StakeWise: Redefining DeFi’s Liquid Staking Landscape
StakeWise emerges with a unique proposition: a liquid staking token that is available not only to the users of its staking pool, but to anyone running validators on Ethereum. StakeWise’s offer to the staking world is a universal liquid staked-ETH receipt, accessible by anyone on demand, that makes participation in DeFi markets easy and levels the playing field among participants Developers claim that this model offers an innovative blend of accessibility, security, and flexibility, positioning StakeWise as a leader in the liquid staking domain. Today we chat with Kirill Kutakov, co-founder of StakeWise, and learn more about their approach.
A Unique Approach to Staking
StakeWise’s protocol stands out by empowering anyone to mint osETH, a liquid staked-ETH receipt token, through staking ETH on any Ethereum node. By offering all Ethereum validators access to a liquid representation of their stake, StakeWise advances the DeFi ethos of decentralization, and allows participants to tightly control the staking process while accessing liquidity on demand. Kirill Kutakov, co-founder of StakeWise, highlights this as pivotal, ensuring users retain control over their assets in DeFi without compromising on the ability to stake with specific providers and use particular staking setups.
To further work toward this vision, the team is currently developing a novel solution that enables everyone to host a staking node without having the niche tech expertise traditionally required to do so.
“By simplifying the staking process further, we significantly improve staking participation, making the DeFi ecosystem more resilient and secure,” notes the founder.
This new approach is interesting for those looking to participate in staking, but who don’t want to hand over control of their ETH to a third party, or by those looking to avoid paying fees to staking providers.
Dual-front Risk Management
A common concern for users looking to get into staking has to do with security. Not unreasonable, considering there has been close to $60 billion lost to DeFi exploits since 2016.
When discussing their approach to risk management, Kirill highlights the dual approach to risk they take.
Technical Security: StakeWise places immense emphasis on technical security, rigorously auditing its protocol to safeguard against vulnerabilities. This aspect is crucial given DeFi’s history with exploits. StakeWise engages with top-tier auditors like Sigma Prime and Halborn to analyze its codebase, ensuring a defense against potential security breaches. The clear distinction here is the protocol’s proactive stance on technical risk, emphasizing prevention and continuous oversight.
Economic Risk Analysis: On the economic front, StakeWise collaborates with IntoTheBlock to employ the Risk Radar, encompassing 19 metrics designed to provide users with a comprehensive view of economic risks. This partnership facilitates informed decision-making for users and key insights on a protocol level. The integration of such analytics tools highlights StakeWise’s commitment to transparency and user empowerment in navigating economic uncertainties within DeFi.
DAO governance and protocol security
The StakeWise DAO embodies the principle of user-centric development, allowing stakeholders to influence the protocol’s direction. This governance model ensures responsiveness to community needs, particularly concerning risk management strategies and protocol upgrades. Such a framework fosters a sense of ownership among users, reinforcing StakeWise’s community-centric approach.
When considering common risk situations in DeFi, Kirill explains how their community-centric approach works. In case a risk situation arises, there are several protocols set in place to address this together with the community. Under non-urgent circumstances, proposals are submitted to a DAO vote, which will then be taken up for development depending on community consensus. Once the development is done, the final implementation is also orchestrated through a community vote. This approach ensures that StakeWise remains responsive to its users’ needs and concerns, especially regarding risk.
In the event of any urgent risk-related situation, StakeWise can react quickly and prevent losses to the protocol by engaging its multisig members, while further steps are evaluated through the regular DAO process.
Navigating the Future: Vision and Adaptability
Looking ahead, StakeWise is set to broaden its impact in DeFi, prioritizing user security and protocol integrity. By actively integrating its liquid staking token into lending protocols, developing validator management software, and adopting a measured stance towards re-staking, StakeWise illustrates its dedication to maintaining a secure, beneficial ecosystem for its users.
“We’re constantly exploring new avenues to enhance our protocol, always with an eye towards minimizing risk and maximizing user benefit” Kirill Kutakov
Concluding Thoughts
StakeWise takes a differentiated approach in its development, prioritizing decentralization, flexibility and security. By seamlessly integrating rigorous risk management with groundbreaking liquid staking solutions, StakeWise not only provides users with a secure platform for DeFi engagement but also paves the way for a more resilient and user-centric DeFi ecosystem on Ethereum.
