What Is Tenet? The First Diversified Proof of Stake Blockchain
Tech Deep Dives

What Is Tenet? The First Diversified Proof of Stake Blockchain

Created 11mo ago, last updated 10mo ago

CoinMarketCap Academy dives into Tenet, a diversified proof-of-stake (DPOS) blockchain building using Cosmos SDK.

What Is Tenet? The First Diversified Proof of Stake Blockchain

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The blockchain industry is constantly evolving, with new projects and protocols emerging at a breakneck pace to help tease out the full capabilities of the technology and deliver increasingly powerful use cases.

Now, a new, user-centric blockchain, known simply as Tenet, is built using the Cosmos SDK and promises to provide a modular and flexible framework for developing powerful decentralized applications (DApps).
This platform introduces a new consensus mechanism called Diversified Proof of Stake (DPOS) to power potentially the most secure and accessible DeFi ecosystem yet while dismantling typical barriers to entry through a novel stablecoin solution.

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What Is Tenet?

Tenet is bringing the most battle-tested decentralized virtual machine implementation to the Cosmos ecosystem — the Ethereum Virtual Machine (EVM). This will allow developers who are familiar with Ethereum’s tooling and SDKs to create and deploy applications on TENET Chain easily.
This will provide current Ethereum and EVM-chain developers with a high-speed blockchain suitable for high-throughput and mainstream applications — including finance (DeFi), social apps, data storage services and decentralized autonomous organizations (DAOs).
Since TENET Chain is built on the Cosmos SDK, applications built on the platform immediately benefit from interoperability with the broader Cosmos ecosystem, thanks to the InterBlockchain Communication Protocol (IBC) — this includes popular chains like Cronos, Kava, Osmosis, Canto and Thorchain.
Tenet introduces the concept of "diversified PoS", which sees it rely on the shared market strength of a variety of other Proof-of-Stake blockchains, to help massively reduce its vulnerability to attacks.

Learn more about the different consensus mechanisms, here.

The team behind Tenet believes that using LSDs as a native staking instrument permits a more diverse and secure system, allowing the network to achieve extreme economic stability. The following equation demonstrates how DPOS can be used to stack the security of multiple POS chains together to exceed the security of any one component chain.

StakedA is the security afforded by staked $TENET tokens, and LSDB, LSDC, etc., is the security contributed by staked LSD assets.

For this reason, Tenet allows users to stake their cross-chain LSDs to the protocol and help to secure the blockchain. These users can operate their own validator or delegate their stake to a third-party validator to share in the transaction fees accrued on the network.
Users that stake their LSDs to help bolster TENET Chain’s security will receive a yield on their assets. The platform will use a vote-escrow system in combination with native gauges to ensure all stakeholders in the Tenet ecosystem are fairly rewarded or incentivized.
Two of the first applications built on TENET Chain include an in-house DEX used to provide liquidity for staked LSDs as well as an open lending market where users can lend/borrow LSDs and LSDC peer-to-peer.

Who Are the Founders of Tenet?

The platform is being built by an established team comprised of CEO Greg Gopman — the co-founder of Akash Network and previously CMO of Ankr; COO Dan Peterson, previously Revenue Operations Specialist at $3B staking firm Blockdaemon; and Alex Cheng, formerly a senior product manager at Tendermint-Cosmos.

Advisors include OpenAI fellow Andrew Carr and Camyar Matini, Blockdaemon's Director of Growth Strategy.

What Is the Liquid Staking Dollar (LSDC)?

Tenet introduces a robust decentralized stablecoin known as the Liquid Staking Dollar, or LSDC. The token is backed by a distributed basket of liquid staking derivatives (LSDs). These will include ETH, BNB, ATOM and ADA derivatives, with the potential to support additional assets in the future.
The LSDC token can be minted with overcollateralized LSD positions across several popular protocols, platforms and asset types. This allows it to maintain its peg with zero reliance on centralized infrastructure like banks.
The stablecoin is overcollateralized and is backed by an on-chain proof-of-reserve that proves its solvency and resistance to black swan events — like collapsed TerraUSD (UST).
It also helps LSD users easily maximize their capital efficiency, by unlocking an additional source of yield on their deposits and easily leveraging up using interest-free loans available via the stablecoin protocol.
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Current State of Development

Tenet is currently operating a testnet with which users can now interact by adding the Tenet network and RPC details to their Web3 wallet — there are no plans for a community airdrop. Instead, the platform will be conducting its public sale in Q2 2023 before listing on centralized and decentralized exchanges.
DAO Maker was recently revealed as Tenet’s IDO partner. The platform is currently one of the best-performing IDO launchpads by all-time high ROI and will incubate the project over its development cycle.
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Tenet's tokenomics model was inspired by the recently elaborated veToken system and is designed to maximize participation in the network. The parameters of Tenet's vote-locking system are shown below:
According to the full tokenomics, $TENET will launch with an initial market capitalization of $625,000 (excluding liquidity) with all investors subject to a 3-month cliff before seeing their tokens unlocked linearly over 20 months.

Per the official roadmap, Tenet is slated to launch its mainnet in Q3 2023, a suite of applications will follow shortly thereafter, including the decentralized exchange (DEX), lending market (alpha product) and LSD hub. The native gauge system will go live in Q4 2023.

How Does Tenet Work?

The operating parameters of Tenet's Diversified Proof of Stake module will be determined by decentralized governance, where participants can propose and vote on details like the reward weight to determine how staking rewards are split between $TENET stakers and LSD stakers. Users can also vote on which LSDs are supported by the module.
According to the official documentation, the security of TENET chain is equal to the sum total security of its own native staking asset ($TENET) and the security of any LSDs staked on the network. In time, it could eventually become more secure than any single POS chain (depending on the total value staked).

Tenet aims to make the staking process as seamless as possible, ensuring users get the same experience whether staking TENET tokens or LSDs derived from other native gas tokens.

Only $TENET stakers can participate in the governance of the network, LSD stakers are excluded from this process.

Native $TENET tokens always have a reward weight of 1, but this number is flexible for other stakeable assets. Such that with a reward weight of 1 for $TENET and 0.5 for LSDB, $TENET stakers will share 66.6% of staking rewards, with the remaining 33.3% going to LSDB stakers.

These rewards are derived from inflation and transaction fees, similar to Ethereum. Rewards are paid in the form of the TENET native asset.

TENET Chain also supports an optional third reward type known as the take rate, which is an annualized tax applied to LSDs staked on the platform. This take rate is shared among stakers on the TENET blockchain, helping to diversify yields.

Much like other Proof of Stake blockchains, users will be free to delegate their stakeable assets to a validator of their choice, based on properties like commission fee, uptime and more.

By using LSDs to secure its blockchain, Tenet can effectively piggyback on the security of multiple sovereign chains. Because of this, an attacker would need to take down multiple POS chains to successfully attack Tenet.

The platform is built for a non-technical user base and aims to provide a human-friendly interface to the rapidly growing world of Web3 — allowing users to access the Cosmos ecosystem without the usual hurdles.

Additional Features

Tenet is a multi-faceted platform designed to address the shortcomings of existing layer-1s, dismantle typical barriers to entry, and unlock new opportunities for participants in the Web3 landscape.

Besides the primary features outlined prior, TENET Chain and the surrounding Tenet ecosystem also benefit from the following features:

  • Stablecoin Gas: To help make transacting on TENET Chain less complicated, gas can be paid in either $TENET tokens or $LSDC tokens — allowing users to pay the gas cost they see in exact LSDC amounts.
  • 0% Interest Loans: LSD holders are able to take out a 0% interest loan in the form of $LSDC from the TENET protocol smart contract, which can be used to leverage up or trade.
  • Feeless DeFi Primitives: TENET’s feeless DeFi primitives further contribute to a user-friendly experience, helping to minimize the interaction with complex transaction fees for some DeFi use cases — benefiting both users and developers alike.
  • Cross-Chain Interoperability: Users can easily transact across different chains in the Cosmos ecosystem thanks to IBC, and move their assets between independent L1s/L2s via the TENET Bridge. This provides opportunities for powerful cross-chain applications and experiences.
  • High Scalability: Thanks to the highly efficient and secure Byzantine fault-tolerant (BFT) consensus algorithm, TENET chain features high scalability on par with some of the fastest L1 chains — without sacrificing security.
  • Community DAO: $TENET token holders can participate in the Tenet DAO to help govern the platform and related protocols. Unlike most other L1s, Tenet has no VC funding, ensuring the DAO remains controlled by the community rather than early investors.
  • Native gauges: veTENET holders will be able to vote on how newly emitted TENET tokens are distributed within the Tenet ecosystem. It also includes provisions for third-party bribes, helping to maximize rewards for veTENET holders and drive up demand for the $TENET token.

What Is the $TENET Token?

At the heart of Tenet is the $TENET token. This is used for a wide variety of purposes in the Tenet product ecosystem, with its most prominent utility being its use as the platform’s native gas token.

Users can spend $TENET tokens to pay for transactions and smart contract operations on TENET chain. It will also be woven into the apps built on the platform, including Eva, where users will need to pay a small fee in $TENET to perform financial operations.

Some of its additional utilities will include:

  • Access to discounted transactions in the Eva AI wallet
  • Access to LSDC stability pool staking opportunities
  • Participation in network validation
  • Participation in the Tenet DAO for community governance

$TENET token holders will need to participate in a vote-locking system to participate in network governance. This sees them lock their TENET tokens to receive veTENET (vote-escrowed $TENET).

These users can then help decide where value accrues in the Tenet ecosystem — e.g. how block rewards and DeFi protocol incentives are distributed.

What Is the Eva Wallet?

Eva is one of the first applications built on Tenet. It's a Web3 wallet that leverages DeFiGPT to power a range of AI features, such as an up-to-date crypto market chatbot.

The wallet is designed to make interaction with the blockchain landscape as simple as possible, making crypto payments and transactions as intuitive as regular banking. It enables the self-custody of assets and allows users to interact easily with DeFi applications without needing to understand the full details of how the underlying blockchain technology works.

Eva is unusual among AI chatbots in that it will support voice commands, allowing users to directly interface with the cryptocurrency market and explore current events intuitively. The wallet will use a combination of machine learning algorithms to accurately convert voice-to-text commands, which it will then interpret and execute.

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It will include a range of failsafe and security measures to ensure only authorized users can interact with the wallet and sign transactions before they are executed on the chain. By default, Eva is a keyless wallet, further reducing barriers for new users.

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The team behind Tenet hopes that the intuitiveness of the Eva wallet will help more people reduce their reliance on centralized blockchain middleware, like centralized exchanges, custodians and lending platforms.

The Eva wallet was recently released to the public allowing users to begin claiming $TENET and earn tickets — which can be used to unlock access to its upcoming limited public sale.

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