Tenet users will be able to utilize staked ETH, BNB, ATOM, SOL, and MATIC as 'restakes' to earn additional rewards.
As per an announcement by the developers on May 3rd, a blockchain named "Tenet," built on the Cosmos platform, intends to employ liquid staking tokens from diverse networks to ensure the security of its transactions. This approach holds the potential for the new network to inherit the security measures of well-established ones.
At present, the network is accessible in the form of a testnet and is slated to release a mainnet version once the testing phase concludes. This development follows the recent emergence of liquid staking as the leading category within DeFi.
Protocols like Lido, Rocket Pool, and Ankr enable users to participate in liquid staking by entrusting their coins to a network of validators. By doing so, users can earn rewards without the need to personally maintain their own nodes. Additionally, these protocols offer users a unique feature in the form of "liquid staking derivatives" (LSDs), which represent the underlying staked deposits and associated rewards and can be redeemed accordingly.
According to the announcement, Tenet intends to offer users the option to "restake" these liquid staking derivatives (LSDs) for the purpose of earning extra rewards on its network. Additionally, the platform will provide users with tokens that represent the LSDs themselves, known as "liquid liquid staking derivatives" (LLSDs). The announcement stated that LLSDs will be usable in lending applications and decentralized exchanges across the Tenet network.
The team behind Tenet anticipates two key advantages of using LSDs instead of a native coin to secure the network. Firstly, it ensures the long-term security of the Tenet chain by leveraging the collective security of each layer 1 ecosystem it supports. Secondly, it is expected to bring additional liquidity and yield opportunities to LSDs.
Upon its launch, the protocol is projected to enable the restaking of liquid staking derivatives from Ether, BNB, Cosmos, Solana, and Polygon on the Tenet network. The development of this new network is led by former executives from Ankr and Blockdaemon, with advisory support from members of the Lido, Ankr, and OpenAI teams.
Liquid staking protocols have been in existence since 2020, starting with the launch of Lido. However, their popularity surged in 2022 and early 2023, particularly as the Ethereum network transitioned to proof-of-stake and introduced staking withdrawals. On May 1st, DefiLlama, a crypto analytics platform, revealed that liquid staking had emerged as the leading category of DeFi applications in terms of total value locked.
Certain experts have suggested that the Ethereum Shanghai upgrade could further fuel the growth of liquid staking in the future.
