• General

  • Request For Comment: Best ETH staking for Olympus Treasury?

Summary: Treasury is seeking community's input to choose one or multiple ETH staking services

Motivation: We have internally been looking mainly at Lido and RocketPool. Treasury believes these two protocols offer different tradeoffs. Indeed, Lido is the industry leader and attracted close to $6B worth of ETH and a huge amount of liquidity for its token, stETH. However, its validators are currently run by a limited number of entities, all chosen by Lido which raises some centralization concerns.

RocketPool, on the other hand, counts 850 different node operators. However, the protocol only counts about $300M worth of ETH staked & rETH has much thinner liquidity than stETH which could put some limits on our investment size.

Next Steps

  • Gather feedback from the community, in the comments below or on Discord
  • Move forward with protocol whitelisting once consensus has been reached
  • Stake ETH

I believe a split between rETH and stETH is the best option, depending on the size of the transaction, we could change the ratio of rETH to stETH, preferably in favor of rETH, as it's more decentralized, and a decentralized money system is at the core of Olympus, so putting assets there would act as a vote of confidence.

RocketPool is far more decentralized than Lido but Lido is more battle tested. For now we should split ETH in two protocols imo. 80% to Lido and 20% to RocketPool. We can rebalance over time to 50/50.

  • json replied to this.

    Jankes per governance we can only do 25% max per protocol. So the question begs should we amend the treasury framework and allow to maximize ETH staking given that ETH staking is not the same as native asset staking on a dApp

        json

        the liquidity alone for stETH & wstETH makes it a very strong contender. My suggestion would always be towards the more liquid option. Some farming op on this also.

        e.g. Balancer.fi has a wstETH-ETH pool which yields 5% also in LDO and BAL awards.

        For the question, I would suggest keep it at current 25% max as given in governance. Put 12.5% into stETH, put 12.5% into wsteth, then add ETH to this and LP wstETH-ETH pool in Balancer.

        Rocket can remain 25% max. Keep 25% liquid in treasury as regular ETH.

        • json replied to this.

            I'd agree to start with 100% with stakable to lido as stETH (25%) and 50% of stakable to rocketpool as rETH (12,5%) and increase stakable rocketpool to 100% as the stability of the protocol is proven.

            imho. discussions regarding the incrementation of the per protocol limits can and should be held in a later date in a separate discussion.

            I am psure you are aware but there is also this curve/convex pool in which we can provide liquidity in the future.
            so I'd say we take it slow for now and start staking with minimal amount, after we see how we can maximise the return?

              electo reasonable, don't know about the wstETH-ETH though because of IL, also unsure if LDO and BAL are as valuable as let's say CVX. I think we will look into the new rocketpool LP that was created recently.

                I would go for both options (50/50?) at the start. While Lido is battle-tested there are certain centralization risks (as listen in the original post) and - perhaps more importantly - Lido already has such a massive share of the total number of validators that from a ETH network security perspective it would be better to have more diversification.

                crud This. 15% APR on a launch TVL of $20mil is the best advanced staking strategy on the market I think. Also, worth noting that the article suggests investing at a 77/23 rETH-wstETH ratio due to historic value imbalances between the 2 assets (wstETH preceeded rETH so it is marginally more valuable due to more accrued staking rewards). Why wouldn't Olympus stake across the two services in that ratio to benefit from this return in full?

                • json replied to this.

                    Blahtum We could put in some but not all. This would definitely be a particular strat for sure.

                      10 days later

                      Hello there,

                      I would like to propose to look into ssv.network who is building DVT although it is currently on testnet. It allows full decentralization and also slashing protection. It allows the Treasury to keep your own validator key and NOT passing it to any 3rd party and not having any single point of failure!

                      If you require any more informations, I can link the in charge to the team to discuss possibility.

                      Thanks!

                      I fully agree that staking should be diversified across different providers. With regards to liquid staking in particular, StakeWise should be considered as a great option for diversification. StakeWise can facilitate unstaking of over 10kETH currently and that is about to increase with new liquidity pools coming imminently.

                      The dual token model would also offer a decent boost to staking yields over and above both RPL and Lido, which could be meaningful given the amounts Olympus will be staking.

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