The LSD war is heating up, will Stader be the next potential stock?

特邀专栏作者

2023-03-07 15:30 (UTC+8)

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With its multi-pool architecture and Distributed Validator Technology (DVT), Stader could be a game-changer for liquidity staking.

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With its multi-pool architecture and Distributed Validator Technology (DVT), Stader could be a game-changer for liquidity staking.

Original compilation: 0x11, Foresight News

The LSD wars are heating up rapidly. If you're looking for the next hidden gem💎, I have the biggest Alpha of the year for you. Stader could be a game changer for staking.

In this tweet, I will introduce:

Liquid Staking Challenges
ETHx Design
SD Token Economics

Liquid Staking Challenges

Liquid staking has always been an important area of the Ethereum ecosystem, but it faces some major challenges: centralization 🔴 and scalability ↔️.

centralized

scalability

Due to the high staking threshold of Ethereum, it is difficult for LSD services with unlicensed nodes to meet the needs of ordinary users.

To solve these problems, Stader, a multi-chain liquidity staking protocol, introduces "ETHx", which greatly reduces the threshold for unlicensed node operators, requiring only 4 ETH.

How does it do it? The answer is: multi-pool architecture and distributed validator technology (DVT).

ETHx Design

multi-pool architecture

Whenever a user deposits ETH, the Stader Pools Manager will mint ETHx in return and deploy the deposited ETH to one of the following staking pools:

Permissionless staking pool 🆓
DVT Staking Pool🚚
Permissioned Staking Pool🔒

Permissionless Staking Pools

The permissionless model means that no whitelist is required to run nodes. In this pool, Stader allows nodes to operate with the lowest margin requirement (4 ETH) among peer competitors. But how is this possible?

Working with SSV, Stader simulated extreme operating conditions and concluded that 4 ETH is sufficient to cover all key tail risks, including

Poor validator performance
idle leak
Related cuts

DVT plays an important role in these situations.

Distributed Validator Technology (DVT)

DVT allows the responsibilities of validators to be distributed among multiple nodes. Therefore, even if one of the machines goes offline or fails, validators can continue to operate without interruption.

By taking advantage of DVT's high fault tolerance and reducing the possibility of slashing, Stader reduces the required deposit for permissionless nodes to 4 ETH. (Learn about DVT, pleaserefer to。）

The implementation of DVT can enhance the decentralization and scalability of LSD. Thanks to the lower barrier to entry, more validators can safely join the network.

However, the consequences of the collusion attack and the circumstances under which the cuts actually occurred are unclear.

Permissioned Staking Pool

Token Economics

The ETHx token economic model has two phases.

The first stage

To run a node for Stader, each validator must deposit 4 ETH and SD tokens worth 0.4 ETH as collateral.

Additional staked SD acts as a protection mechanism in case slashing happens, similar to @Rocket_Pool.

SD Incentives

To incentivize node operators, Stader will issue SD tokens worth approximately $1-2 million to validators in the first year.

The number of SD incentives depends on the SD ratio that the node operator pledges every month (each validator can pledge SD tokens worth 8 ETH at most).