Liquid Staking: Enhancing Flexibility & Efficiency with MilkyWay & Hex Trust

Liquid Staking: Enhancing Flexibility & Efficiency with MilkyWay & Hex Trust

December 28, 2023

Liquid staking has revolutionized the staking landscape in Proof of Stake (PoS) blockchain networks by offering users the opportunity to stake tokens while participating in other DeFi activities. This innovative approach provides increased flexibility, access to liquidity, and promotes the growth of cryptocurrencies. 

Advantages of Liquid Staking


Flexibility
: Unlike traditional staking methods, liquid staking allows traders to utilize their staked tokens for other purposes, such as participating in DeFi activities or trading. This flexibility enables users to maximize their capital efficiency and explore multiple opportunities within the crypto ecosystem.

Reduced Opportunity Cost: Liquid staking eliminates the need to unstake tokens to access liquidity. Instead, users receive a liquid synthetic token in return for their native coins. This way, individuals can avoid opportunity costs associated with waiting for tokens to unstake, thus enabling them to seize timely investment opportunities.

Promoting Cryptocurrency Growth: Liquid staking protocols have been developed on various networks, including Ethereum, Celestia, and others. By providing users with increased flexibility and access to liquidity, liquid staking contributes to the overall growth and adoption of cryptocurrencies.

Introducing MilkyWay Protocol

MilkyWay is a liquid staking protocol for Celestia that offers users the opportunity to stake Celestia (TIA) tokens and receive milkTIA tokens in return. This innovative method provides a more efficient way to stake assets compared to traditional staking processes.

Celestia is a modular network that allows Layer 2 rollup blockchains to utilize its data availability and consensus features. It was launched on the mainnet within the Cosmos ecosystem in late October. Validators in the network use TIA tokens for staking, which helps secure the overall network.

The milkTIA token represents the staked TIA assets while maintaining their liquidity. Users have the flexibility to trade or use these assets as collateral in various decentralized finance (DeFi) products. This arrangement eliminates the need for the typical 21-day unbonding period often found in Cosmos-based blockchains.

What sets MilkyWay apart is that it doesn't rely on a dedicated Layer 1 blockchain. Instead, it leverages smart contracts on Osmosis, which acts as the DeFi hub for the Cosmos ecosystem.

To ensure secure operations, MilkyWay employs a multisig setup on Osmosis, managed by a consortium consisting of seven reputable operators. This consortium includes Everstake, Chorus One, Allnodes, 01node, DSRV, Keplr, and Cosmostation.

Hex Trust’s Role in MilkyWay

Instead of running their own validators on Celestia, MilkyWay collaborates with validators already present in Celestia's validator set and delegates our stake uniformly to them. Their partnered validators ensure that the staking APR remains fair by not charging more than a 10% commission.

Hex Trust has been selected as a validator based on our established reputation and extensive experience in validation. Our primary role is to enhance the security of the network by ensuring the validity of transactions and blocks. Additionally, we actively participate in the consensus process, which plays a crucial role in Celestia's consensus mechanism, ultimately maintaining the stability and reliability of the network.

Hex Trust's comprehensive approach to custody and staking services ensures that institutional clients have secure custody solutions and the opportunity to actively engage in staking, promoting network participation within the Celestia ecosystem. Interested parties can contact the Hex Trust team at enquiries(at)hextrust.com to explore custody and staking opportunities for Celestia tokens ($TIA).

Disclaimer
This material has been prepared by the Hex Trust group (“we”, “our” or “us”). It is not directed to or construed as solicitation or advertising to any person in any jurisdiction where (by reason of that person's nationality, residence or otherwise) the publication or availability of this material is prohibited by any law. This material is not intended for any use that would be contrary to local law or regulation. Products or services mentioned in this material are subject to legal and regulatory requirements in applicable jurisdictions and may not be available in all jurisdictions. Without limiting the generality of the foregoing, we are not licensed with the Hong Kong Securities and Futures Commission to carry on business in any regulated activity under the Securities and Futures Ordinance of Hong Kong.  Accordingly, persons are required to inform themselves of and observe such laws which are in force in their jurisdictions.
Any forecasts, projections and other predictive statements are based on assumptions and expectations in light of currently available information. In addition, any forecast, projection or other predictive statement involves various risks, variables and uncertainties. Any pricing information provided is indicative only and is not intended as a recommendation or an offer or solicitation for the purchase of any digital asset, security or financial instrument, to enter into a transaction involving any digital asset, security, financial instrument or trading strategy, or as an official confirmation or valuation of any transaction mentioned in materials created or distributed by us. We make no commitment to transact at any particular price or at all, now, or in the future. These materials are informational only and do not bind us or any other entity or person in any way. You should not construe the content of any material provided as accounting, financial, legal, tax or other advice, and you should consult your own attorney, financial advisor, tax advisor, accountant or other advisor as to legal, financial, tax, accounting and other matters.
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