Staking Letter #10: A New Chapter in Cosmos LST - StaFi Hub Migration

October 18th, 2024

In August 2023, our team initiated discussions regarding the migration of both StaFi Chain and StaFi Hub, alongside updating FIS Tokenomics to version 2. The primary driver for these discussions was that the existing app chain model could no longer adequately ensure the security of our rTokens, necessitating a shift from an app chain model to a contract model.

Community call: https://dao.stafi.io/t/stafi-community-call-for-december-9/136
Tokenomics V2: https://docs.stafi.io/stake/tokenomics/

As we envision StaFi 2.0 in 2024, this migration remains a crucial component of our roadmap. Since FIS serves as StaFi Chain's native token, the chain migration will naturally lead to a rebranding of FIS. However, given the substantial scope of this undertaking, progress will be measured and deliberate.

Migration
- StaFi Chain rToken
  - ✅ rDOT: sunset
  - ✅ rKSM: sunset
  - ✅ rSOL: migration to Solana
  - ➡️ rFIS debond : pending
- StaFi Hub rToken
  - ➡️ rATOM: pending
  - ➡️ rIRIS: pending
  - ➡️ rSWTH: pending
  - ➡️ rHUAHUA: pending
- Token inflation
  - ✅ Burn: started
  - ➡️ Decrease validator set: pending
  - ➡️ Decrease fixed inflation: pending
Rebrand
- ✅ Liquid Staking: Liquid staking token → Liquid staking as a Service
  - ✅ ETH LSaaS Stack
  - ✅ EVM LSaaS Stack: SEI, BNB
  - ✅ LRT Stack: Eigen Layer, Karak
  - ✅ BTC LSaaS Stack: Babylon
  - ✅ CosmWasm LSaaS Stack
  - ✅ SOL LSaaS Stack
- ➡️ Token: pending (after migration completed)

The current focus is on StaFi Hub's migration, for which we've already submitted a proposal that has received community approval.

Migration proposal & discussion: https://dao.stafi.io/t/discussion-draft-migrate-stafihub-to-neutron/143
Community vote: https://voting.opensquare.io/space/stafi/proposal/QmejNH1yXPzn1iUhPRLuDUotKG1L9DTdgFBcvphyH6r1zS

StaFi Hub, built on Cosmos SDK, is an application-specific blockchain designed to provide Liquid Staking solutions within the Cosmos ecosystem. It currently supports multiple tokens including ATOM, IRIS, and HUAHUA. This migration phase will transfer StaFi Hub's rTokens to either Neutron or the upcoming CosmWasm-enabled Cosmos Hub, depending on their respective release schedules.

rToken Migration

The migration of rTokens from StaFi Hub will be directed to a CosmWasm-compatible Cosmos chain, with Neutron currently being the primary candidate. We've already successfully completed testing for rATOM on the Neutron network. Feasibility studies are currently underway for the migration of additional tokens including rHUAHUA, rSWTH, and rIRIS.

This migration process will be comprehensive, encompassing not only the tokens themselves but also their associated liquidity pools and infrastructure. We estimate the entire migration process, including thorough testing and deployment, will take approximately six months to complete.

Decrease FIS Inflation

Unlike StaFi Chain, StaFi Hub operates without issuing its own native token. Instead, it utilizes a portion of the inflationary Treasury FIS from StaFi Chain, which is periodically transferred to StaFi Hub to incentivize its validators.

Following the completion of StaFi Hub's migration, this FIS transfer mechanism will be discontinued. The FIS tokens previously allocated for StaFi Hub validator incentives will instead be redirected to the burning process on StaFi Chain, contributing to the token's deflationary mechanism.

StaFi Hub treasury account: https://www.mintscan.io/stafi/address/stafi1n0tpw5wtzderaftx8lfuzve39sx3gzsdgsjjqn
FIS transfer transaction, about 200w FIS per year: https://stafi.subscan.io/account/33DgUpArHKJgYMepNaqkXFEzYipuD8UYfZsXDmG8ZbHStWAw?tab=transfer

More Adoption

The migration of StaFi Hub represents a strategic shift towards CosmWasm-based Liquid Staking Tokens (LSTs) within the Cosmos ecosystem. This architectural improvement means that any Cosmos chain supporting CosmWasm can now host LST functionality directly, enabling users to participate in DeFi activities without the need for cross-chain transfers. This not only streamlines the user experience but also helps individual chains maintain stronger liquidity depth within their own ecosystems.

About StaFi

StaFi is a leading Liquid Staking infrastructure provider and protocol for PoS chains. Its Liquid Staking as a Service (LSaaS) framework enables developers to create Liquid Staking Tokens (LSTs) and Liquid Re-staking Tokens (LRTs) across ecosystems like ETH, EVM, BTC, CosmWasm, and SOL. By issuing rTokens (e.g., rETH, rMATIC, rBNB), StaFi unlocks the liquidity of staked assets, allowing users to earn staking rewards while retaining the flexibility to engage in DeFi. With support for major blockchains such as Ethereum, Solana, Polygon, BNB Chain, and Cosmos, StaFi bridges liquidity and security in Proof-of-Stake networks.