MilkyWay: A New Era of Staking

6 min readAug 26, 2024

This article was first published on X/Twitter.

MilkyWay is a pioneering modular staking platform set to transform the way blockchain networks function. It offers both liquid staking and restaking services, providing a flexible and easy-to-use system that meets the needs of different blockchain projects.

Rooted in the principle of modularity — where components can be independently developed, optimized, and interchanged — MilkyWay simplifies the complex staking process. This makes it easier for new platforms to get started and succeed, offering a smoother experience for both developers and users.

The Problem: Fragmented Crypto-Economic Security

One of the biggest challenges in the blockchain world today is the fragmentation of crypto-economic security. Most blockchains use Proof-of-Stake (PoS) systems, which require large amounts of collateral to secure the network. However, this collateral is typically locked to a single chain, leaving other parts of the ecosystem under-secured. This not only limits the potential of staking but also hinders the broader adoption of decentralized services.

MilkyWay’s Solution

MilkyWay addresses these challenges with a highly customizable and modular staking protocol. This approach emphasizes flexibility, scalability, and an open market structure, enabling Actively Validated Services (AVSs) to tailor their security settings according to their specific needs.

Customizable Security Options: AVSs can secure their networks using a variety of tokens, including their own native assets. This approach empowers projects to grow their token value while seamlessly integrating with others. AVSs can precisely adjust how assets are allocated and distributed, ensuring that their security measures align with their operational requirements.
Evolving Restaking Layer: MilkyWay’s restaking layer is designed to adapt and grow, incorporating new features and updates to meet the demands of an ever-evolving blockchain landscape. Their parameter switching feature allows AVSs to gradually transition from rented security to full autonomy with their own tokens, ensuring stability and avoiding sudden market disruptions.
Open Market Structure: The platform supports a free-market environment, allowing any participant to engage with the restaking layer. This gives AVSs complete control over their level of decentralization while reducing security fragmentation and providing robust protection across multiple networks.
Optimized Integration: MilkyWay simplifies the integration process for AVSs, allowing them to concentrate on their core application logic o without being burdened by complex security management.

Journey Rooted in Modularity

Believing that modularity is the future, MilkyWay was created with the intention of growing alongside its community. This flexibility fosters developers to experiment and optimize specific functionalities.

MilkyWay’s journey began with the launch of the first liquid staking solution for the Celestia ecosystem in December 2023. This marked the start of an end-to-end staking portal designed to empower TIA holders. By unlocking staked positions, users could participate in various DeFi protocols to maximize returns. This was just the beginning, as MilkyWay is now moving into Phase 2 with the introduction of a multi-asset restaking protocol.

Liquid Staking

MilkyWay’s liquid staking provides a flexible alternative to traditional lock-up periods. When you stake your TIA tokens, you receive milkTIA, a liquid token that represents your staked assets. milkTIA can be utilized across various DeFi activities, allowing you to earn rewards while retaining liquidity for trading, lending, and borrowing.

Here are some ways to utilize milkTIA:

Osmosis: Add milkTIA to liquidity pools on Osmosis, the largest DEX in the Cosmos ecosystem, to earn additional yield.
Demex: Use milkTIA for decentralized trading on Demex, where you can swap it with other assets or add it to liquidity pools to earn fees.
Dymension: Engage in lending or liquidity provision on Dymension, maximizing your returns while keeping your TIA tokens staked.
Camelot: Soon, you may also be able to use milkTIA on Camelot, a popular DEX on the Arbitrum network, for trading and advanced DeFi strategies.

Exploring Restaking

Building on the success of liquid staking, MilkyWay is expanding into restaking, a new method for validating transactions and securing blockchain networks. Restaking allows you to deposit your staked tokens or liquid staking tokens (LSTs) to secure decentralized services beyond their original chain. This not only enhances the security of these services but also generates additional yields for you as a staker.

MilkyWay’s restaking solution is designed to adapt to different Actively Validated Services (AVSs). Whether it’s for securing fast finality layers, data availability layers, oracles, bridges, or AI networks, MilkyWay’s restaking protocol supports a diverse range of applications.

ELI5 (Explain Like I’m 5)

Imagine you have a battery that makes your toy car zoom around. It’s great fun, but then you notice your flashlight also needs a battery. Instead of getting another one, you decide to use the same battery for both. Now, your car zooms, and your flashlight shines, so you get to enjoy both toys without needing more batteries.

In MilkyWay Restaking, your staked tokens are like that battery. You’re using them to power one thing, but by restaking, you can also help power other things and earn extra rewards. It’s all about making the most of what you already have, just like sharing your battery lets you have more fun with both toys.

What’s Next for MilkyWay?

MilkyWay isn’t just about today’s solutions; it’s about building the future of staking. The upcoming launch of the MILK token will introduce a governance mechanism, giving users a direct role in shaping the platform’s development. This token will empower the MilkyWay community to influence key decisions, ensuring that the platform evolves in line with their needs.

MilkyWay is also set to launch a restaking layer on the Initia ecosystem, further establishing its leadership in modular staking. This expansion will drive the growth of the modular ecosystem, offering users increased yields, use-cases and enhancing the security of a broader range of decentralized services.

Strengthening the Initia Ecosystem

MilkyWay’s entry into the Initia ecosystem represents a major advancement, highlighted by the introduction of milkINIT — a liquid staking solution tailored for Initia. Like milkTIA for Celestia, milkINIT provides Initia token holders with liquidity and flexibility, allowing them to stake their assets while continuing to earn rewards. Users can then utilize milkINIT tokens across various DeFi applications within the Initia ecosystem to optimize yields and maximize returns.

MilkyWay’s involvement in Initia goes beyond liquid staking. The platform is also developing a dedicated appchain within Initia, leveraging its modular framework. This appchain will play a crucial role in securing and enhancing the ecosystem’s infrastructure, supporting a wide range of decentralized services, and ensuring the network’s growth and stability.

Conclusion

MilkyWay is much more than a staking platform; it’s a gateway to a new era of blockchain that is more flexible, secure, and rewarding. By seamlessly integrating liquid staking and innovative restaking protocols, MilkyWay is leading the charge towards a future where blockchain networks are interconnected and robust.

Looking ahead, MilkyWay’s vision extends beyond just staking. The upcoming launch of the Initia mainnet will further solidify MilkyWay’s role as a critical infrastructure provider, driving the modular ecosystem forward. With its modular design, MilkyWay is perfectly positioned to introduce new staking paradigms and utilities, ensuring that the platform evolves in step with the needs of its community.

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