Proposal Details
Proposal #743
Proposal title
Create Volume Splitting Group for LSTs of Quote Assets
Submit time
Deposit end time
Voting start time
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Proposal #743 description
This proposal would create a new Volume Splitting Gauge for a collection of Liquid Staked Token representatives of Quote assets as well as approve the incentivization of this grouping.
Background
Liquid staking tokens are becoming increasingly popular in the Cosmos ecosystem.
These were previously incentivized by automatic external incentive matching on the category incentive system by Proposal 522 but have not been incentivized since the migration to the slippage optimization Incentive algorithm removed the existing external matching mechanics.
This proposal would include incentives for Liquid Staked Tokens of Quote assets, declaring that Liquid Staked Tokens are also key strategic assets for a decentralized exchange operating within the predominantly proof of stake Cosmos ecosystem where two week plus bonding periods are typical.
All Liquid Staked Tokens will share a single Volume Splitting Group so the most popular Liquid Staked Tokens will receive the most incentives, while newer entrants that are still gaining in popularity may receive a higher proportion compared to liquidity to encourage the growth of liquidity. As this incentive share reallocates each daily epoch based on volume, Osmosis will facilitate the movement of liquidity toward the most widely liquid LST and further encourage the active arbitration of LST prices against redemption rate by liquidity providers.
This group would be onboarded to the incentives system in the next routine proposal, replacing the current stATOM only grouping. Incentive quantity will remain constant during this transfer rather than being impacted by the algorithmic changes.
OSMO LSTs are excluded due to previous liquidity provision arrangements resulting in the Osmosis community pool already owning the majority of liquidity.
The expansion and diversification of these assets is not addressed in this proposal.
Assets to be included
While this proposal is not a comparison of LST protocols, a brief description of each currently trading on Osmosis is included.
ATOM
qATOM by Quicksilver Quicksilver focuses on the freedom of choice for liquid staking delegation while incentivising choosing active validators with lower voting power. Read More
rATOM by Stafi StaFi provides a wide range of Liquid Staked assets across multiple Cosmos and non-Cosmos chains. Read More
stATOM by Stride Currently incentivized by Osmosis, stATOM is the prevalent Liquid Staked ATOM in use across the Cosmos. Read More
stkATOM by Persistence Persistance initially operated stkATOM as an Ethereum-based token, stkATOM since has launched natively on in the Cosmos. Read More
Celestia
milkTIA by MilkyWay Established as a native token on Osmosis, Milkyway was the first LST for Celestia to be launched and saw rapid adoption. Read More
stTIA by Stride Stride have expanded their offerings of stAssets to include TIA and have quickly established a thriving competition between the two liquid staked representations of TIA. Read More
Ethereum
wstETH by Lido wstETH via Neutron was recognized as the Canonical version of wstETH on Osmosis by Proposal 626. wstETH is widely in use in the Ethereum ecosystem but has yet to gain widespread usage on Osmosis. Read More
Forum Thread: [https://forum.osmosis.zone/t/create-volume-splitting-group-for-lsts-of-quote-assets/2481](https://forum.osmosis.zone/t/create-volume-splitting-group-for-lsts-of-quote-assets/2481