Stader Labs’ ETHxSponsored
A liquid staking token designed to keep Ethereum decentralized while maximizing rewards.
By: Stader Labs • Loading...Sponsored
Stader is a multi-chain, non-custodial liquid staking solutions, currently live on seven PoS blockchains, including Ethereum, Polygon, BNB, Fantom, NEAR, Hedera and Terra 2.0. With over $120 Mn in TVL across chains, Stader is trusted by 70K+ wallets and a community of 150K+ members.
Stader’s mission is to unlock a passive income opportunity for 1Bn+ people through staking and DeFi. They aim to achieve this by simplifying staking & offering the best yield opportunities with their liquid staking solution across multiple blockchains.
ETHx (following Stader’s convention of an x-for-suffix for liquid tokens) is the liquid staking token for staked Ethereum offered by Stader. ETHx aims to provide Stakers with a decentralized and scalable solution with diverse DeFi integrations.
Ethereum’s LST paradox and current state of staking
Today, Liquid Staking Tokens (LSTs) are the preferred way to stake on Ethereum with a ∼37%+ share of all staked ETH. Followed by CEXs (∼20%+ of all staked ETH) as the next preferred option.
The aim of liquid staking is to ignite a more decentralized and capital-efficient network. However, the current ETH LST and staking market is heavily centralized in general. One LST player alone holds more than 74% of all liquid staked assets on Ethereum, while the top 3 largest staking protocols together control over 93% of all LST market share on Ethereum.
Moreover, these LST protocols rely exclusively on permissioned node operators whitelisted by themselves or impose a relatively higher bonding requirement, which is inaccessible for a significant portion of permissionless node operators wishing to join.
On the other hand, LST protocols that work with permissionless node operations struggle to keep up with user demand or have had limited DeFi integrations in the past, reducing their utility to some users.
Introducing ETHx: The next-gen LST on Ethereum
ETHx is Stader’s new Liquid Staking Token on Ethereum designed to revolutionize the LST ecosystem on Ethereum.
ETHx tackles Ethereum’s current staking challenges and delivers the best staking rewards for both, ETH users and node operators. All while helping decentralize the Ethereum network and expand your DeFi opportunities.
Their efforts led them to an innovative ETHx design based on a unique multi-pool architecture, bringing this vision to life.
Stader’s 4 ETH bond: A catalyst for decentralization
With ETHx, Stader is bringing the lowest capital requirement for permissionless node operations in the Ethereum network. An ETHx node operator needs only 4 ETH + 0.4 ETH worth of SD as bond requirement to spin a validator.
This is 85% lower capital vs solo staking (32 ETH) and 50% lower to existing decentralized solutions (16 ETH).
Stader’s choice to set 4 ETH as the bond requirement was simulation-proven to be an effective protection for user’s funds, a strong incentive for independent/home node operators to join and a decentralization stimulus for Ethereum staking.
- Safety for users
4 ETH bond protects staker’s funds from key tail risks such as inactivity leak of 7 days, isolated and non-isolated slashing events. From poor validator performance to extreme network conditions, your funds are safe. 4 ETH bond protects your funds from MEV theft too,acting as an effective mitigation mechanism against it. Source: https://www.staderlabs.com/blogs/4-eth-bond-a-detailed-risk-analysis/
- Profitable for node operators
4 ETH bond requires 85% lower capital to spin up an ETH node vs solo staking.. This gives node operators 35% higher rewards vs solo staking powered by 8x leverage. Moreover, the chance to expand their rewards by increasing their SD collateral.
- Decentralization for ETH
4 ETH bond lowers the capital entry barrier, making node operations more accessible for independent/home node operators. Bringing more Permissionless Operators help secure and decentralize Ethereum. 4 ETH also helps diversify Ethereum’s LST ecosystem and ensures a broader and healthier distribution of stake, reducing single points of failure.
Multi-pool architecture: An all-inclusive solution for Ethereum staking needs
ETHx has a multi-pool architecture for the node operator layer. This is critical to ensure that the node operations for ETHx can be decentralized, scalable and resilient.
There are three different node operator pools:
- Permissionless node operators: Independent stakers/Homestakers will be the backbone of ETHx. They’ll operate permissionlessly and without any whitelisting. Stader has reduced the bonding requirements to 4 ETH to enable more home stakers to join.
- Permissioned stake pool: ETHx will have a set of curated, community-approved list of permissioned operators. These are reputed entities of consistently high performance. They’ll complement permissionless nodes’ capacity and help ETHx to be seamlessly scalable.
- DVT (Distributed Validator Technology) stake pool: Stader will become an early adopter of DVT-based pools. It will distribute validator duties among multiple nodes by leveraging threshold cryptography. Its high fault tolerance will reduce slashing odds. Stader is currently in the testnet phase with its DVT partners SSV and Obol.
ETHx unique multi-pool architecture will help Ethereum to:
- Drive decentralization with Permissionless NOs
- Scale the demand with Permissioned Operators
- Grow its resilience with DVT
All while Ethereum gets more decentralized and satisfies user demands.
Full-fledged DeFi: The DeFi powerhouse on Ethereum
Unlike other LST platforms that typically confine themselves to a single network, Stader has achieved a deep multi-chain experience and DeFi expertise.
Since their launch in 2021, Stader has been among the top 3 players across its 6 PoS blockchains, including EVM chains such as Polygon, BNB & Fantom
With 70k+ users and $100Mn+ in TVL, they’re thrilled to expand their experience into Ethereum. Stader’s LSTs have successfully integrated with 40+ DeFi partners across chains, including:
- AAVE, The largest decentralized crypto lending platform
- Balancer, Ethereum-based DEX and AMM
- QiDAO, Decentralized lending stablecoin protocol
- Quickswap, Layer-2 DEX and AMM
- Apeswap, Multichain DeFi Hub, AMM and DEX
- BeethovenX, Fantom-based DEX and AMM
This expertise will be leveraged for ETHx, powering up its utility to the fullest.
Why should you stake with Stader?
With ETHx, Stader has pledged to keep Ethereum decentralized by building a liquid staking solution that is accessible, reliable and rewarding.
By focusing on these three pillars, Stader aims to empower the Ethereum community and help secure the network further.
They seek to undertake this through the following.
Pledge for Decentralization
As mentioned earlier, Ethereum needs a decentralized staking ecosystem that ensures a broader and healthier distribution of stake, reducing single points of failure.
Stader commits to stand for a diverse and strong network of nodes that improves Ethereum’s resilience to disruptions, enhancing its stability, scalability and security.
They wish to commit to enabling a decentralized staking network on Ethereum, starting with:
Self-limiting to 22% of staked ETH
In order to promote a fair and balanced distribution of power amongst Ethereum staking solutions, Stader team has committed to a self-limitation of 22% of all staked ETH for ETHx.
Commitment to being accessible
To ensure that staking becomes an easy way for users to earn passive rewards, Stader will undertake the following initiatives:
Accessibility for users
- ETHx Staking Academy:
Live and recorded workshops to facilitate comprehensive learning across themes, from creating a wallet to staking. This will be complemented with multilingual DeFi Playbooks, allowing stakers worldwide to unlock these opportunities.
- ETHx Evangelists:
Stader recognizes members who contribute to the ETHx staking community. This will include programs such as the “ETHx Content Grant” for community educators and content creators.
Accessibility for node operators
- 4 ETH bond: Stader has brought the lowest capital requirement of 4 ETH and 0.4 ETH worth of SD as collateral, lowering barriers to entry like never before.
- Affordable infrastructure: The cost of running a node can be overwhelming. Stader has partnered with players such as Allnodes (starts at $5/month per validator) and Avado ($100 in $SD rewards per validator with opportunity for free hardware) to bring the most cost-effective infra for ETHx. Additionally, the ‘ETHx Node School’ will facilitate onboarding of aspiring node operators via live workshops and multilingual guides/FAQs.
Commitment to being reliable
ETHx smart contracts are triple-audited by leading blockchain security firms. These audits, conducted by industry-leading experts, thoroughly evaluate the protocol’s security and functionality.
Smart contract audits:
Additionally, there are extra security measures in place:
- $1M Immunefi bug bounty: Attractive incentives offered to reward bug reports and vulnerability discoveries
- Forta on-chain monitoring: Real-time monitoring with Forta to detect threats and anomalies for ETHx will be live soon.
Commitment to being Rewarding
Stader believes that being active members of the Ethereum network should be rewarding for both node operators and users. To encourage participation and reward their community, they have designed and implemented several programs.
$1M+ launch incentives for early stakers
As a gesture of appreciation to the community, Stader has unlocked special rewards for early stakers. There are over $1M in launch incentives available for you to claim.
- 1.5x staking boost: From day 1 (July 10), early stakers will receive a 1.5x boost in rewards throughout the launch month. Additionally, you'll earn staking rewards (CL + EL rewards) without having to wait for the ~45 day activation queue!
- Upto $800k in LP rewards: To boost the utility of ETHx, Stader has earmarked $800k in incentives across DeFi protocols for Q1. As an early liquidity provider, you’ll enjoy a significant reward boost over and above your staking returns.
- DAO rewards: Community is a big part of why we do what we do. That’s why we’ve set aside exclusive rewards for members of DAOs and communities. We’re excited to start this initiative with our partner DAOs, Dewhales and Uniwhales, at launch. If you are a DAO or Community, get in touch to explore how we can keep Ethereum decentralized while letting members maximize rewards.
Built for DeFi, built for rewards
Stader plans to leverage its DeFi expertise to power up ETHx to its fullest potential and unlock exciting DeFi strategies perfectly tailored for you. Depending on your preference, you could explore varied strategies to boost your gains on top of your staking rewards, such as:
- LP farming: Adding liquidity to ETHx liquidity pools across DEXes and farming LP rewards
- Leverage staking: Multiply your staking yield by borrowing a price-correlated asset (reducing risk of liquidation)
- Delta-neutral strategy: Explore better yield with stablecoins, earn delta-neutral gains and help secure the Ethereum network
- Stablecoin minting: Leverage ETHx to mint stable coins and then further deploy stable coins across DeFi to maximize returns
ETHx DeFi rewards are live on leading DEXes like Balancer and LSTfi protocols such as Pendle. On Balancer, the ETHx / Boosted Aave V3 WETH Pool allows you to unlock the power of staked ETH and Aave lending markets all at once. With Pendle, the Aura ETHx / bb-a-WETH Pool gets you $SD, $BAL, $AURA and $PENDLE rewards. ETHx pools on Uniswap, Aave, etc. are set to follow suit soon.
Stader has also partnered with OKX Wallet for ETHx. One can get 8% rewards if they stake through their OKX Web3 Wallet.
The Golden Era of LSTs
Since the successful transition of Ethereum to PoS and the enablement of staked ETH withdrawals post the Shapella upgrade, the LST ecosystem has witnessed tremendous expansion. The market share of Liquid staking has consistently increased.
Over 8.7M $ETH are currently staked via LSTs, holding a 37% market share (the leading source of staked $ETH).
LSTs are a $19B market ready to exploit. The largest protocol category by TVL in the entire crypto space. It's worth mentioning that the ratio of staked ETH tokens is approximately 16% of its circulating supply. In contrast, the average staked ratio for the other top 10 PoS chains stands at ∼50%.
LSTfi revolution in DeFi
The LSTfi narrative has taken the crypto ecosystem by storm. It's leading the entire LST ecosystem into massive adoption and the growth potential is beyond compare. LSTfi TVL has been skyrocketing.
LSTfi protocols have over US$688M in TVL. ~250% boost in just 2 months. The growth has been exponential since mid-May and it doesn't seem to be stopping anytime soon.
Moreover, today’s LSTs TVL is US$19.4B. LSTfi has only reached ~3.5% of the total LST market cap. This potential has led the market into adopting the LSTfi narrative and the possibilities are rapidly expanding.
- CDP Stablecoins: Protocols allowing users to mint stablecoins using LSTs as collateral.
- Index LSTs: Protocols that issue tokens representing a basket of LSTs.
- Yield Strategies: Protocols that enable users to access additional yield opportunities.
- Money Market: Protocols that enable lending and borrowing using LSTs.
With the versatility of ETHx and Stader's DeFi expertise, you can seamlessly navigate through innovative and superior LSTfi protocols. Take part in incredible yield opportunities, earn staking rewards, and contribute to the decentralization of Ethereum.
However, the LSTfi sector is still young, ETHx has arrived in perfect time to ignite even more this powerful narrative
If there was ever the right time to get started with LSTs, it would be now. The LSTfi narrative is gaining momentum and Stader’s ETHx offers exclusive rewards for those who become early adopters.
PowerUp your ETH with ETHx today.
Join Stader’s ETHx communities across channels and be the first to know about $1M in launch incentives.
Subscribe to DeFi Daily Newsletter and Get Smarter on DeFi & Web3.
80k+ investors informed every day.