Validator Spotlight: Staking Facilities
Imagine beginning the process of setting up a validator before Proof-of-Stake was even officially live, on any chain. That’s been the journey for Staking Facilities, among the most successful and long-running multi-chain validators in blockchain.
As a bootstrapped entity themselves that grew organically over the years, they have close ties with Marinade and those projects building for the long-haul throughout crypto.
The transition from cryptocurrencies being predominantly validated via Proof-of-Work towards a more efficient Proof-of-stake mechanism has evolved since around 2018 when such networks like Tezos and Cosmos began. Ethereum was still proof-of-work, as was Bitcoin and its forks like Litecoin.
Back in 2018, Wolfgang Albrecht, co-founder of Staking Facilities, had been researching the latest in blockchain in his spare time and saw an opportunity at the infrastructure level.
“I noticed all these new proof-of-stake networks needed validators and compute to run on. Back then no one was thinking about this outside the (PoW) mining industry.”
So Staking Facilities was founded on the idea Proof-of-Work didn’t scale as well as the more efficient Proof-of-Stake. The company’s earliest chains they ran validators on were Tezos and Cosmos. They’ve expanded since to include others like Ethereum, Kusama and Aptos, and have had an especially large commitment to Solana where they have grown into one of the largest validators.
All told, they have around $800,000,000 in staked assets across chains.
Staking Facilities history and outlook on Solana
While at the Consensus conference in 2018 in New York, Albrecht caught a presentation by venture capitalist Kyle Samani discussing Solana. At that time, Albrecht recalls it was still a no-name project with maybe 2,000 people in a Discord. It prompted Albrecht to read the whitepaper which veered away from the common mechanism of sharding and instead provided a new monolithic approach to scaling.
Around this time, what frustrated Albrecht was that Tezos and Cosmos validators were running on expensive machines, but not fully maximizing their output. Solana’s design could get more out of the hardware.
“You had these expensive machines and lots of idle capacity,” said Albrecht. “Solana was one of the first to make use of the hardware which was cool to see as a company.”
In 2019 Albrecht told Staking Rewards in an interview that Solana was, “Leveraging key innovations in multiple areas such as data propagation and networking, run-time parallelization, and the underlying ledger data structure Solana aims to scale a single blockchain (no sharding!) and make it insanely fast. Bypassing the complexities and UX horrors that come with sharding and other layer-2 solutions Solana is a uniquely different approach offering a near-perfect developer and user experience.”
Staking Facilities has grown their Solana validator to over 8 million SOL, ranking among the largest on Solana (Currently #2 behind Coinbase Cloud). That’s over 2% of all network stake at the moment. During this time, Albrectht has served on the council for the Solana Foundation
View Staking Facilities statistics on the Marinade Validator Dashboard
Staking Facilities has been around Solana for the bull run of 2021 as well as the crash of FTX-Alameda in 2022 which caused panic and uncertainty in the ecosystem. Albrecht viewed that time as a chance for newcomers to get involved in Solana, and even consider running their own validators with self-stake. Albrecht, who provides institutional services through Staking Facilities, believes the void left by FTX-Alameda is overall a positive one for Solana.
“Talking to institutions, a lot of them avoided Solana because of Alameda and FTX. There was a consensus that these are toxic players.
“Solana is now a much more level playing field where you can compete in a healthy way.”
Supporting Solana builders and liquidity
Staking Facilities is one of the earliest validators on Solana and despite their bootstrapped beginnings now have a significant amount of self-staked SOL. Glance at many of the largest validators on Solana, and quite a few are anonymous with 100% commissions. Often times, these nodes are early SOL investors using their allotment to drive more staking rewards back to their entities. Their commitment to Solana beyond this can be unclear.
Staking Facilities has approached their participation much differently, both on Solana and on other chains they are involved in, by being active, participating in DeFi, and investing in other projects they believe to be critical to the ecosystem. One of their investments in the ecosystem along with VGNG was Solana Beach, a Solana block explorer and popular dApp.
With Marinade, Staking Facilities has staked some of their SOL for mSOL and utilized the Liquid Self-Stake product, which enables them to receive the mSOL liquid staking token for their self-stake and keep the stake on their node. Participating in liquid self-stake also makes them eligible to earn MNDE for their mSOL held via the Marinade 2023 Open Doors Program. For each mSOL added over the next 12 months they can earn 4 MNDE of rewards available to be utilized in protocol governance. Albrecht believes liquid staking will end up being the dominant way of staking on Solana, and participation in Marinade will keep them close and possibly influential to the decisions that help shape the protocol in the years to come.
“Liquid staking protocols are very close to the networks themselves,” said Albrecht. “Marinade is a very Solana-aligned initiative that really cares about the protocol, cares about decentralization, and all these values that make a PoS network successful.”
With Marinade set to update its governance tooling in 2023, validators like Staking Facilities who own the MNDE token will be able to not only utilize validator gauges but also use determine which products and direction the mDAO should focus on next, for example like mTransaction and MEV.
So even if the Marinade delegation algorithm does not delegate stake to large validators in the Superminority like Staking Facilities, they can still play an integral part in helping to shape the protocol and overall prosperity of Solana.
Marinade Validator Dashboard | Marinade Validator Gauges | Liquid Self-Stake
