To further enhance the security model of StaFiHub rTokens, this SIP is a follow-up proposal to the Tokenomic 2.0, moving the rToken decoupling forward to the native chain. The idea here preferably proposes to migrate StaFiHub to Neutron after comparing the deployments among Cosmos ICS(Interchain security), Smart Contract platforms and Celestia DA.
StaFiHub is an appchain of the StaFi Protocol that serves the CosmosSDK based projects to issue LSTs. In the Tokenomic 2.0, decoupling rToken from the appchain security to the native chain security is essential, the solution is to migrate StaFiHub deployment from a solo chain to a native chain, hence gain a high level security, especially from the aspect of economy. The TVL of rToken in StaFiHub is about $2.5Mil, while the FIS staked value of StaFiHub appchain is about $1.05mil(3mil FIS), for further increase target of rToken TVL, a consumption is the stake value of an appchain should be far more than TVL built upon on chain.
Currently, the FIS stakes of StaFiHub are from Treasury in StaFi Chain, 2 Mil FIS rewards to the validators each year in StaFiHub for their contribution to the network, the reward rate is about 2%. Supporting security by continuously distributing reward to appchains is not sustainable, either it can’t gain a big staked TVL, nor it can’t reward more to the validators. The current StaFiHub is permissioned, it also brings concern to the coming stakers.
The motivation is simple here, aiming to more rToken TVL by eliminating the security concern. StaFi Protocol has experience in launching LSTs in EVM chain, deployment in a smart contract layer and gaining security from the underlying layer will change the security model of rToken, it is called decoupling.
Neutron is a one of the few blockchains in Cosmos that brings Smart Contracts into the Cosmos using CosmWasm, it is secured by the Cosmos ICS, fully inheriting the security from CosmosHub, where StaFiHub can gain security from CosmosHub.
The redeployment of the StaFiHub in Neutron not only changes the security model of the appchain, but also updates many aspects, such as the way that stakers interact to the rToken app, the usage of FIS in the Cosmos ecosystem, the rBridge, the rDEX, it also changes the way how StaFi rToken solution serve to the CosmosSDK based projects and etc. Ultimately, although the redeployment will take up a lot of resources, it is worthy to do it for security and sustainability.
Combing the Nuetron’s ICS(Interchain Security), ICA(Interchain Communication) and ICQ(Interchain Query), the StaFiHub can be restructured as below. The core part of StaFiHub will be a set of CosmWasm smart contracts, the Off-chain service will manage the era trigger and validator selection.
Deployment in Neutron will form new user flows as well. If you want to stake ATOM, new ATOM will go to contract of Neutron via the IBC hook on the Cosmos Hub network, instead of going to appchain directly, and contract will handle the rToken minting and sends the corresponding amount back to the user via IBC/ICA/ICQ.
A following deep dive into the tech is needed, this proposal won’t go into it.
StaFiHub will still remain in the Cosmos ecosystem and sever as a LSD solution for CosmosSDK based projects, while enjoying the IBC(interchain community) infrastructure for easily enabling the interoperability and maximally maintain the usability of the current structure of StaFiHub to save the recreation of flywheel.
There are comparisons among the solutions that can be used to redeploy StaFiHub.
Simply speaking, deployment in a Smart Contract(SC) platform will remove the validator set and kill the inflation of StaFiHub. ICS also supports non-validator sets, but incentives should be created to reward those validators who are willing to provide resources in CosmosHub(V1 Ver of ICS needs all validators in CosmosHub set to support consumer chains), that does not kill the inflation with ICS. Celestia mainly supports Data availability and modules that bring flexibility in development, but there will not be a big difference in the change of economic set when using Celestia. Other Smart Contract platforms in Cosmos eco, such as Juno and Evmos, deployment is workable but I don’t recommend at the current stage as the lack of dev community, and their underlying security is still appchain.
For the conclusion, there are principles for selecting layers.
- Security Model: Cosmos ICS → CosmosICS+SC → CosmosSDK Appchain + SC → CosmosSDK Appchain
- Economic Model: CosmosICS+SC → Cosmos ICS → CosmosSDK Appchain + SC → CosmosSDK Appchain
Neutron and Stride can represent Cosmos ICS(StaFiHub can be one)
Neutron represents CosmosICS+SC(Only one atm)
Evmos and Juno represents CosmosSDK Appchain + SC
StaFiHub represents CosmosSDK Appchain
StaFiHub can apply to be a Cosmos consumer chain using ICS, but it is complex(even ‘permissionless’), but StaFiHub will still need to face the economic sustainability issues. For better security and economy, Neutron is an optimal solution.
The decoupling is ongoing, see progresses
- Some of the Bridges connections are removed
- rDOT and rKSM are removed from StaFiChain appchain, rSOL is migrated from StaFiChain to Solana.
If this proposal works, there will be the following actions needed before the relaunch.
- StaFi-Neutron solution of rToken only supports ICA(Interchain account) enabled CosmosSDK based chain, while current IRISnet and Chihuahua do not support ICA, a discussion on how to deal with the rIRIS and rHUAHUA should be raised in a later stage.
- The ICA enabled chains, Carbon(rSWTH) and CosmosHub(rATOM) should be migrated to the StaFi-Neutron, a following plan should be raised and well discussed.
- Infra and builtin apps, such as IBC relayer, rBridge and rDEX, should be discussed how to move to the next(cease or migrate)
- The Inflation set of FIS in the Cosmos ecosystem should be well discussed, how to move to the next steps, and what is the strategy.
This is a drafted proposal, all feedback is welcome.