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ETHx is an innovative liquid staking token developed by Stader, designed to revolutionize Ethereum staking. Our vision for ETHx is to transform the staking experience, providing users with the unprecedented freedom to move and utilize their staked ETH while continuing to earn rewards and engage with the growing DeFi ecosystem.
- Continuous Staking Rewards: With ETHx, your Ethereum assets aren't locked away. You continue to earn staking rewards, thereby growing your Ethereum holdings.
- Access to DeFi: ETHx integrates with decentralized finance applications, providing opportunities to earn additional rewards by participating in yield farming, lending, and more.
- Scalable and Decentralized: ETHx promotes a scalable, decentralized staking solution, contributing to the overall decentralization of the Ethereum network.
Liquid staking has emerged as the preferred way to stake on Ethereum with ~3%+ share of all staked ETH. This is closely followed by CEXs (~29% of all staked ETH) as the next preferred option. And within the liquid staking ecosystem, there's a single protocol that has a dominant share of ~90%. Adding the top 2 exchanges to this protocol, ~50% of all staked ETH flows through just these 3 entities.
This clearly highlights the need for more robust alternatives. Protocols offering permissionless node operations faced significant scaling challenges due to 16 ETH bonding requirements. Apart from this, most liquid staking protocols have very limited DeFi integrations, reducing their utility/attractiveness to users.
Stader's intent with ETHx was to create an LST with a unique value proposition to users and node operators while also adding to the diversity of LSTs on ETH. Before presenting the detailed breakdown of ETH design, here's a summary of the unique value proposition that Stader will bring to the ETH community:
Multi-pool architecture: Designed for decentralization, scalability & resilience, ETHx has a multi-pool architecture. This is critical to ensure that the node operations for ETHx can be decentralized, scalable and resilient. ETHx has a permissionless pool, allowing anyone to operate nodes, and a permissioned pool, with curated validators with consistent performance in phase I.
Soon as Distributed validator technology (DVT) is established as a stable technology, we will be early adopters and initialize dedicated DVT-based stake pools in phase II. We are one of the early grant recipients to build on top of SSV and are already live on testnet. This modular, multi-pool architecture has the flexibility to support additional pools, which could emerge with the evolution of the ETH staking ecosystem, in the future.
Stader's vision for ETHx is to strike the perfect balance between user experience, scalability, and decentralization. We envision a future where ETHx is:
- Predominantly supported by permissionless node operators, run by independent operators or home stakers, thereby democratizing the staking process.
- Scalable, thanks to Distributed Validator Technology (DVT) that lowers the bonding requirements for node operations, allowing for a broader range of participants.
- Extensively used across the Ethereum DeFi ecosystem, incentivizing more Ethereum staking and contributing to the security and robustness of the network.
Through ETHx, Stader is paving the way for a future where staking is seamless, rewarding, and integral to the Ethereum DeFi landscape.