Axis Chain Liquid Custody Token
Axis Chain's Liquid Custody Token serves as a versatile liquid asset, enabling users to stake their assets from multiple sources, including public blockchains like Ethereum and centralized entities such as cryptocurrency exchanges and banks.Axis Chain's Liquid Custody Token allowing users to stake their assets from multiple sources, including public blockchains like Ethereum and centralized entities such as cryptocurrency exchanges and banks. This capability is enhanced by cross-chain asset mirroring facilitated through the Decentralized Oracle Network (DON), ensuring that the staked assets are secured under Axis Chain's Proof of Liquidity (PoL) consensus mechanism.
The Liquid Custody Token operates through the Axis Chain, where users deposit their assets via the Axis Portal. These assets are securely managed by MPC Custody (supported by Ceffu and FireBlock) while employing quantitative strategies to generate yield. The system ensures liquidity and transaction accuracy through Proof of Liquidity (POL) and Proof of Transfer (POT) mechanisms, and an Active Verification System monitors everything in real time, ensuring security and transparency throughout the asset management process, allowing users to conveniently withdraw their assets.
1. Collateral Acceptance from Public Blockchains and Centralized Agencies
Axis Chain supports collateral deposits from decentralized networks and is designed to work with centralized agencies in the future. This means that while the system is fully operational for accepting assets from public blockchains such as Ethereum, the infrastructure is also prepared to integrate with various centralized entities. These include, but are not limited to, centralized exchanges, crypto banks, and other centralized custodians of digital assets, pending cooperation and integration agreements.
Public Blockchains: Users can currently deposit and stake assets from decentralized networks like Ethereum, allowing them to stake tokens such as ETH or ERC-20 assets.
Potential Centralized Agencies:Axis Chain’s architecture is ready to support collateral deposits from centralized agencies, including popular exchanges like Coinbase or Binance, as well as other centralized financial institutions such as crypto banks. For instance, in the future, users might stake assets held at a crypto bank, with those assets mirrored and staked on Axis Chain through collaboration with the centralized institution.
The goal of this approach is to bridge decentralized networks with centralized agencies, enabling broader participation from users who manage assets in both ecosystems.
2. Issuance and Role of Liquid Staking Tokens (LSTs)
Upon staking their assets from either public blockchains or centralized agencies, Axis Chain issues Liquid Staking Tokens (LSTs) to users. These tokens represent the staked value of the collateral and provide liquidity for the users, allowing them to engage with DeFi protocols while continuing to earn staking rewards.
For example:
A user stakes 100 ETH on Ethereum and receives LST-ETH, representing their staked ETH on Axis Chain.
This LST-ETH can be deployed within Axis Chain’s DeFi ecosystem for activities such as liquidity provision, yield farming, or lending, all while the original ETH continues to earn staking rewards on Ethereum.
The issuance of LSTs maximizes capital efficiency by enabling users to engage with DeFi applications without locking up their staked collateral.
3. Potential for Centralized Agency Collateral Mirroring
A key future feature of Axis Chain is its ability to mirror collateral from centralized agencies, such as crypto exchanges or crypto banks, via the Decentralized Oracle Network (DON). This would enable users to stake assets from these centralized entities while leveraging Axis Chain’s DeFi ecosystem, all without needing to withdraw or move their assets manually.
The DON would play a central role in mirroring these assets, ensuring their status is accurately represented on Axis Chain. Here’s how it would work:
Data Retrieval and Verification: The DON verifies the state of the staked assets held at centralized agencies, such as a user’s BTC held on Binance or an institutional holding at a crypto bank.
Mirroring on Axis Chain: After verification, the DON mirrors the collateral on Axis Chain, allowing users to receive corresponding LSTs (e.g., LST-ETH) that can be utilized within the DeFi ecosystem.
Integration with PoL: These mirrored assets are secured through Axis Chain’s Proof of Liquidity (PoL) mechanism, where validators and liquidity providers secure the network by staking liquidity, further ensuring that the mirrored collateral is both usable and secure.
For instance, a user with BTC stored at a crypto bank could, in the future, have this asset mirrored onto Axis Chain via DON, allowing them to receive LST-ETH without needing to move their BTC from the bank. This potential future functionality allows Axis Chain to be adaptable to a broader range of asset custodians, enhancing cross-ecosystem liquidity.
4. Security Through PoL and DON
The assets, once mirrored, are safeguarded by the combined security of DON and PoL. The Decentralized Oracle Network (DON) ensures the accuracy and integrity of the data from both public chains and centralized agencies, while Axis Chain’s Proof of Liquidity (PoL) mechanism secures these assets in a decentralized manner.
This layered security model ensures that users can stake their assets while maintaining liquidity, with validators in the PoL system using the data provided by DON to validate transactions and secure the network. The result is a system that provides security, flexibility, and liquidity for both decentralized and (potentially) centralized assets.
5. Advantages of Potential Integration with Centralized Agencies
While Axis Chain is already capable of supporting decentralized collateral, future integrations with centralized agencies offer several potential advantages:
Extended Liquidity: Users could retain assets in centralized entities (e.g., crypto banks or exchanges) while gaining access to Axis Chain’s DeFi opportunities through the issuance of LSTs. This would provide more flexibility for those managing assets in both centralized and decentralized environments.
Capital Efficiency: Instead of locking assets into staking contracts, LSTs allow users to continue earning rewards from centralized agencies or blockchains while using the tokens for other yield-generating opportunities.
Broad Ecosystem Participation: By integrating with both decentralized networks and centralized agencies, Axis Chain could provide a seamless experience for users across multiple platforms, maximizing liquidity and staking rewards without forcing asset withdrawals or manual transfers.
6. Workflow Example
Here’s an example of how Axis Chain’s collateral system might work with future centralized agency integration:
A user hold ETH on Mechanisn and stakes it within the bank’s system.
The Decentralized Oracle Network (DON) verifies the status of the staked ETH and mirrors it onto Axis Chain.
Axis Chain issues LST- ETH to the user, representing the mirrored ETH on Axis Chain.
The user can then use LST-ETH in Axis Chain’s DeFi ecosystem for liquidity provision, lending, or other opportunities, all while the original ETH remains staked in the crypto bank.
The DON continually monitors the state of the ETH to ensure accurate representation on Axis Chain.
The Collateral and Liquid Staking Functionality in Axis Chain allows users to deposit assets from both decentralized blockchains and centralized agencies, such as crypto exchanges and crypto banks. While the system is fully operational for decentralized assets, it is designed to potentially support centralized agency collateral through future integrations. By leveraging the Decentralized Oracle Network (DON) and securing assets with Proof of Liquidity (PoL), Axis Chain offers a flexible, efficient system that maximizes liquidity while maintaining security. This approach opens the door to cross-chain and cross-agency participation, providing users with a powerful and scalable staking and liquidity solution.
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