Phase 1 ether.fi Mainnet Launch… and more!

This is going to be a long post and will cover a lot of ground. We’ll get into more detail in future posts — particularly around our roadmap — but this should serve as a helpful summary regarding what today’s launch entails, and hopefully answer some of the frequent questions we’ve been getting.

Phase 1

We’re launching Phase 1 of our protocol on May 2nd! If you want more detail about what the scope of phase 1 is going to be then please take a look at our documentation.

At a high level the scope of phase 1 is mainly delegated staking, and we’ll be rolling out our loyalty points membership program shortly afterwards so that Early Adopter Programme (EAP) participants can migrate their ETH.

Our contract audit is being finalized and we will publish it shortly, hopefully before launch.

We are also going to be launching with slashing insurance baked into the protocol through Nexus Mutual. We are the only DeFi protocol with built-in slashing insurance.

This phase 1 launch is a huge milestone and is the result of incredible work by the ether.fi team. It has been remarkable to watch everyone absolutely knock it out of the park and score the goal right in the touchdown end zone. Sportsball!

We are also humbled by all the support we’ve gotten from the Ethereum community. The EAP was supposed to just be a fun marketing promotion and a way to reward early supporters, but it has grown beyond our expectations. We will do everything that we can to continue to reward our earliest supporters.

The snapshot was taken in the evening of April 30th as promised! Please see below for more details about the rollout and migration plan. I want to point out (and will do so multiple times through this post) that to get the benefits of being an early adopter you need to actually migrate your ETH into the staking protocol and stake for a while — we’re looking to reward long term supporters of the project.

Ok, now on to to the fun stuff.

Gradual Rollout

We’re going to initially deploy the protocol with a whitelist and begin by deploying our own capital with trusted node operators. We’re doing this because we don’t want to risk user funds before we’ve battle tested the product, and we think it’s right that we should have skin in the game.

Assuming all goes well we are going to approach our larger EAP stakers first and have them migrate their ETH in multiples of 32 ETH for full validators. Again, we’re doing this out of an abundance of caution.

We expect to be able to allow large ETH stakers to be able to stake within a week. Initially we will manually whitelist anyone who is interested.

Shortly thereafter we will deploy our meETH loyalty points membership program that will allow all EAP stakers to migrate their stake. In the meantime everyone who stays in the EAP pool will continue to earn loyalty points (more on this below!)

We will keep everyone posted and will move as quickly as possible while ensuring the safety of our users. As I said above we will risk our own capital first.

Restricting US Users

We love America. But America hates crypto. At least the regulators and communists do. Sad.

We are going to take multiple measures to prevent American users from participating in the protocol. The only way for American users to participate in the protocol is if they are accredited investors and they go through our ETH fund vehicle. Please reach out to us if you’d like to learn more.

We want to be clear — if you are a US person you cannot use the protocol directly.

The steps that we will be taking regarding US persons are as follows:

1. Geofencing the dApp.
2. Requiring all users to sign an on-chain declaration that they are not a US person.
3. Making it clear in all documentation that the app is not to be used by US persons.
4. Make our ETH fund available for US persons who are accredited investors. This is a regulated and legal means to participate in the protocol. We don’t charge management fees on the fund — it is a free service.
5. We are not going to be issuing a governance token or doing an airdrop (see below.)

We want to focus on building a quality product that works for users and solves a real problem.

Loyalty Points and Membership Program

We are modeling the program after other popular loyalty programs, such as airline miles. If you keep these types of models in mind, a lot of the aspects of our program will naturally make sense.

Here are the elements of the loyalty points program:

• You get to carry over all your points from the EAP if you migrate your ETH into the protocol.
• You earn more loyalty points every day that you stake and the number of points your earn is proportional to your stake size.
• You can earn more points by taking other actions (to be announced soon.)
• You keep all the points that you’ve earned. The only reason your number of points will be reduced is if you use them to purchase things, such as swag or anything else in the future.
• Your membership level is determined by how many points you’ve earned in a given month. Certain actions can bump up (or down) your membership level.
• Your membership level determines the share of staking rewards you get.
• All EAP stakers who migrate their ETH will automatically be bumped up one to three membership levels, which will allow them to start earning a higher share of staking rewards right away.

The membership levels are:

• Bronze (this is the starting level)
• Silver
• Gold
• Platinum

All EAP stakers will be placed in either Silver, Gold or Platinum levels depending on their points balance.

In addition ether.fi will provide rewards boosts for everyone who stakes for the first 3–6 months. This will come from our treasury funds and will be in ETH.

We aren’t able to talk about the staking reward rates users in the various membership levels will be able to expect unfortunately. Once the protocol is live you will be able to see the real-time effective APR on the dApp. We may publish a spreadsheet tool for people to play around with the numbers.

Why are we rewarding early users with this mechanism?

• We want to encourage sticky long term stakers — we don’t want users who are looking to hop in and out.
• We want to avoid growing the protocol with unsustainable token emissions that encourage dumping on retail.
• This is a much cleaner way to reward users with real ETH rather than some memecoin.

We will publish more details and numbers on the loyalty points and membership program soon.

Governance Token and Airdrop

There are no plans for a governance token or airdrop.

Why is that? Because we feel that that having a token at this point introduces a lot of risk and will be a distraction.

We have a strong commitment to decentralization, and DAO’s are not the only way to achieve decentralization –in fact, we’re not even sure they’re the best way.

The strongest means of enforcing true decentralization comes from smart contracts that transparently ensure users retain custody of their assets and prevent anyone else from being able to mess with user funds. If those contracts are successful, then you don’t need to worry about a DAO or governance — you can just trust the code.

DAOs frankly also make managing the protocol a nightmare and slow things down at a stage in the business when you need to move fast.

We’ll continue communicating our plans and aim to be transparent with our community.

TL;DR

Yes, I put the TLDR at the end, because otherwise no one would have even tried to read the post. But at least this way you have a convenient summary!

• Phase 1 mainnet launch coming Tuesday May 2nd and will consist of delegated staking.
• We are doing a gradual rollout out of an abundance of caution and will deploy our funds first, then allow larger stakers to participate and then smaller stakers.
• We are going to restrict US persons from participating in the protocol directly. US persons who are accredited investors will be able to participate legally through our ETH fund.
• The loyalty points and membership program will be launching shortly to reward early EAP stakers. Users will be able to earn boosted staking rewards and continue to get other benefits over time.
• There is no token lauch of airdrop planned. We will focus on decentralization by ensuring users retain custody of their ETH.