▶️Interchain Staking
Interchain Staking Module Overview
The Interchain Staking (ICS) Module is the core component in Quicksilver that enables liquid staking for external blockchains. By utilizing this module, users can deposit native assets from IBC-connected chains and receive tokenized representations of their staked positions (i.e., qAssets). The ICS module then manages the lifecycle of these staked tokens—from deposits and auto-compounding of rewards to unbonding and redemption—all while allowing users to choose their preferred validators through intent signaling.
Key Objectives
Liquid Staking on Remote Chains Allow users to stake assets on an external chain—such as Cosmos Hub (ATOM), Osmosis (OSMO), or Stars (STARS)—while retaining liquidity in the form of qAssets on Quicksilver.
User Sovereignty & Validator Choice Grant users control over which validators secure their tokens, preserving decentralization and avoiding validator centralization.
Efficient & Transparent Rewards Automate reward accrual and distribution so that qAsset holders benefit from staking yields, minus protocol fees or slashing events.
Simplified Deposit & Redemption Provide a straightforward deposit process and a clear path to redeem qAssets for the underlying assets, respecting each chain’s unbonding rules.
Core Functions
Deposits
IBC Transfer: Users initiate a deposit by sending native tokens (e.g., ATOM) from the external chain to a deposit account controlled by the Quicksilver chain.
qAsset Minting: Once tokens arrive, the ICS module mints the corresponding qAsset (e.g., qATOM) to the user’s Quicksilver address, reflecting their newly staked position.
Rewards Accrual & Auto-Compounding
Interchain Queries & Accounts: The ICS module interacts with the remote chain via Interchain Accounts (ICA) and Interchain Queries (ICQ) to track delegations and collect rewards.
Epoch-Based Compounding: At regular intervals (epochs), the module redeems staking rewards from the remote chain and restakes them, increasing the user’s total staked position and adjusting the redemption rate to reflect these new rewards.
Redemption (Unbonding)
Redemption Request: When users wish to reclaim their native tokens, they submit a MsgRequestRedemption transaction on Quicksilver. The ICS module locks the corresponding qAssets and initiates the unbonding process on the external chain.
Unbonding Period: Once unbonded on the remote chain, the ICS module returns the redeemed tokens to the user’s wallet on that chain, burning the qAssets on Quicksilver.
Intent Signaling & Delegation Strategy
Validator Selection: The ICS module incorporates Quicksilver’s Signaling Intent feature, letting users specify a list of validators and desired allocation percentages on the remote chain.
Rebalancing: At each epoch, the module aggregates user preferences and redelegates as needed—within the limits of the remote chain’s redelegation constraints—to keep actual delegations aligned with users’ stated Intents.
ICS Lifecycle & Architecture
Interchain Accounts (ICA)
Control: The ICS module uses ICA to establish and manage one or more controller accounts on the remote chain.
Actions: These accounts perform delegation, redelegation, claiming rewards, and unbonding operations on behalf of Quicksilver users.
Interchain Queries (ICQ)
Data Collection: ICQ allows the ICS module to query chain-specific information—such as a validator’s total stake, slashing status, or reward balance—without requiring direct user intervention.
Dynamic Adjustments: The module uses query results to rebalance staking, apply reward socialization, and issue or burn qAssets.
Redemption Rate & Reward Socialization
Redemption Rate: Each qAsset tracks an ever-increasing redemption rate to reflect auto-compounded staking rewards.
Socialized Outcomes: If slashing occurs, or if a validator is tombstoned, the ICS module adjusts the redemption rate for all qAsset holders to maintain fungibility.
Epochly Rebalancing
Intent Aggregation: Each epoch, the ICS module calculates an aggregate intent (i.e., combined user preferences).
Gradual Redelegation: Because remote chains often limit how many redelegations can happen within a given time, the module migrates stake incrementally until it reaches the target distribution.
Benefits & Use Cases
Liquid Staking on Any IBC-Connected Chain By leveraging Interchain Accounts, Quicksilver extends liquid staking capabilities to any IBC-enabled chain that supports ICA and ICQ.
Enhanced DeFi Utility Users can hold, trade, or deploy qAssets across Cosmos DEXes, lending protocols, and more—all while still earning staking rewards.
Improved Validator Decentralization The Signaling Intent feature nudges users to select diverse, high-performance validators, helping mitigate centralization risk and strengthen network security.
Transparent, Automated Rewards The ICS module seamlessly handles reward accrual and auto-compounding, freeing users from the complexities of manual claiming or re-staking.
Future Developments
Support for Non-ICA Chains Quicksilver aims to expand ICS-like functionality to IBC-connected chains that don’t yet implement Interchain Accounts, broadening the reach of liquid staking beyond the Cosmos SDK ecosystem.
Integration with CosmWasm A forthcoming CosmWasm implementation on Quicksilver could enable cross-chain smart contracts that build on ICS logic—e.g., novel DeFi applications that manage multi-chain staking strategies automatically.
Conclusion
The Interchain Staking (ICS) Module is the backbone of Quicksilver’s liquid staking solution, providing a streamlined method for users to deposit tokens, earn rewards, and access liquidity—all while preserving decentralization through user-driven validator preferences. Through its integration with ICA and ICQ, Quicksilver’s ICS Module empowers a wide range of cross-chain DeFi possibilities, fostering a more secure and interconnected Cosmos ecosystem.
Last updated