StaFi Officially Releases ETH2.0 Staking Liquidity Solution
Original title: "StaFi Officially Releases ETH2.0 Staking Liquidity Solution"
Original source: StaFi
ETH staking liquidity dilemma
ETH2.0 Phase 0 will be launched in the near future, users can directly participate in the staking of the beacon chain Among them, you only need to pledge 32 ETH to become a node, and enjoy an annualized staking reward of about 5% to 20%.
But the current design of ETH2.0 is not friendly to users who want to participate in ETH Staking:
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1) Stakers must master a lot of knowledge about running nodes, and then run the validator client in order to obtain pledge benefits. In addition, it is necessary to maintain a stable online time and avoid double-signing and other slash behaviors. Otherwise, it will be punished by ETH 2.0. Not only will it fail to obtain pledge income, but the account balance may also be confiscated from 32ETH to 16ETH. Therefore, for those who simply hope to obtain Staking rewards, the participation threshold is too high;
2) Each node can pledge up to 32 ETH, if you want to pledge more With a large amount of ETH, it is necessary to run multiple validator clients at the same time, which will increase the operating cost and difficulty of operation and maintenance of the node;
3) If the user wants to pledge If the amount is less than 32 ETH, you cannot participate in ETH2.0 Staking.
In addition to the above-mentioned high participation threshold, Stakers will also face the problem of redemption after the pledge is successful: only after waiting for ETH2.0 Phase 2 can the original ETH. It is estimated that it may take 1 to 2 years for ETH2.0 Phase 2 to go online, which means that the assets of Stakers may not be redeemable for circulation within 1 to 2 years. This state is unbearable for most Stakers.
rETH Solution
Overview
How to help Stakers lower the threshold of participation and at the same time solve the liquidity after Staking is an urgent industry problem that needs to be solved. As StaFi, which has been committed to unlocking the liquidity of Staking assets, will also propose a solution to the liquidity dilemma of ETH2.0 Staking: rETH.
Users can deploy on The Staking Contract on ETH participates in ETH2.0 Staking, and the pledged amount will not be restricted by 32ETH. The minimum amount of pledged by users can be 0.01ETH, and there is no upper limit for the maximum. And users only need simple operations to complete the staking process, without running node clients, investing in operation and maintenance costs, and worrying about Slash risks. The Staking Contract contract deployed by StaFi on Ethereum will automatically match the ETH pledged by the user to the best node for Staking based on the historical performance of validators in the "Available" state on the platform.
After the user completes the ETH pledge, the platform will automatically send a rETH Token (ERC 20) to the user, and anchor the user's Staking principal and corresponding Staking through rETH Income, then rETH can be exchanged for ETH on DEX, and can also participate in Lending through lending agreements.
The amount of rETH Token the user gets is determined by the amount of ETH Qs the user plans to pledge and the rETH exchange rate Ci at that time:
The rETH exchange rate Ci increases with the increase of pledge income, which is mainly composed of the total amount of ETH locked in the Staking Contract Qstk, the total amount of redeemed ETH Qred, and the amount of Staking rewards Qrew, Slash quantity Qslh, Penalty quantity Qpey, Commission commission ratio Rcom, and the total quantity M of rETH issued, the total quantity N of rETH destroyed, the calculation formula is as follows:
Technical Architecture
StaFi will Deploy the Staking Contract on the Ethereum PoW chain, and realize the interaction with the Deposit Contract on the ETH PoW chain, and monitor the Staking information of the ETH 2.0 Beacon Chain. For the specific interaction logic, see the contract interaction sequence diagram below.
Figure 1: rETH contract interaction sequence diagram-client
Figure 2: rETH Contract Interaction Sequence Diagram-Verifier Side
The entire back-end architecture of rETH will Divided into 3 layers:
1) The top layer is user fund management and settlement. Users participate in Staking through the Staking Contract deployed by StaFi on Ethereum, and according to the amount of ETH deposited by the user and the current exchange rate of rETH, a corresponding amount of rETH is issued to the user. At the same time, it is responsible for the clearing and settlement of funds deposited and redeemed at the client end.
2) The middle layer is the allocation and settlement of Staking funds. StaFi will deploy a corresponding number of Staking Pools based on the funds in the current Staking Contract. Each Staking Pool will deposit 32 ETH, and after matching validators, deposit it into the Deposit contract of ETH to formally participate in the Staking of ETH 2.0.
3) The bottom layer is the management and monitoring of ETH 2.0 nodes (Original Validators). StaFi will provide Original Validators with a set of standardized Onboarding management tools. Nodes can use this tool to complete the operation of the ETH 2.0 client. At the same time, this tool will also monitor the events of the ETH2.0 beacon chain in real time, and for each Staking Pool contract. Real-time statistics of node operation, especially staking revenue distribution, disconnection time and times, Slash occurred, validator exit and other events.
Fund Safety
StaFi always puts the safety of users' funds as the primary consideration, that is, on the premise of ensuring that rETH Token is Fungible, how to ensure the safety of users' funds to the greatest extent is what the StaFi team has been thinking about. The core of user fund security lies in how to use decentralized management methods to achieve fund security in the Staking Contract.
We plan to use the following methods to comprehensively ensure the safety of users' funds:
1 ) Contract key management will be comprehensively managed by the StaFi Special Validator (SSV) on the StaFi chain using multi-party secure computing (MPC) and multi-signature. StaFi will use the MPC scheme to form 21 small fragments of the private key of the Staking Contract Pool, which will be distributed to 21 validators in the SSV Group on the StaFi chain. Only 16 of the 21 SSVs can fully recover the key, thereby controlling the operation authority of the Staking Contract deployed on ETH. Regarding how to select and rotate SSVs on the StaFi chain, you can check the detailed rules on the StaFi official website.
2) Under the management method based on MPC and multi-signature, the Staking Contract is no longer controlled by one or more people in the project team, but by StaFi Controlled by an unspecified group of SSV validators on the chain. Although under this mechanism, the security of Staking Contract can be greatly improved, but we also need to consider the possibility of SSV joint evil in extreme cases. According to the rules, every 1Era (6 hours), 21 SSVs will be rotated sequentially. At the same time, SSV verifiers need to pledge a certain amount of FIS tokens (StaFi’s main network tokens) in StaFi’s Insurance Pool, so that 21 The overall pledge value of SSV is greater than the value of ETH assets in the Staking Contract Pool. Once the extreme situation of joint evil occurs, we will punish the SSV deposit and use it to repay user assets.
3) Before the contract is finally launched, StaFi will comprehensively ensure the security of the contract through internal testing, external Bug Bounty incentives, and contract security audits.
Casting and Redemption
When a user participates in Staking, StaFi will automatically give the user Mint the corresponding amount of rETH, and will not charge any Mint fees.
Since ETH2.0 only supports operations such as transfer and redemption before and after ETH2.0 Phase 2 goes online, StaFi ETH Staking Contract is only available on ETH2. After Phase 2 goes online, users are supported to redeem ETH. StaFi will track the latest developments of ETH 2.0 in real time, and open the redemption function in time according to the progress.
Staking Reward
In the ETH2.0 network, according to the official documents disclosed by the ETH Foundation, after the Beacon Chain is launched and the Staking function is enabled, users participating in ETH Staking cannot directly claim the pledged income, and the Beacon Chain can only be used every once in a while. BETH will be issued in about 6.5 minutes as a Staking reward. However, since BETH cannot be transferred and redeemed, StaFi cannot support users to claim pledge income.
Slash Question
When participating in ETH2.0 staking, the Slash problem is unavoidable. That is, the node is punished by Slash due to reasons such as being offline or doing evil, and thus the amount of staked ETH is deducted.
Based on the Slash problem, StaFi has designed a set of solutions to ensure that Staker users' principal will not be affected first:
1) Original Validators who join the rETH plan will be required to pay a certain amount of ETH as a deposit. Once a Slash occurs, the loss suffered by the Staker will be deducted from the original deposit, which will not affect Staking The user's assets;
2) Staking Contract will give priority to high-quality Original Validators who have not had Slash in history;
3) Staking funds will be distributed among multiple Original Validators, avoiding the Slash situation of a single Original Validator. Therefore, even if there is a very low probability that a certain Original Validator has a Slash situation, it will not have a major impact on the principal of the Stakers.
Original Validators
Introduction
Original Validators refer to the ETH 2.0 validators who joined the StaFi ETH2.0 Staking Contract program. The node operator of ETH2.0 can become an Original Validator after completing registration and paying a deposit through the StaFi validator Onboard tool. In order to avoid the threat of staking funds in StaFi Staking Contract (SSC) to the verification security of the original chain, StaFi will not become a validator on ETH2.0, that is, the funds deposited by users in SSC will only be distributed to Original Validators.
Margin
So the total deposit Pi that a certain node operator needs to pay is determined by the N value defined in the current network and the total number of running nodes Mv:
The specific value of the N value depends on the operation of the ETH2.0 network and node operation Factors such as business history, Performance, and number of nodes are comprehensively determined. Considering the rules of ETH 2.0 Slash, the N value will be between 4ETH and 16ETH, that is, the minimum value cannot be lower than 4ETH, but the maximum value will not exceed 16 ETH.
At the same time, StaFi will establish an intelligent scoring system to quantify the performance of each Original Validator, and each time the funds are allocated, it will be automatically calculated according to the smart contract The high and low scores of the nodes are allocated in the Original Validator, the nodes with high scores will be allocated first, and the nodes with low scores will be allocated later. The score will change and adjust in real time over time.
The main latitude of scoring is:
1) Node operator background
< p>2) The time when the node went offline3) Historical Slash situation
4) The number of pledged FIS tokens
Liquidity Scheme
Because the ETH2.0 redemption function needs to wait until Phase 2 goes online, the validator will not be able to collect Commission for a long period of time to make up for operating costs. In order to motivate validators to join the StaFi rETH solution, we will support Original Validators to apply for liquidity from the official StaFi.
Assuming node operator Bob, the number of running nodes is X, and the amount of ETH pledged by each node is N. Since Bob lacks liquidity funds in the short term, then At this time, Bob can choose to sell the pledged ETH to StaFi, and StaFi can pay Bob the corresponding amount of FIS tokens according to the FIS/ETH exchange rate at that time, which can be FIS of ERC 20 or FIS of StaFi main network . Bob can choose to sell FIS tokens to obtain liquidity.
The maximum amount S of ETH that Bob can sell is equal to:
Features of rETH
1) The exchange rate will continue to increase according to the generation of Staking Reward;
2) The user will calculate the amount of rETH obtained based on the rETH exchange rate at the time of Staking;
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3) Before the redemption of ETH 2.0 is open, rETH will not be redeemable, but it has always anchored the corresponding amount of ETH principal and pledge income, and the StaFi chain and multi-signature contracts will ensure the safety of funds on the chain
5) rETH can be circulated in DEX and lending agreements on ETH, and can also be circulated in Polkdot or Cosmos' DeFi ecology through StaFi's cross-chain service.
value of rETH
Through rETH, StaFi solves the following problems for users:
1) No need to worry about the liquidity of Staking assets, you can trade rETH to get liquidity at any time
2) Instead of waiting for a long redemption period as in the past, you can immediately exchange according to the rETH/ETH exchange rate to obtain the corresponding ETH assets;
3) Avoid The handling fee for applying to release Staking is reduced, transaction costs are reduced, and asset transaction efficiency is improved.
4) The threshold for users to participate in Staking is lowered, and it is simple to Stake with one click.
Through rETH, StaFi solves the following problems for the ETH2.0 Staking mechanism:
1 ) Due to the extreme lack of liquidity of ETH Staking assets, it will greatly reduce the willingness of ordinary users to participate in Staking. Through the rETH solution, users will greatly increase their willingness to staking, thereby increasing the pledge rate of ETH Staking;
2) Since the funds of the StaFi Staking Contract are dispersed among the original validators, StaFi will not become the validator of the original chain, so no matter how much funds are locked in the StaFi Staking Contract, it will not affect the security of the original chain threaten.
3) Since StaFi does not participate in the verifier of the original chain, it has a cooperative relationship with the verifier on the original chain and will not harm its interests.
Secondary Market Circulation of rETH
StaFi will create rich, multi-level, and multiple circulation scenarios on multiple public chains for rETH holders:
1 ) When the rETH product is launched, StaFi will establish rETH/ETH trading pairs on DEX such as Uniswap and Balancer, and issue FIS token rewards to liquidity providers of rETH/ETH trading pairs.
2) StaFi has reached cooperation with a number of centralized exchanges on the circulation of rETH to help rETH holders circulate through centralized exchanges.
3) StaFi will not only support the transfer of rETH in the ETH ecosystem, but also allow rETH to participate in the DeFi of the Polkdot and Cosmos ecosystem through cross-chain bridge services.
4) In addition to trading in CEX and DEX, rETH will also deposit coins to generate interest or mortgage loans on the lending agreement platform that cooperates with StaFi without losing Staking income.
Income Distribution Plan
In the future, the income of rETH solutions will be distributed according to the following rules:
1) 70% will be used to give back to FIS token holders, in the form of repurchase, destruction or dividends ;
2) 20% will be deposited into the StaFi Treasury treasury to support the further development and marketing of the project;
3) 10% will be allocated to the team.
FIS token and rETH
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In the rETH solution, the value capture scenarios of the StaFi main network currency FIS are listed as follows:
1) ETH locked in the Staking Contract Assets will become the value support of FIS tokens, especially the FIS tokens pledged by SSV need to be higher than the value of ETH in the Pool it maintains.
2) 70% of the revenue in the rETH solution will be given back to FIS token holders.
3) rETH will enter the Polkdot and Cosmos ecology through cross-chain bridges in the future, and the bridge service income generated will also be returned to FIS token holders.
4) Original Validators can pledge FIS tokens to increase the amount of security deposit, so as to further obtain the qualification for priority allocation of funds.
StaFi Chain and rETH
rETH is one of StaFi's solutions for ETH2.0 Staking liquidity, and we will also launch rFIS, rDOT, rKSM, rATOM and other rToken solutions. In rETH's design scheme, user staking-related contracts are mainly deployed on Ethereum, but the solution for user fund security, especially key management, will be implemented by validators on the StaFi chain using MPC and multi-signature.
Not only that, in the future rETH can also enter the Polkdot ecology, Cosmos ecology, etc. through StaFi's bridge service, and participate in its ecological DeFi applications.
The vision of StaFi is to use the rToken solution to realize the recirculation of all Staking assets and realize the cross-chain interoperability of rToken. And rETH is an important part of the entire ecosystem of rToken.
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