Odaily Planet Daily News Liquidity staking protocol StaFi announced that it has supported the Cosmos Liquidity Staking Module (LSM) on the test network. LSM is a new Cosmos SDK module being developed by Iqlusion, which will allow pledged tokens to be directly staking liquidity through the StaFi protocol. There is no intermediate step of unstaking. LSM uses the "representative tokens" mechanism to realize liquidity staking. When users pledge their assets, they will receive a representative token, which can be transferred and traded, and assets can be redeemed at any time. The LSM will limit the percentage of liquidity ATOMs pledged by all liquidity staking providers to no more than 25% of the total supply of staked ATOMs to prevent liquidity staking providers from collectively controlling more than 1/3 of the total supply of staked ATOMs.
Additionally, validators who want to receive delegation from liquidity staking providers will need to bind a certain amount of ATOMs themselves to avoid malicious behavior by validators. LSM enables users to instantly unlock their staked ATOMs without waiting for the 21-day unlock period.