the I₿C wallet

lots of confusion/misinformation about the north korean LSM on the hub. let me, the south korean, clarify things a bit let's dig in 👇 what's the vulnerability? aib says a lot of things, but the only key thing that really matters is the claim is that LSM provides the ability for "stakers to evade slashing by tokenizing their delegations" some background knowledge for a more in-depth understanding, refer to this amazing (and ancient) blogpost by @chjango blog.cosmos.network/consensu… basically, the premise of proof-of-stake is that it is secure because there is accountability of the stakeholders. accountability is enforced by slashing. can an attacker evade slashing with the LSM? theoretically, yes. how would such an attack be carried out? Alice wants to attack the hub ➡️ acquire/create a cartel of significant voting power ➡️ propose a dishonest chain ➡️ insta-convert the staked ATOM to LST ATOM via LSM ➡️ gets to control the chain without being exposed to slashing if slashing existed, Alice would be slashed for such behavior as unbonding period would mean that Alice doesn't have full custody of her ATOMS. LSM allows Alice to bypass it. is this by design? this part may be controversial, but my take is that it is. the act of buying an liquid staked ATOM token is essentially purchasing ATOM at a lower price for taking on the slashing risk + price volatility for the length of the unbonding period. in a rational market, the price of stATOM will always trade at a negative premium to the price of spot liquid ATOM (+ staking reward for 21 days). how do you prevent this? theoretically, if you had a separate LST for each validator (i.e. stKeplrATOM, stCoinbaseCustodyATOM, stCosmostationATOM) would create a way for the market to price in attack/slashing risk. if you remembered the liquid staking discussions circa 2018-2019, there were also 'delegation vouchers' which directly correlates the staking position to a nonfungible voucher. that being said, the UX of this would probably be dogshit. imagine having 150 LST tokens for ATOM or having a pure non-fungible LST NFTs. my take is that this was a tradeoff decision. is this unique to cosmos hub? no. all liquid staking tokens for chains that have slashing essentially carries the same risk.