Drop Protocol: Cosmos Liquid Staking & DeFi Guide

Everything you need to know to stake ATOM, mint dATOM, and earn Drop points (Droplets) with Chorus One.

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Last updated 6 months ago

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Drop Protocol: Cosmos Liquid Staking & DeFi Guide

Everything you need to know to stake ATOM, mint dATOM, and earn Drop points (Droplets) with Chorus One.

What is Drop Protocol?

Drop is a liquid staking protocol for Interchain assets. It helps Cosmos blockchains by turning staked assets into active opportunities.

Built on Neutron, Drop uses Inter-Blockchain Communication (IBC), Interchain Transactions (ICTX), and Interchain Queries (ICQ) to offer secure and efficient liquid staking services.

Through the Token Factory standard, Drop mints liquid staking tokens (called dAssets) like dATOM and dTIA. These tokens let users earn staking rewards without locking up their assets, participate in DeFi opportunities, and remain eligible for airdrops.

Liquid Staking Explained

Liquid staking allows users to stake their cryptocurrency in a network to earn rewards while retaining liquidity.

This approach combines the benefits of staking (earning rewards and supporting network security) with the flexibility of asset liquidity, making it a popular choice for maximizing capital efficiency.

To learn more please see: What is Liquid Staking?

How to Liquid Stake with Drop

There are two simple ways to liquid stake with Drop. For this example, we’ll use ATOM as the asset.

For Liquid ATOM

If you already have liquid ATOM, you can easily stake it with Drop validators through the Drop platform.

For Staked ATOM:

This process is straightforward and can be done directly via the Drop UI too.

Once completed, you will get access to the following interface:

Next, connect your wallet. You can use Keplr or any other compatible Cosmos wallet of your choice.

After connecting your wallet, you’ll access the main interface. From there, click on the 'Stake' section to begin staking your ATOM.

For Liquid ATOM

If you have native ATOM and want to stake, you can use the first option ‘Wallet balance’ and insert the number of Native ATOM that you want to stake, Drop will then show you the number of dATOM you will get in exchange.

Please note that dATOM increases by auto compounding staking rewards, meaning that the value of 1 dATOM will keep increasing compared to the value of one ATOM.

Next, review your transaction and confirm.

You are now staking with Drop!

This delegation is split among the Drop validator set.

For Staked ATOM

If you already have staked ATOM and want to convert it into dATOM, select the 'Staked Balance' option.

This will display your staked ATOM balance and the validator you are currently staking with.

Finally, choose the amount of ATOM from your staked balance that you want to convert into dATOM.

Simply confirm the transaction in your wallet and the dATOM will be added directly to your balance!

Note: Your ATOM will remain staked with the original validator.

This ensures that even though you now hold a liquid version of ATOM (dATOM), the validator you were initially staking with will not lose their delegation.

Droplets Program & DeFi Strategies

The Drop Protocol will not have a token in its first few months. During this time, the Droplets Program will reward users for supporting the protocol.

A total of 100,000,000 DROP tokens, the governance token of Drop Protocol, will be distributed through the program.

You can earn Droplets by:

Liquid staking with Drop.
Using dAssets in other applications.
Referring friends.

When the Droplets Program ends, Droplets holders will receive Drop tokens and become the first members of the Drop DAO.

Different Ways to Earn Droplets

Liquid Stake with Drop

Stake assets like ATOM and TIA to receive dAssets. For each dollar of dAssets you hold, you’ll earn 1 Droplet per day.

dAssets are secure, liquid versions of staked positions that let you earn auto-compounding rewards, exit positions instantly, and use assets in DeFi for extra yield.

Droplets are based on the daily value of your dAssets, not the value when they were first staked.

Use dAssets in the Drop Ecosystem

Earn more Droplets by using dAssets in Drop ecosystem applications, which often include multipliers for additional rewards.

Let's look at an example:

He earns 500 Droplets (400 more than the 100 he would earn by simply holding dATOM) plus any DeFi rewards Astroport provides!

Refer Friends

Earn 25% of the Droplets your referrals earn.
Earn 12.5% of the Droplets their referrals earn.

Let's look at an example of how this could work:

You refer Bob, who earns 100 Droplets.
Bob refers Tina, who earns 100 Droplets.
You earn 25 Droplets from Bob and 12.5 from Tina.

Best of all, these bonuses do not reduce their earnings!

A Quick Recap of Drop Protocol

To help tie it all together, here's an overview to help illustrate all the possibilities you have to bring your assets into DeFi.

A Note to Institutional Investors

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Last updated 6 months ago

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