Understanding Quicksilver

Published in

QuicksilverZone

3 min readFeb 9, 2022

The Quicksilver protocol will provide liquid staking for the entire Cosmos ecosystem — Let’s take a look at how Quicksilver will improve upon existing liquid staking models to both benefit stakeholders and foster increased decentralization.

Asset Fungibility

As most other liquid staking protocols, Quicksilver will provide qAssets in the place of delegated tokens that will allow stakeholders to increase their returns. It does not require unbonding periods nor a minimum stake. Quicksilver also allows for existing stakeholders to transfer their stake directly onto Quicksilver, without having to go through an unbonding period first.

Autocompounding of Rewards

Rewards earned by native tokens delegated via the Quicksilver protocol will be automatically collected and compounded on a epochly basis. The collection of these rewards is added to the ‘delegated supply’, and increases the redemption rate of the representative qAsset. The redemption rate is what is used to determine how many qAssets you receive when bonding Assets, and vice versa on exiting the protocol.

Socialization of Risk

Slashing risk, or the risk of a validator being penalized for its behavior, is socialized across validators so that, if a slashing event were to occur, the impact would be minimal. For example, in the event of a 5% slash on a validator with 1% of the pool, the redemption rate shifts -0.05%. If this were a downtime slashing, the rate would shift by -.0001%, which is virtually insignificant. In the event of a malignant validator, stakeholders would have the power to ban it through Quicksilver protocol governance.

Protocol Governance

Quicksilver stakeholders — holders of bonded QCK tokens — play a critical role in governing the Quicksilver protocol. They are able vote to onboard new zones, distribute airdrops and incentives, blacklist validators, tweak tokenomic parameters, and more, thereby acting as a DAO that controls the running of the protocol.

Governance by Proxy

When delegating tokens via Quicksilver, Quicksilver maintains stakeholders’ governance rights as if they were staking natively. This occurs through a proxy mechanism in which zone votes are reflected on Quicksilver. The protocol mirrors governance proposals of the native chain on Quicksilver, qAsset holders can then vote on these mirrored proposals and their vote will be reflected on the native chain.

Permissionless and Unrestricted Validator Sets

Most liquid staking models have a whitelisted set of validators, making any given chain less secure and more centralized. Via Quicksilver, there is no predetermined list of validators. All the validators of a given zone can be delegated to unless they have been excluded by Quicksilver governance. Furthermore, stakeholders are rewarded with Quicksilver (QCK) tokens for delegating to performant and decentralized validators.

Airdrop Module

Over 50% of the QCK token genesis supply will be allocated to airdrops, which will occur every time governance onboards a new chain. Governance will also decide the amounts allocated to each onboarding event.

Scalability

Most liquid staking modules are designed to service a single blockchain, and to onboard new ones, they must go through a tedious process. Through interchain accounts and the liquid staking model, we are able to seamlessly onboard any zone that has been built on Cosmos SDK, putting our scalability completely in the hands of our community.