The Alliance module and assets
The Alliance module is a new Cosmos SDK-compatible module that allows assets from an established blockchain to be staked on a newer blockchain. In exchange for consensus and fee rewards, stakers from an established chain can provide economic security and growth to a new chain.
The Alliance module can be implemented into any blockchain created using the Cosmos SDK. New chains can utilize the Alliance module by adding it to their codebase before genesis. Existing chains can add the Alliance module to their chain by implementing a software upgrade.
At the heart of the Alliance module is the concept of Alliance assets. An Alliance asset is any asset from an existing chain that is used as a staking asset on another chain. This partnership allows chains to have additional staking assets apart from their native staking asset. Although an Alliance asset can be any asset, they are typically Liquid Staking Derivatives (LSDs) of established chains.
The main purpose of Alliance assets is to boost the economic security of newer chains by utilizing the users and assets of an established chain. When a new chain is created, the native staking asset usually has a low market cap, concentrated among a few individuals. Without substantial initial investment, new chains face the problems of volatility and low exposure that come along with any new asset. Price instability can dissuade new users, causing chains to fail before any substantial usership can be gained.
The Alliance module allows new chains to create Alliances with established chains. In exchange for rewards, users from established chains can stake their assets on a newer chain, mutually benefitting both chains.
There is no limit to the number of Alliance assets a chain can have.