (LST), stBTC, will be implemented for testing and undergo auditing.

Additional Key Info:

• We plan to launch mainnet in late April 2024.
• We recently announced our integration with BabylonChain. Once that integration is fully ready and goes live, we will adopt Babylon BTC shared security in our Cosmos appchain.

How Cosmos Hub Protects Our Appchain

Cosmos Hub is a crucial component of the Cosmos ecosystem, providing a central point of connection and communication between different blockchains, or “appchains,” within the network. Cosmos Hub can help protect our appchain, which is an EVM, in several ways:

Interchain Security

The Cosmos Hub can enhance our appchain’s security through its Interchain Security feature, a distinct capability within the Cosmos ecosystem. This feature allows a parent chain, like the Cosmos Hub, to secure child chains like ours. It is facilitated by enabling the validators of the parent chain to also validate and secure transactions on the child chains. Through Interchain Security, our appchain can achieve a high level of security without the need to attract its own validators, since compromising our security would also require breaching the Cosmos Hub’s security.

IBC Protocol

The Inter-Blockchain Communication Protocol (IBC) is a crucial aspect of the Cosmos ecosystem, enabling secure communication and asset transfer between different blockchains, thus mitigating the risk of isolated attacks on our chain.

Governance and Upgrades

The Cosmos Hub’s decentralized governance system allows stakeholders to propose and vote on network upgrades and changes. Participation in the Cosmos ecosystem allows our appchain to leverage this governance model, ensuring timely implementation of security upgrades and patches across the network.

Ecosystem Support

Being a part of the Cosmos ecosystem grants access to an extensive array of tools, services, and community support. This includes access to security best practices, auditing services, and a network of experienced developers and validators dedicated to enhancing our appchain’s security.

Adopting BTC Shared Security With Cosmos

Once the Babylon mainnet goes live, enabling BTC shared security with Cosmos and facilitating liquid staking to Babylon for our stakers could be pursued through several approaches. Notable elements of this transition include:

Integration with Cosmos

It’s crucial to ensure that our Cosmos EVM chain is fully compatible with the Babylon protocol. This will entail incorporating the required modules or smart contracts to establish communication with the Babylon chain and comply with its staking and security protocols.

Security Guarantees

We must uphold the security assurances provided by the Babylon protocol on our chain. This encompasses implementing mechanisms for slashing in cases of security breaches and establishing protocols for rapid unbonding to preserve liquidity for our stakers.

Coordination with Babylon Control Plane

Effective collaboration with the Babylon chain’s control plane is essential to align security information, staking data, and other pertinent details between our chain and Babylon’s. This coordination is vital to ensure the seamless implementation and ongoing maintenance of the shared security model.

Incentive Alignment

Aligning incentives for our chain’s stakers and validators is key to their participation in the BTC shared security model. Adjusting reward structures, fees, and other economic factors is necessary to motivate engagement within the Babylon ecosystem.

Community and Governance Engagement

Active involvement with our community and leveraging governance mechanisms are critical to garner support for integrating with Babylon and adopting BTC shared security. Proposals, voting, and other governance actions will be required to officially sanction this integration.

stBTC And Our Appchain

Lorenzo Protocol is a decentralized finance (DeFi) platform offering liquid staking solutions for bitcoin.

LLR enables users to stake their bitcoin without having to lock them up in bitcoin staking services (e.g., Babylon) or manage their own staking infrastructure, while simultaneously providing liquidity for the staked bitcoin.

Here’s how liquid staking bitcoin with LLR operates:

Staking

Users deposit their bitcoin (BTC) into the LLR smart contract to engage in liquid staking. LLR aggregates these deposits and stakes them on a proof-of-stake (PoS) chain specified by the user, utilizing a network of validator nodes run by professional operators.

Issuance of stBTC

In exchange for staking their BTC, users receive stBTC tokens, representing their staked bitcoin plus any accrued staking rewards. The value of stBTC aims to mirror that of BTC and fluctuate as staking rewards evolve.

Liquidity

Differing from conventional staking where assets are immobilized until unstaked, stBTC can be freely traded, utilized within DeFi protocols, or served as collateral on lending platforms, offering liquidity to users who have staked their BTC.

Rewards and Slashing

The value of stBTC reflects the staking rewards and any potential slashing penalties due to validator misbehavior. If validators perform successfully and secure rewards, the value of stBTC rises. However, if validators are penalized for misconduct, the value of stBTC could diminish.

Decentralized Governance

LLR operates under the governance of a decentralized autonomous organization (DAO), where token holders have the power to vote on key platform decisions, including development directions, validator selection, fee structures, and other significant matters.

Pioneering Secure Blockchain Networks Together

At Lorenzo Protocol, we’re driving innovation in blockchain interoperability and security. Our ATOM-secured appchain and the introduction of bitcoin liquid staking mark significant strides towards a unified, secure ecosystem.

Together with Cosmos Hub, we are not only improving our platform but also contributing to a more interconnected and resilient blockchain future. Our efforts set new precedents for DeFi and blockchain interoperability, illustrating our commitment to a seamless, secure blockchain environment.

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