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Co-Founder Vish Modali Makes the Case for Quicksilver at ZKV’s Privacy in Cosmos

Up until recently, growth in Cosmos had been barred by high staking APRs and competing staking and defi verticals, Co-Founder Vish Modali explained, as he opened the floor at the ZKV Privacy in Cosmos conference. “The cosmos ecosystem has adopted a path of high staking APRs to bootstrap economic security. Now, if you look at this from the perspective of an application specific DeFi chain, they first have to give out a high staking APR to get economic security on the chain. They also have to dish out a lot of incentives for the product to actually be competitive with traditional staking, and this is not sustainable for a long run. The risk here is that there’s always going to be these powerhouse projects that come out with high staking APRs, and staked assets, instead of being free, continue to remain locked and keep migrating from chain to chain, choosing high staking APRs, starving any potential DeFi ecosystem of the collateral or the liquidity it would need to grow and flourish.”

Cosmos: The Perfect Ground for Liquid Staking

Cosmos, he went on to explain, is a great architectural ground for liquid staking. “I think that comes down to two core technological innovations in Cosmos. The first is the liquidity staking module, built by Zaki Manian and the Iqlusion team, and the second are interchain accounts.” He explained that, through the liquidity staking module, the user flow of liquid staking is completely altered. “Traditionally, if stakers were onboarded into liquid staking, they had to unstake their assets, wait out the unbonding period, and then deposit their assets into a liquid staking protocol,” causing users to miss out on rewards while reducing chain security during this period of unbonding — The liquidity staking module changes that, he emphasized. “The second piece of tech that is quite critical are interchain accounts. They allow users to stake natively and operate through the Quicksilver chain, making Quicksilver largely chain agnostic. This allows us to provide liquid staking for all Cosmos chains that are ICA enabled.”

Quicksilver: Creating a Net Positive Effect in the Cosmos

Quicksilver, however, will be going beyond leveraging IBC technology to enhance liquid staking on the Cosmos. “We have made a very conscious design choice to use unrestricted validator sets to avoid giving a few whitelist validators a disproportionate amount of stake, enhancing decentralization through liquid staking.” Another way the protocol enhances decentralization is performance, a concept coined by the Quicksilver team. “Participation rewards directly incentivize users to delegate to smaller and performant validators in order to balance out some of the validator inequities that exist in the cosmos ecosystem.” A viable solution to the early bird validator problem, incentivizing users to delegate to smaller validators would theoretically help distribute staked assets.

Another key feature Quicksilver will have is the maintenance of governance rights. Vish explained that, “Governance rights are core to what makes the Cosmos, and if liquid staking, as it currently stands, and all DeFi take off in a big way, these governance rights would be lost for the users.” Quicksilver will address this through its governance by proxy module, which will allow users to vote on proposals through Quicksilver, and in turn, Quicksilver will mirror user votes on native chains. You can learn more about this feature here. Highlighting the importance of this feature, Vish stated, “I personally don’t think Quicksilver can become a liquid staking hub without having strong solutions for governance, and by extension, becoming a governance hub for the Cosmos ecosystem.”

This is just the beginning, he mused, talking to Quicksilver’s potential as a DeFi hub. “Unlocking this capital is just a first step for Quicksilver. If $40 billion worth of assets enter the Cosmos ecosystem, many possibilities would be opened up.” Users could build DeFi protocols on top of the Quicksilver chain, taking advantage of these assets to supercharge a DeFi ecosystem.

The vision of Quicksilver is to allow governance participation, staking, and participation in DeFi to coexist synergistically, accelerating growth, enhancing security, and increasing decentralization in the Cosmos. Vish’s concluding remark consisted of one phrase: #Wagmi.




Interchain Liquid Staking for the Cosmos ecosystem and beyond.

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