ETH Staking: Addressing the challenges of Liquid Staking Derivatives (LSD)

Transcript

yeah okay so let's start so today we will speak a bit about the is taking about the LSD and if it's taking derivatives and one on one of the biggest challenges uh with the death centralization in terms of liquids taking my name is Rossi Slough nice to be here I'm a CTO of asymmetrics uh before we jump into this complicated topic I would like to speak a bit about myself so I'm originally from Ukraine and in Ukraine I'm leading the key for serum Community they do a lot of meetups workshops every month we teach in our developers our students for Webster Technologies especially for

the ethereum if someone would like to take make a speech in Ukraine it could be of course online please reach me in the end there will be a cure code with my Twitter you can write me Twitter or you can just come and say hello I would like to share some knowledge on any topic this would be really cool for ukrainians for developers if someone wants to share some knowledge okay let's jump into the topic so what is liquid sticking derivatives I guess maybe probably like a lot of people here already used it yeah and how it works is usually if you would like to stake and

get the rewards from your ether you have just not sitting on your just wallet and that's it you need to validate the blocks you need to become validator you need to run a node and so on and so forth and it could be complicated you could be slashed you could like if you run not of validator yourself you you could have some problems so and here LSD protocols come comes in yeah and they simplify for you the process to to validate to become a validator to gain a validator Rewards uh so what what you need to do you just need to swap your initial ether to stake

this or air ether whatever which is really simple and great ux and that's cool yeah and this is one part of the story what you can do with your LSD right now in your wallet you can just take means like just swap your easer to stake teaser and just don't do anything just hold and get rewards to your wallet and that's cool you don't need to do anything you just take a risk of the protocol itself and that's it also you could use LSD in the file for example you could use your stake teaser or ether whatever in in as a collateral

in such platforms like Ava you can provide liquidity in curve and so on you would gain additional rewards but you introduce new risks for yourself for example uh in our you could be a liquidated of course so yeah that's but it could be new more [Music] APR also you could participate in liquidity mining programs with lsds for example if someone incentivizes you your LSD tokens with some you know some tokens some some rewards whatever you can participate in it but it's I

guess it's the highest risk in because usually it's a new protocols there could be some problems with the security and so on so let's take a look a bit in current market State yeah what what's going on here so we can see that there are a lot of liquids taken providers but the most important is that we have someone really huge someone like Lida who keep actually is almost 74 percent of the of the World Market yeah and uh do you see any kind of problem here I personally see yeah because because it's a bit uh it's a bit of

danger for the for the ethereum ecosystem for the ethereum itself for the ethereum level of death centralization you know that right now ethereum is the most decentralized Network yeah in the world I mean in blockchain yeah and the level of decentralization is really huge but with such a gamer players uh it's like the centralization levels start sacrifice so what we see in the community actually vitalik said I think one year ago or something like this that if someone controls start to control like 15 more than 15 percent uh of the total stake then it should go

with uh you know like kind of fee they should raise the fees until they they are uh their part their percentage of the pool get less than 15. uh which actually makes sense but not for for the protocols who earn money based on this kind of uh business so yeah right now in in the industry there are a lot of guys who is Raising this topic in Twitter I don't know if you're following them that they say okay there are high problems uh let's let's discuss let's at least discuss yeah so what we should what we see in the community in general for example there

was a lie though uh voting pool uh with their ldo holders in the in their Dao and they asked their Community whether they need to self-limit themselves or not of course the answer is not because in this case like asking a lighter to limit themselves is just you know like taking their money of course they will not go for it and I started to explore the internet the current the Twitter and checking for the proposed Solution by Community which could work and I didn't find anything but

I found some statements on Reddit I found some interesting discussion on Reddit I guess in his Finance Channel or something like this there was a there was this topic actually the guy explained the current situation on the market and I started to read like all the comments and some of them actually attracted Matt attention so let's start with this the first one uh it's a hard as hell to coordinate anything with layer 0 and as we're finding out unless it comes from Big names like ethereum Foundation economic forces yeah or things simply don't get attention until they start a line and

then just sort of happen so basically the problem is that for now no one cares everyone is earning their rewards in Lida and in different liquids taking protocols and that's cool and that's really a has great ux you don't do any you don't need to do anything you don't need to care about your notes and so on but in general uh this start like put us in the position or like ethereum okay system then we sacrifice the ethereum digitalization level this sucks and hope in Lido will become a good actor was coping hope it gets solved by higher power some someone yeah comment and sold may be vitalik or

someone else and cops that at least it's lighter and not something like binance that's good that it's not not a government of course of course like Lido is more or less also have some decentralized layers but in the end still that's the the huge problem one more statement uh pushing for lighter self limit is taking money from them yet so basically I'm not the the guy who is who like this proposal and I guess uh lidoor holders and Community also doesn't like this uh and I understand why because it's a business because you know there are a lot of not validate not operators and

it's a great Marketplace for the not operators and for the people who don't who don't want to stake themselves they just want to earn rewards I mean wallet on your East so that's cool um and in the end we have to admit that for now Roy wins Roy it means like uh returns of investment I found the great wheat which actually shows everything so everyone being champions for LSD and clinder versus diversity if you remember the kind of diversity was also a huge great topic but we solved this so the community solved this actually

and he's saying I'm going to be the champion that blunty tells everyone Solo's taking experience is a nightmare and I don't blame anyone for just saying it and go go into LSD so that's uh yeah so basically we have to fix the ux before before we ask someone to go so mistaken because if you ask someone please don't use slider please don't use rocket pool and so on please go and run your node become a solo validator in this case you will be responsible if someone if this guy will lose the money like if there would be some penalty and so on

um so anything we can do with it actually yeah I'm agree with the last statement that we have to to fix the ux for the source taking it should become the same simple with the same uh like Roy for the for the for the person to become a validator I don't know how to do it and I didn't find any better you know like proposals on the community I don't know if if someone knows uh something interesting please let me know uh in the end of the discussion there would be a would be a place for questions so anyway this is the problem uh but let's let's take a look what people are

doing with LSD right uh just because it's interesting uh usually people just separate the the yield from the from the east from the state teaser let's say or any other asset uh any other LSD so they separate their body uh of ease and they separate the yield uh and that's one of the interesting projects I found in in the internet maybe someone could help me with the name of it um yeah that's Pendle thank you yeah that's bundle Finance yeah great so you in Pendle for example you can you can buy just just the yelt separated from

the from the body of of the asset it's which is cool so basically and LSD you can what you can do you can just separate the the body with with the yield the second example I found interesting as well is uh actually when you deposit your LSD [Music] and then also the yield and body of the asset gets separated but in this case the guys using the body as the collateral and they means the stable coins for them they're all in stable coins for this collateral and uh what they usually do and they

also reward their stablecoin users who hold who hold their stable coin and they reward them in some rewards how they achieve the rewards basically they use the stake teaser yield for this yeah they bind their uh stable coin on the market and then just share all of this with their holders anyone who knows this protocol name this is Libra Finance actually here I think my listeners not not really much and into device space right notified against everyone is more mature

okay let's go next uh the next example is when you have a pool uh like a lot of people deposit their LSD like theirs take this or into the pool and then uh wait some time and then also the body and yield also get separated but with the yield they don't buy any stable coins they they just distributed between some winners yeah it's like anyone knows this uh this the protocol yeah it's our product also this is the symmetrics that's what what actually we do so what is the symmetrics asymmetrics is simply premium bonds on on chain

the concept coming from the England from the UK a lot of people participate in actually there and as I checked there was like 22 million of people I guess uh with 100 billions of uh of funds here participating in this premium bonds which is quite interesting quite interesting because it actually gives you uh gives you a reason why why you need to hold the like why do you need to start and invest yeah and hold for example Easter um it's it's kind of interesting concept so basically wire symmetrics yes so if

you are looking just for the regular yield from the stake in like 4.5 percent it's um it's cool yeah and for a lot of people it's good but if you are looking for something more interesting more excited uh you can join the symmetrics and you can expect a per more than five percent uh if for example you have some luck you can win a lot of ether in some small period of time you can also withdraw funds in any time and this adds excitement to the process if you compare with some just LSD just hold you in your wallet and that's it in

case of our protocol you go to our website and before the next draw you just waiting and and thinking okay I will win this time that's definitely so how it works usually user deposit theirs take this they're talking to the protocol and and that's it yeah so we basically mean for the user PST tokens one to one uh in ratio one to one and send it to the user wallet then we accumulate ethereum stake it rewards uh to our pool we wait for one week and and then we actually distribute the yield so yield is distributed to the

users whenever draw is finished for now it's one week but it's configurable by by our Dao it's distributed to three winners amount of winners also configurable how do winners receive their rewards they don't need to do anything they don't need to make any transaction they just sitting in the wallet sorry sitting in the pool and just waiting so you can put your ether and stake teaser and wait for one year and then come and see how it performed for example how many times you win and all the winnings participate in your next draw as a part of your position which is great so you don't need to do anything you don't need to

monitor uh like you can withdraw whatever whenever you want how to withdraw your initial deposit as I said you can withdraw but at any time you want uh we just burn your pisted which we gave to you and that's it so this is our asymmetrics now proposal life cycle so no we have it down but it's still of chain it's we are using snapshot of course we have plans to move to Unchained now but for now as we are like we launched a bit more than months ago uh and by the way we already attracted more than 800 me uh oh sorry uh 18 millions of dollars it's like a bit more

than 10 000 stake this here uh so this is just regular down nice and special here uh someone proposed The Proposal on Snapshot Community voting then we have sorry we have some stakeholders uh who actually execute the proposal they are multi-seek we have a multi-603 and then what is good is that you have a time log we cannot implement the voted proposal right away we need to we need to wait for 12 hours because get implemented so if if someone doesn't agree with this proposal which actually was voted yeah he can withdraw his funds from the protocol and there is no risk with this

so our future plans and roadmap basically we have a right now we are Distributing our I6 governance token uh to the uh to the our early adopters to the people who is sitting on the pool and right now the yield in our S6 tokens is 20 percent so even if you don't win you still get 20 on your East which is great deal I guess uh because usually this is kind of early incentivization program for uh for three months I see I think it will be live still like 50 days or something like this so uh first first proposal for the

future we actually discussed it already with our Discord Community join our Discord and uh people were more excited about this first think is that I6 holders get additional chances to win the draw if they hold S6 tokens which is which is interesting so basically let's say you have I don't know 10 000 A6 on your wallet you have a position in the pool uh what we propose to do we propose to multiply your chances in this coefficient 1.1 yeah and in this case for the user it makes sense to hold the A6 token because we actually instant device and the higher changes

even without ether in the pool the second proposal is to create template of the pool so what is the problem the problem right now is that if you have an Acer it's a really small amount of like it's a really small chance that you will win and for some small or medium size isholders it could be a problem so what we're proposing is basically to create a pool template where people would be able to participate in the pool not as a solar participant but as a pool so they actually go to their friends and say okay let's combine into the pool you have one Easter I have two easier let's

combine it would be like 20 ether and 20 ether is like more chances of course like in the end you will get a less rewards because rewards will be distributed between the pool proportionally but this increase your chances and for some users in the in the ecosystem it could be more interesting than just go and uh I know sit like a saw sticker you know we can compare it with solo Mining and when you're join in the pool so that's uh the third is to migrate more to more decentralized architecture with gelato Network or something similar for now we are using open Zeppelin Defender tools after tasks and so on but we have plans

to move to more decentralized thing that is really adopted already in the in the ecosystem on chained off creation which I mentioned already before and we'll also will introduce balancer 80 to 20 model regretable for S6 token that's it actually thank you everyone this is my Twitter I started to post some posts recently maybe one month ago if you subscribe help me to to actually with some posts like get some attraction and so on that's will be cool thanks very much slav Round of Applause everyone

[Applause] um we did message slides up so there's an even got a question we'll just do all right we'll do two questions and then call there thank you thanks for this um um question so for single uh depositor what is the probability of at least one win within a year and what is the percentage when on the amount deposited yeah actually this comes from the actually the percentage of the of the pool um so when you deposit we need to know the amount like the size of the pool if it's like one one like let's say 10 000 of stake it is there if you deposit 100 it's one percent of the chance of of the Union

so it depends on your and depends on pool size and it depends on your how many how many uh stack these are you you send to the pool uh like it's not in in within the year we do draws like every week so you are purchase you have a chance to win every week so if you're if your percentage of the pool is one percent then and you are seeking full one week then yeah you have a percentage one percent that's how it works um hi how would you separate your mechanism like from the pool together I remember there was a protocol where you

could stake your die into pull together and then it would work yeah actually we discussed it uh a bit like so it's similar pretty similar to pull together and pull together the problem uh with the distribution of um model of reward like with the reverse distribution model you they don't distribute the full rewards every week because they have a different model how they actually choose winner they do it uh with some on channel on chain logic in their smart contracts and it doesn't give ability to distribute fully the rewards like every every time and in our

case we just used chain link vrf and uh and actually we get the random numbers and we have let's say you have 100 chances yeah and then it means that in the in the file you will be mentioned 100 times and then we have a huge file with all the participants with all their their chances and then we get the three random numbers from chain link vrf and basically based on and we just take it from the from the file and that's how we distribute all the yield in pull together it's a different scheme but yeah it's it's pretty similar to pull together uh just also we use take tester they use stable coins

yeah so first of all I have two questions yeah sure uh according to current market cup you have right now self-reported circulate and Supply 2030 000 like 200 000 like tokens and what is what was your distribution model what is your cell uh how you sell it tokens to the people it's first of all because I want to know like uh who is the main uh holder of your tokens to governance decisions to make a Lego governance decision and first of all and second one

uh you said you have 20 apy like yeah three three four three months yep yes it's not it we have we just distributions three millions of I6 tokens for the 100 days and uh it depends on the pool of the pool size yeah the APR more and more or less okay so we have like a part of the tokens to distribution for this like API yeah yeah okay gotcha yeah so we we distribute our tokens for everyone who is in the pool uh and that's how we like have an API and 20 but that's just for early stage and the the answer in your second question who

is the how to buy it so for now no no no I ask like who is the main like holder okay because it's a small circulation right now as I understand so the total Supply is 100 Millions yeah so but 97 90 million isn't in treasury three millions is uh right now distribution and 7 million is reserved right now for the community so I mean uh we have pretty simple distribution of the tokens model you can tokenomics you can go on the website it's it's there so right now we have a pool on unisoft version 3. and basically that's it and how user can get a six token he can uh get it we are in

season in our pool or just go and buy it online that's that's it all right thank you very much love thanks for everyone else versus love and for yourselves last [Music]