Protocol Overview
Unlike Bitcoin-like Proof-of-Work (PoW) chains, which uses computing power to secure the network while consuming large amounts of energy, Proof-of-Stake networks uses stake aka its network token and variations of the Byzantine Fault Tolerant (BFT) algorithm to secure the network. Polkadot uses NPoS (Nominated Proof-of-Stake) as its mechanism for selecting the validator set. It is designed with the roles of validators and nominators, to maximize chain security.
Polkadot network targets 50% active DOT staking with annual nominal return from taking reward. Effectively this creates an opportunity cost for using DOT in other applications versus staking. If DeFi applications provide a better yield than staking, it could motivate the collective movement of funds from staking to lending, causing a 'bank run' and risking the security of the entire network.
Karura’s Liquid Staking protocol is to solve the illiquidity challenge of staked assets. The protocol establishes a staking pool, where users can stake KSM and mint LKSM, which is Kusama staking yield-bearing, while fungible, tradable and usable in other protocols and parachains.

Rollout roadmap

Phase #1 (We are here)

  • (✅) Minting LKSM
  • (✅) Proxy staking is used before XCM-enabled fully autonomous staking is ready
  • (✅) Low Staking Cap: 3000 KSM and increase gradually daily, staking reward accrued, public access. Access app here.
  • (✅) LKSM as collateral for kUSD
  • (✅) LKSM pools

Phase #2

  • (✅)Redemption is available
  • LKSM v2 is under development - XCM-enabled autonomous staking/unstaking
  • Indicative voting on Validator selection

Phase #3

  • Enable XCM-powered autonomous cross-chain staking
  • On-chain voting on Validator selection
  • Validator slash insurance
Last modified 3d ago