The Web 3 and Blockchain Infrastructure provider Coinbase Cloud has announced a new partnership with the Acala Foundation, the Defi-Hub from polka dots announced by first KSM Liquid staking up Karura is brought. KSM is the native token of the Kusuma Network, a public pre-production environment for Polkadot.
Unlike traditional staking on proof-of-stake networks, liquid staking allows asset delegators to access their funds while staking their tokens. This allows validators to contribute their staked assets to other applications, potentially unlocking more value through Defi activity.
Liquid staking on Polkodat’s Karura
According to the official blog post, Coinbase Cloud powers “allow listed validators who receive delegations from the community.” On Karura, which allows users to stake KSM for LKSM, users are not constrained by an unbinding period – typically between 7 and 28 days on the Polkadot network – and can, for example, deposit their LKSMs on Terra’s anchor log to earn returns achieve.
The latest developments follow Coinbase Cloud, which has worked on Polkadot and Kusama since its earlier testnets and has offered Web3 builder infrastructure solutions for Substrate, a Polkadot-based framework for building custom blockchains.
Karura users can also stake their DOTs and receive representative L-Tokens (LDOT) as they are tradable in the Polkadot ecosystem and redeemable against the underlying assets. Additionally, the protocol’s liquid staking will allow validators to mint a USD, the native stablecoin of the Polkadot and Kusama ecosystems.
Despite the benefits of liquid staking, Coinbase Cloud warned, validators still lose some of their tokens when slashed.
Coinbase Chief Product Officer Surojit Chatterjee once said that Coinbase Cloud aimed to power the Amazon Web Services for cryptocurrencies to be designed to help developers build their applications faster.
The infrastructure provider recently expanded its partnerships with major Layer One blockchains, including the Ethereum-Challenger Avalanche. Since then, the Coinbase Wallet SDK allows developers to extend their app’s reach to Coinbase users and provide access to the Avalanche ecosystem via Coinbase Wallet.
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