DAO First Liquid Staking
- DAOs using existing vanilla staking services are compromising on decentralisation and take on unnecessary 3rd party risk.
- DAOs and their users are being charged high fees (upto 10%) with very little ownership over the direction of the assets they’re being charged for.
- Geode can offer DAOs Higher Revenue, Increased TVL & enhanced capital efficiency.
- Geode generates revenue from their own DEX for their staking derivatives.
On December 1st 2020, we saw the launch of the Ethereum Beacon chain. For the entire Ethereum community this represented a huge jump forward from the Proof of Work (PoW) model we have today and the Proof of Stake (PoS) model — a central vision of ETH2. This jump set off a cascade of events as the entire development community looked to capitalize on a gold rush which saw the creation of liquid staking. We saw billions flow from individuals, VCs and DAOs into ETH2 liquid staking protocols.
It’s important to acknowledge that this level of opportunity in any market will always see its fair share of failures — sadly, in certain cases, millions in user dollar value was lost when speed of launch came at the cost of security for protocols.
On balance — It is easy to see the incredible benefit that the large successful liquid staking protocols have had on ensuring the continued momentum, innovation and commitment towards PoS on Ethereum.
What about DAOs and Decentralisation?
Somehow, Ethereum staking moved away from the core ethos of Ethereum itself — decentralisation and transaction security. Most Vanilla staking solutions are inherently centralised and ultimately provide a level of uncertainty to the Ethereum ecosystem.
Lido alone holds around $6 billion in Ether with a large portion of that secured by a simple multisig.
In spite of that, we saw DAOs push their treasuries into staking protocols to do best for their token holders with yield generation on excess ETH — but this came at a cost. The Beacon Chain was an incredible step forward but it was just the beginning. Staking 32 ETH to earn the right to be a validator is the easy part — there are plenty of decisions to be made when ETH 2.0 launches.
To name just a few:
- How do I maximize the yield for the DAO?
- What is a fair fee structure for this service?
- What validator infrastructure should be used?
- What client should the validator run?
- How should the validator form blocks?
Each item and each decision will be important to some DAOs and not important to others. DAOs may also want to vote to outsource everything to a third party. The important part is that they should be able to decide if they care or not.
As we stand today — protocols are being charged high fees on their staking yield (upto 10%) with very little ownership over these decisions.
“The past is solid, the future is liquid”
Geode — Liquid Staking Owned By The DAO.
With its recent launch on testnet, Geode Finance is putting DAOs at the center of ETH2 staking by providing a white label liquid staking ecosystem. The outcome is to finally give DAOs the ability to take secure, decentralised ownership of their own liquid staking. With Geode, a protocol now has the ability to launch and control its own liquid staking asset without compromise.
This is a DAO first approach and the future of liquid staking.
Key elements of implementing Geode’s trustless liquid staking solution:
- Simple and quick implementation for your tech team.
- Ownership of your users and/or treasury risk management.
- Autonomous control of withdrawal contracts.
- Unique wETH2 token named by you
- Your governance makes the decisions
- No third party making decisions without your permission.
- No setup or ongoing fees from Geode.
Liquid staking as it should be — power in the DAO’s hands.
Geode will support your tech team to get everything up, but takes absolutely zero fees from you or your users for this. If you are daunted at the prospect of the initial setup, ETH2 decisions on launch, or any infrastructure choices, we are here to offer guidance and advice.
The outcome for the protocol is:
- Revenue Generation: Create the fee structure that makes sense for individual DAOs and its users, generating significant ETH revenue for its treasury. Geode does not take a cut.
- Capital Efficiency: Allow your users to benefit from enhanced capital efficiency by allowing ETH as a base asset in your products to be yield generating.
- Higher TVL: You get to offer your users better yields, lower fees and the comfort of the trust they have in your brand, locking more value for your protocol.
What’s in it for Geode?
As you can imagine, we spent countless hours designing, creating and problem solving a truly trustless decentralized staking solution that puts DAOs at the center. We opted to not charge a fee for any of the implementation or ongoing support because we did not want to compromise on our vision.
Instead, Geode’s revenue model comes from offering a decentralised exchange for ETH2 staking derivatives. In the same way, there are very large protocols like Curve — that facilitate the trading of stablecoins with a modest fee model. DAOs will have the ability to create and manage their own wETH2 tokens leading to significant user demand to trade between these assets or convert them back to ETH. This compliments our vision and improves composability as users can jump between different products that require different wETH2 tokens instead of being limited to 1 ETH2 derivative. Geode’s liquid staking ecosystem can even be applied to other PoS chains, making cross-chain interoperability possible in the near future.
How Do I Integrate?
Simply review Geode’s Integration Guide for DAOs when making the decision to offer ETH2 staking to your users through Geode. If you are interested in integration, please visit our Discord and contact Oranges in the Operations department.
How Do I Engage With Geode?