As we wrap up 2021, it’s good to look back at the exciting journey we’ve had this year. We were the first to migrate to non-custodial staking, launched the most capital-efficient pool for staked ETH assets, protected thousands of ETH from a major vulnerability, saved a competing protocol, grew TVL to over 40,000 ETH and expanded the number of engineers working on StakeWise from 1(!) to 4. Suffice to say, it’s been a wild ride!
However, let’s not dwell on our accomplishments. Today, we invite our community to enter a new chapter for StakeWise, together. The time has come for StakeWise to unveil its own decentralized architecture, as well as a range of efficiency & security improvements that fix vulnerabilities that still exist in other staking protocols and position StakeWise to grow much faster than before.
Below, we propose to deploy StakeWise v2, this will:
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Allow external node operators to run validators for the protocol in exchange for a share of staking rewards & MEV
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Enable wallets & other dapps to apply for revenue sharing and referral fee programs as a means to incentivize including StakeWise into their applications
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Support protocol fee distribution to SWISE holders (pending move to DAO vote)
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Implement other major & minor security improvements
Let’s get started!
Motivation
StakeWise’s own infrastructure has performed well throughout 2021, helping the protocol offer one the best staking yields on the market. As the amount of ETH staked with StakeWise grows, it becomes important to reduce the centralization risk associated with StakeWise being the sole node operator in the system.
To address this, the core team has developed Metro – a decentralized architecture that allows external node operators to host StakeWise validators, partake in staking & MEV rewards, and seamlessly follow the protocol to other chains, all based on a single infrastructure package.
Since many of the details related to Metro are outlined in the Medium blog post, we’ll spare you time and post a summary in this proposal:
- New architecture solves known issues with delegated staking, including the risk that a node operator will pre-register a validator with their own withdrawal credentials, or refuse to exit the validators, preventing withdrawal of funds by the DAO.
- External node operators willing to run nodes for the protocol can utilize the easy deployment package. It has been developed & open-sourced by the core team and takes minutes to set up & configure on high availability infrastructure.
- The deployment package allows node operators to switch between different ETH2 and ETH1 clients on the fly, control the configuration of MEV clients used by the node operators, and launch nodes for other networks where StakeWise is offering liquid staking services.
- A new group, called the Validator Committee, will be elected by the DAO to assess the performance & other qualities of the node operators who apply to run nodes for the protocol. The Committee will also be able to force-eject node operators from the network in an adverse scenario (upon DAO approval).
In addition to decentralizing the architecture, StakeWise v2 also enables decentralizing the growth efforts of the protocol. The core team has developed backend and frontend support for any wallet or dapp that wants to integrate our staking service into their applications. The process is simple: apply to the DAO for a revenue sharing or referral program and then integrate our staking service into their applications with a simple widget. The core team is already in the process of reaching out to different wallets in the space, but expects all interested parties to start integrating the widget autonomously once this method of monetizing their user base becomes more widespread.
Finally, StakeWise v2 adds support for protocol fee distribution to SWISE holders. This is something that has been discussed within the community and largely supported. rETH2 distributions will be able to commence following a successful Snapshot (DAO vote).
Specification
Merkle Distributor Contract
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Pause the contract
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Change implementation address to 0x1d873651c38D912c8A7E1eBfB013Aa96bE5AACBC
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Call upgrade function
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Unpause contract
RewardEthToken Contract
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Pause the contract
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Change implementation address to 0x7cA75ccf264b2d9F91D4ABA7639fC7FcC73a7e09
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Call upgrade function
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Unpause contract
Pool Contract
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Pause the contract
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Change implementation address to 0xe68E649862F7036094f1E4eD5d69a738aCDE666f
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Call upgrade function
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Unpause contract
Summary
With a decentralized architecture at its core, StakeWise will grow larger and become more resilient. StakeWise will have additional partners to lean on for the development of its multi-chain strategy and new products, and an increased level of protocol governance.
Snapshot
Leave your vote for this proposal in the SWIP-7 Snapshot: Snapshot
Let’s make it happen, fellow DAO members!
I’d rather just call it a night and go to bed early on NYE 