This newsletter is supported by Chorus One, an operator of validating nodes and staking services on Proof-of-Stake networks.

Game of Zones and Cross-Chain Privacy

The first phase of Cosmos’ “Game of Zones” competition that is testing the interoperability protocol IBC is live. The three stages of the event will trial liveness, throughput and security of the IBC protocol and relayer implementations with a price pool of 100,000 ATOM to be given out to the over 100 participating entities. There are a variety of awesome visualizers and dashboards to explore the state of the internet of blockchains here.

Screenshot from the Map of Zones explorer by Ztake and Bitquasar. The spectrum from red to green shows whether zones mainly sent or received transactions. Sizes signify total transactions (during the first phase the goal is to maintain a connection to the Hub while sending as little transactions as possible).

Meanwhile, two other exciting announcements related to IBC took place during the past two weeks. The ZCash Foundation published the design and announced the intention to launch an IBC-enabled pegzone to bring privacy to the Cosmos ecosystem through ZCash’s shielded transactions. The first phase of the project sees the pegzone bridging ZEC tokens to Cosmos blockchains and the second phase aims to bring shielded cross-chain transfers to the ecosystem.

Furthermore, the Chorus One team published details about their design for the first phase of a bridge project that seeks to allow Substrate (Polkadot) and Cosmos blockchains to interoperate. The first part of this project, a Substrate client for the Cosmos SDK, is funded through a Web3 Foundation grant.

Eth2.0 Consensys Staking Study and Testnet Progress

Consensys released a 39 page Ethereum 2.0 Staking Ecosystem report. The Eth 2.0 timeline currently calls for the Beacon Chain to launch in Q3 2020. A minimum of 16,384 validators staking and 524,388 ETH must be reached to launch.

The report finds that of the respondents, 32.8% plan to run their own validator and 33.1% plan to use a third party staking provider. Expected returns range between 5%-9% and a fair third party fee between 4-10%.

Those that plan to use a third party staking provider, “exhibit the relatively highest ratio of storage of ETH on an exchange.” Combined with Coinbase and Binance being the top 2 recognized third party staking providers in the survey, it seems that exchanges already have a lead when it comes to Eth 2.0 staking market share.

Separately, Eth 2 testing continues, with continued successful deployments being reported on Raspberry Pi’s (not recommended for mainnet deployment...yet?) and the Topaz testnet supporting over 26K active validators.

Network Updates

  • Free TON: A collective of validators and developers launched a community fork of the TON protocol to bring the technology to the world after Telegram was forbidden to launch the network. The Free TON network has no investors and plans to distribute all tokens to users, developers, and validators. Find out more on Coindesk and on the official website.
  • Keep Network: Keep launched their network and staking is live with tBTC expected to come to the Ethereum mainnet on May 11 supported by over 40 industry partners.
  • NEAR: NEAR raised another $21.6m in a round led by A16Z and launched the first phase of what is going to be their mainnet operating under PoA consensus with NEAR Foundation nodes. Check it out on the NEAR block explorer.
  • Polkadot: Stages of Polkadot’s upcoming launch, as presented by Dr. Gavin Wood during a Ready Layer One session without giving an itinerary in terms of timeline.
    Phase 1: PoA candidate chain limited to basic operations operated by the Web3 Foundation. DOT tokens can be claimed and staking intention signaled.
    Phase 2: Switch from PoA to PoS initiated by the Web3 Foundation.
    Phase 3: Final upgrade to activate the governance protocol and to remove the sudo module (making the network completely permissionless).

Liquid Staking Research
As staking is becoming increasingly mainstream, big questions surrounding the role of custodial exchanges and the potential of staking derivatives need to be addressed. The Chorus One team received a grant by the Interchain Foundation to research designs and implications of on-chain tokenization of staking assets in depth. We published the first draft of this research last week and welcome feedback and comments on this Google Doc. Felix also presented the results from the draft on the last Liquid Staking Working Group call. After a few weeks of incorporating feedback, the report will be officially published by the end of the month.

Virtual Conferences
Two virtual conferences with various highly interesting presentations and panels took place over the course of the past two weeks. Dystopia Labs organized the DeFi Discussions event, which focused on various parts of the decentralized finance stack. Recorded sessions are available here.

Another 3-day conference titled Ready Layer One focused on core blockchain infrastructure co-organized by various large ecosystem communities like NEAR, Cosmos, Polkadot, and others had speakers from almost all major decentralized networks including Vitalik Buterin. Recordings will be made available in the next couple of weeks.


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Staking Economy is written by Felix Lutsch from Chorus One with assistance from Chris Remus, operator of the Chainflow validators. Join us in the Staking Economy Telegram to discuss staking. Opinions expressed are our own and do not necessarily reflect the opinions of Chorus One. All content is for informational purposes only and not intended as investment advice.