Exploring the PICASSO Network: Restaking Project on Solana

This study provides an in-depth analysis of the current status of PICASSO, particularly its integration with other ecosystems such as Ethereum and Solana.

Author: Greythorn

Project Name: Picasso Network

Project Type: Cross-chain, Restaking

Ticker: $PICA (Native Cross-chain Token)

Cryptocurrency Ranking: #489

Market Cap: $67 million

Fully Diluted Valuation: $149 million

Circulating Supply: 4.53 billion (45.34%)

Total Supply: 10 billion

Project Overview:

In recent technological advancements and collaborations in the blockchain space, the Picasso Network has emerged as a key player in cross-chain communication. Initially launched in the Kusama ecosystem, Picasso’s mission is to facilitate interoperability across ecosystems and establish a robust infrastructure within the Polkadot network. Concurrently, the development of Composable Cosmos aims to enhance the capability of cross-chain asset transfers, breaking the limitations of a single ecosystem.

Composable Cosmos takes a significant step in simplifying the process of establishing IBC connections with Cosmos chains. In the past, this task was not only complex but also time-consuming. Composable Cosmos now acts as a bridge, allowing Cosmos chains to quickly join cross-ecosystem IBC activities without the need for any upgrades or modifications.

Designed to be compatible with any Cosmos chain using the Tendermint consensus mechanism and enabled with IBC, this chain integrates with Picasso and Ethereum, making it a central hub for IBC activities. It focuses on governance rather than user-facing operations, utilizing Picasso’s native token PICA instead of a separate token.

In the Composable Cosmos ecosystem, a notable feature is its validator set, capped at 100. The Composable Foundation plays a crucial role, representing Picasso for PICA token staking and managing validator rewards. In this framework, Picasso leverages its native token PICA to establish a growth foundation covering the Picasso parallel chain on Kusama and the Composable Cosmos chain on Cosmos.

This study provides an in-depth analysis of the current status of the project, particularly its integration with other ecosystems such as Ethereum and Solana. Special attention is given to the restaking functionality launched on Solana through the Picasso-Solana IBC connection. This development is a key step for Picasso to strengthen its cross-chain interactions and broaden the application scope of PICA in the blockchain space. Recently, Picasso announced the launch of restaking services for SOL on January 28th.

Inter-Chain Communication Protocol (IBC) connection between Picasso and Solana

At the last Solana Breakpoint conference, the presentation of the Composable Foundation and the University of Lisbon marked significant progress in their technical cooperation. Highlights of the presentation include:

● Solana and IBC integration: Thanks to the support of Picasso, Solana is now able to join many ecosystems including Polkadot, Kusama, Cosmos, and soon Ethereum, forming an extensive cross-ecosystem IBC network.

● Enabling new applications: Newly released features enable new opportunities for utility and participation across different blockchain networks, allowing innovative applications such as re-staking to be implemented in connected ecosystems.

● Smooth liquidity exchange: This integration is expected to seamlessly connect Solana’s huge user base and liquidity with other chains in the IBC network.

The series of integration measures by the Picasso Network not only reflects its pursuit of innovative technology but also deepens its influence in the field of cross-chain interoperability of digital assets, bringing new growth opportunities to decentralized financial services in the blockchain sector.

Technical Aspects:

Custom Blockchain Solutions: At the forefront of blockchain technology, the Picasso Network is overcoming various technical challenges faced by blockchains such as NEAR, Solana, and TRON through its cutting-edge custom blockchain solutions. These chains originally did not naturally conform to IBC standards, such as the ICS-23 specification. The solution has been directly deployed on Solana, introducing a verifiable storage mechanism, paving the way for IBC-based interactions and achieving trust-minimized bridging between chains that were not naturally compatible with IBC.

Validator Participation Mechanism: In terms of validator participation, Picasso adopts an innovative mechanism where entities aspiring to become validators on the client blockchain must participate in the staking process with a regulatory client contract. Upon successful staking, participants can join the candidate validator pool. With each epoch turnover, the contract will select new validators from this pool, prioritizing those with the highest staked amounts.

Picasso introduces Solana’s on-chain restaking

Picasso also introduces the concept of restaking, a mechanism originally developed by EigenLayer for Ethereum ETH, into the Solana ecosystem. Re-hypothecation allows other financial activities to be performed while maintaining the pledged status of assets. This approach has gained widespread adoption in Ethereum and shows great scaling potential in networks with mature staking culture such as Solana.

In the Solana space, Picasso is driving the restaking of SOL and receipt tokens from various SOL staking platforms. Through the integration with Solana-IBC bridged validators, this strategy heralds a new chapter in blockchain integration. Users can deposit assets into staking contracts through the trustless.zone platform, and these assets will be allocated to validators built on a custom client blockchain designed to bridge the gap between IBC and Solana. This innovative restaking approach supports the PoS consensus mechanism of the client blockchain and enhances the security of the Solana-IBC connection.

Picasso is expanding its Solana-IBC validator portfolio to include assets such as SOL, Marinade Finance’s mSOL, Lito’s jitoSOL, Orca LP tokens, and Solblaze’s bSOL. This represents a significant expansion of staking options offered to users. The Solana > IBC initiative of the network is undergoing rigorous third-party security audits to ensure the robustness and security of its system. Upon completion of the audit, the results will be publicly released, providing necessary transparency and assurance.

Tokenomics

Market cap: $67.56 million

Fully diluted valuation: $149 million

Circulating supply: 4.53 billion (45.34%)

Total supply: 10 billion

Token distribution:

Crowdloan: Total 30% (18.1% unlocked, 11.9% locked)

Details: 50% of the initial token generation event (TGE) tokens are released at the Token Generation Event, and the remaining portion unlocks over the next 48 weeks. The entire balance is available for governance, and any unclaimed tokens are allocated to the treasury after a 3-month period.

Treasury: 18% in total (-/-)

Details: Funded by 75% of network fees, initially managed by the General Council and later by PICA holders.

Liquidity Mining: 15% in total (-/-)

Details: As a reward for participating in the liquidity program.

Team: 13.7% in total (fully locked)

Details: Allocated over two years with an initial six-month lock-up period.

Ecosystem: 10% in total (-/-)

Details: Rewards for network activities, such as operating an oracle.

Series A Funding (Series A): 7% in total (fully locked)

Details: Three-month lock-up period, with a two-year gradual vesting schedule.

Partners & Advisors: 6.35% in total (fully locked)

Details: Allocated over two years, including a six-month lock-up period.

Allocation Schedule

Source: Cryptorank.io

During the period from January to December 2024, the PICA tokens will undergo a series of unlocking events, impacting its total supply and market value. This pattern includes:

1. Regular Crowdsale Unlocking: Almost every week, approximately 31.26 million tokens (about 0.31% of the total supply) will be unlocked. These ongoing releases aim to support crowdsale participants.

2. Larger Scale Unlocking in Significant Rounds: At several key moments throughout the year, significantly larger-scale unlockings will occur, releasing 108 million tokens each time (approximately 1.08% of the total supply). These tokens will be allocated to different stakeholders:

-Team: Partial allocation for the team, reflecting their ongoing contributions to the project.

-Series A Investors: Unlocking of Series A investors’ investments, indicating their early support for the project.

-Partners and Advisors: This group, crucial for providing strategic guidance and building partnerships, will also receive a portion of the tokens.

Token usage cases

The PICA token plays a key role in the Picasso and Composable Cosmos ecosystem, covering multiple aspects of functionality:

1. Staking shards on Picasso: 25% of Picasso’s handling fees will be used to reward shard producers for block production, and the remainder will flow into the community governance reserve.

2. Oracle staking through Apollo: By staking PICA tokens, users can run Oracle nodes, thereby improving the security of network data.

3. Composable Cosmos Staking: PICA tokens are used to maintain the security of the Composable Cosmos chain, marking its dual utility in the Kusama and Cosmos ecosystems. The network requires 1 billion PICA tokens for validator staking to provide network security and earn an annualized return of approximately 10%.

4. Polkadot Liquidity Staking: Composable has introduced Liquid Staked DOT (LSDOT) to generate revenue for PICA token holders through liquidity staking fees.

5. Gas Token in Picasso Ecosystem: PICA token is used to facilitate transactions and dApp operations, with fees dynamically adjusted based on network load.

6. Main trading pair on Pablo DEX: The PICA token is one of the main trading pairs on Pablo DEX to incentivize the provision of liquidity.

7. Governance: The PICA token plays an important role in the governance of Picasso and Composable Cosmos, supporting decentralized decision-making.

Funding status:

1. Seed round (July 2021): Composable’s seed round was successfully completed, raising $7 million, marking an important initial stage of their financial journey.

2. Series A (March 2022): This round of financing takes an important step forward, raising a total of more than $32 million. The strong lineup of investors includes Coinbase Ventures, Blockchain Capital, Figment Capital, Fundamental Labs, GSR, Jump Capital, New Form Capital, NGC Ventures and Krypto Ventures, etc., reflecting their firm confidence in the project.

Additionally, Composable recently entered into partnerships with two strategic partners to enhance its capabilities and facilitate growth across the ecosystem: DAO5 and Santiago Santos.

About DAO5: DAO5 is a developing cryptocurrency fund moving towards a DAO structure designed to co-manage assets by portfolio founders. The fund is led by key leaders in the crypto space such as Tekin Salimi and is supported by several advisors, details of which can be found on their website.

About Santiago Santos: Santiago R. Santos is a distinguished expert in finance and crypto, known for his significant contributions to investment firms and his significant influence in the crypto space. He co-hosts “The Empire Podcast” with Blockworks’ Jason Yanowitz “, providing key insights into industry trends.

Statistical data:

As of January 23, 2024:

From a quick review of the statistics, we can clearly see that, while not outstanding, the network is highly active, processing an average of over 500 transactions per day, with an average transfer amount of $1.7k. It will be interesting to watch as these metrics may change with integrations with Solana and Ethereum.

Current integrations:

Picasso has successfully achieved interoperability with the following ecosystems, enabling seamless data transfer, asset movement, and smart contract interaction between Picasso and these ecosystems. Here are the sources of relevant ecosystems:

Source: Picasso Asset List

Bullish fundamentals:

1. As Solana integrates with Polkadot, Cosmos, Kusama and Ethereum via IBC, these connections are expected to enhance the value for holders of the $PICA token, positioning PICA as the core of the growing cross-chain landscape.

2. Strong partnerships and successful financing rounds, including a $7 million seed round and a $32 million Series A round, reflect investors’ strong confidence in the project and the support of the strategic network.

3. The multi-faceted role of PICA tokens in the ecosystem in terms of staking, governance and liquidity enhances its intrinsic value and appeal.

4. The team continues to work hard to explore new features, especially in the areas of interoperability and trustless DeFi, demonstrating its commitment to evolving and adapting to the needs of the blockchain industry.

Bearish fundamentals:

1. The practicality and technical complexity of the project may be too complex for new and casual users, potentially resulting in reduced participation. This risk may increase if competitors introduce similar but easier-to-use features. Although there are currently no related re-staking projects for SOL, this market may soon attract competitors.

2. Mismanagement of the unclaimed $PICA tokens by crowdsale participants is primarily due to insufficient communication about the claiming deadlines, leading to dissatisfaction among contributors. The Picasso OpenGov forum community is advocating for the reversal of the decision to allocate these tokens to the treasury, a crucial issue influencing the project’s community relations stance.

1. CEO Omar Zaki’s past disputes with the U.S. SEC and associations with controversial projects like Bribe Protocol have posed reputation challenges. This issue is significant enough to result in the departure of some key team members, including former CTO Karel Kebab.

2. Large-scale token unlocks are expected to exert significant downward pressure on the market.

Disclaimer：

1. This article is reprinted from [Aicoin]. All copyrights belong to the original author [Greythorn]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
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