SF Newsletter August Issue
PoS Ethereum around the corner; Solana phone & client diversity; Polkadot staking facelift; Interchain Security on Cosmos; and much, much more!
TL;DR
We’re growing: new team members & open positions
We’re exploring new networks: Aptos, Sui, Stride
Ethereum: Mainnet Merge within eyesight - everything you need to know
Solana: client diversity, iPhone moment, and FUD
The Graph: additional core dev team & new chain on its’ decentralized service
Polkadot: staking UX improvements on the way
Cosmos: Interchain Security coming to the Hub
Skale: V2 gaining traction
Pandas on Ethereum? (keep reading to the end)
Welcome to our August issue,
In times like these, it becomes painfully obvious that Wu-Tang Clan was right with their song ‘C.R.E.A.M. - Cash Rules Everything around Me’.
Markets across the board have been beaten badly as people flee riskier assets in order to hold cash in times of high macroeconomic uncertainty due to war, inflation fears/rate hikes, supply chain shocks, and an ever-lurking discovery of yet another corona variant.
This time around, it was macro that triggered the (crypto) bear market. It was just accelerated from within through the Luna meltdown and the consequential liquidations and ultimately, bankruptcies - note that these bankruptcies were centralized players dabbling with crpyto/DeFi via a ‘TradFi’ (traditional finance) approach. DeFi continued to operate just fine.
While terrible for many investors, this shakeup happened before the UST stablecoin became ‘too big to fail’ and hence a systemic risk to the overall ecosystem - learn more about stablecoins here.
With this out of the way, crypto entered another ‘build market’ - we had to borrow that term from Bankless as it perfectly emphasizes what matters now, building. No reckless speculation. No excessive hype.
As you’ll find out if you continue reading, lots of building is happening right now. We’re more convinced than ever that the future of the internet is permissionless, transparent, and decentralized. Tag along and convince yourself. The next few years are going to be a heck of a ride and the opportunity of a lifetime!
We’ll be trying out a few new things for the next couple of NL issues - let us hear your feedback via info@stakingfacilities.com
Markets down, spirits up!
Despite the bear market as well as lay-offs and projects shutting down, we have been growing substantially in the past 6 months. We are thrilled to have won so many amazing personalities and talents for our team - all eager to accelerate the diffusion of web3 and co-create the next evolution of the internet.
While most growth happened within our tech team, we hired across the board: HR, marketing, ventures, finance, and design.
Please join us in welcoming Johanna, Marcell, Julia, Matthias, Claudi, Maurice, Victor, and Eric!
Each week, we’ll introduce another team member in more depth through this blog post - make sure to check it out and get to know the people behind Staking Facilities.
From September 5th through September 9th, we are meeting for a company retreat - for some this will be the first time seeing each other in real life! We’re stoked to spend some quality time together, hack away, and work on taking Staking Facilities as well as Solana Beach to the next level.
Come join us - take the leap and work in crypto
We are seeking support for our HR and operations team. We are looking for a working student as well as a (junior) HR manager to help double down on our people-first approach. While we do not have any other open positions yet, always feel free to check back on our careers page or send an initial application to future@stakingfacilities.com.
Beyond the portfolio - exploring new networks
Even though the market has been tough, there is a relentless drive to build and innovate in crypto. There are many new projects and networks we are currently taking a closer look at:
Aptos
A Layer 1 network built with Move by some former developers of Libra/Diem, Facebooks’/Metas’ failed attempt of building a blockchain network.
We are currently participating in the Aptos Incentivized testnet 3 (AIT3). Mainnet launch is expected sometime after AIT4, the anticipated last instance of their testnets taking place in Q4.
Sui
Similar to Aptos, Sui is a Layer 1 blockchain developed by Mysten Labs, a company founded by former Libra/Diem engineers and heavy contributors to the Move open-source language. We registered for their testnet, which should kick off very soon.
Stride
Stride is a liquid staking solution for the Cosmos/IBC ecosystem. We supported the project through funding via SF Ventures and are currently participating in their testnet, Pool Party (we’re always up for that). Once fully launched, token holders will be able to delegate their tokens to our validator nodes - we will keep you posted on this.
Ecosystem support, research, and development
Running nodes and investing in promising ventures is only part of how we support the web3 space - deepening our roots in various ecosystems as well as helping in R&D is another.
To do so in the Substrate ecosystem and support the bridge infrastructure, we spun up a vault for Interlay, which sets out to build a Bitcoin-backed stablecoin.
Furthermore, we are testing the distributed Eth validator technology by Obol to push the boundaries of decentralization and innovation.
Ethereum
History in the making - merge on mainnet within eyesight
After a successful merge of Goerli and Prater on August 10th, the long-awaited Ethereum mainnet merge is set to happen on September 15th (check here for an updated countdown). The main Ethereum blockchain (execution layer: where all accounts, balances, smart contracts, and blockchain state lives) will merge with Ethereums’ Beacon Chain (consensus layer).
This will ultimately change the consensus layer from utilizing Proof-of-Work to Proof-of-Stake (PoS), which will result in a 99.95% reduction in the networks’ energy consumption according to the Ethereum Foundation.
Did you know that the ETH Merge was the main reasons SF was founded 5 years ago?
So after this long wait, we are really excited that it is finally happening! We will continue to be an engaged Lido validator, are eager to explore as well as support the Ethereum ecosystem post-merge, and are super stoked to produce our first mainnet blocks for Ethereum.
What does The Merge mean for ETH holders?
So far nothing except for staking was able on the Beacon Chain and the entire transactional history with all its accounts, balances, and smart contracts will be merged as well, so, as an Ethereum user, no action is required due to the merge.
If someone reaches out to you and asks you to do anything with your funds in preparation for The Merge, it is a scammer and you should not cooperate in any form!
Delegators might enjoy higher rewards as priority fees (aka tips for miners), as well as Maximal Extractable Value (MEV), are then flowing to validators instead of Miners. Incentives to stake are even higher post-merge as ETH issuance will drop by ~90% (from ~4.6% to 0.49% annually), most likely making ETH deflationary - depending on several metrics such as percentage staked across the network. The same holds true for Lido delegators.
More important notes about The Merge
staked ETH cannot be withdrawn until the Shanghai upgrade (6-9 months out)
it will not reduce gas fees since it is a change to the consensus layer
transactions will not be (significantly) faster due to it
it will result in no downtime of mainnet - Ethereum will continue to run during it
it will not render Ethereum a sharded network right after its implementation
Lido will operate the same way it did prior to the merge and stETH will continue to have the same functionality it has today (more about Lido & The Merge here)
Vitalik Buterins’ ETHCC5 presentation sheds light on Ethereums’ roadmap & progress (“Only 55% done after The Merge”)
Oh and get your popcorn ready: ‘The Infinite Machine’, a book by Camilla Russo, will be brought to theatres - produced by Ridley Scotts’ company, Scott Free Productions - yes, the Ridley Scott. The man behind movies like Gladiator, Alien, or Black Hawk Down.
Solana
More decentralization happening on core infrastructure
Validator client diversity is coming to Solana, which will result in improvements in the networks’ performance, and security as well as its decentralization. Jump Crypto, a division of one of the largest traders (by vol.) in the TradFi space, the Jump Trading Group, is taking on the massive engineering task of building ‘Firedancer’, a second, independent consensus node implementation for Solana.
This technology allows validators like us to come to an agreement on the current state of the network. Which might sound boring to some, but is actually the absolute key for the network to properly function and deliver the key USPs of distributed-ledger technology (DLT).
To our knowledge, until now, client diversity has only been a thing on Ethereum, for which we run four different beacon clients. You can learn about Firedancer here.
Bad PR, good upgrades
As Sam Bankman-Fried noted in an interview for Fortune, Solana got a lot of heat in the past few months for its’ network outages (June, April). The bad PR was partially justified and in the end even beneficial to the network since it lead to upgrades such as QUIC or Stake-weighted QoS, which focus on increasing network stability( more on these here).
However, a lot was just pure FUD as exemplified by the Slope wallet hack at the beginning of August, in which “No core code related to Solana Labs, the Solana Foundation, or anything related to Solana protocol itself was involved in this attack” according to Austin Federa from Solna Labs.
If you are a delegator to Staking Facilities or Solana Beach, who has created his/her wallet through Slope, please make sure to read this article's Mitigation Section’ and always feel free to reach out to us through our Telegram group in case you need support.
Solanas’ ‘iPhone moment’
Solana’s smartphone plans as announced on June 23rd in New York got us pretty excited about the next step of web3 mass adoption. Learn more about it in this Bankless interview, in which Anatoly and Raj described the pathway to empowering a mobile-friendly web3 experience while onboarding the next hoard of developer talent.
Polkadot
Breaking barriers and improving experiences
The staking UX on Polkadot got a lot smoother through the release of the Staking Dashboard (Beta), which provides a seamless, (almost) all-encompassing staking experience for any DOT holder - no matter the technical knowledge. The dashboard is currently in Beta, with many improvements and feature adds on the way. For more, check out this blog post.
Another major improvement to staking on Polkadot is also just a few weeks out, namely the introduction of ‘nomination pools’. These will drastically lower the barriers to stake on Polkadot as they allow DOT holders to pool their funds in order to circumvent the minimum stake requirements of the network. Hence, anyone looking to contribute to the security of the network can now do so - no matter the size of your stake. These pools also allow for optimizing APY by adjusting stake accordingly as well as increasing the max. amount of DOT holders that want to become nominators.
More updates from around the block
One could witness increasing validator commission rates during the past few weeks - most likely due to the market downturn. We decided to do the opposite in order to contribute to Polkadots’ efforts of creating a more inclusive staking experience. Hence, we lowered the commission fee of our Polkadot validators from 8% to 3%.
HydraDX successfully migrated from Snakenet to Polkadot mainnet as a parachain. Hence, the network is now secured by the shared security set of the Polkadot network. Therefore, it is not possible anymore for HDX holders to nominate a specific validator - though no action is required by former delegators.
The Graph
The Graph continues on its path to a multi-chain future
The second chain that is going to be indexed by The Graph network is the EVM-based Gnosis Chain as announced through this Tweet on Aug. 25th.
In the wake of the announcement, The Graph Foundation also introduced the Multi-chain Incentivized Program, or MIP for short, which bootstraps validator nodes in preparation for adding support for new chains coming to The Graphs’ decentralized network such as Gnosis Chain. The MIP formally kicks off on September 20th and runs until the end of Q1 2023, which is also when the hosted service will be sunset, ultimately marking the end of the ‘centralized version of The Graph’. We should also hear a lot more announcements regarding other major networks starting to be indexed by The Graphs’ decentralized network.
Teamwork makes the dream work
All these major achievements and milestones are the fruits of the work of five core development teams behind The Graph: Edge & Node, Semiotics Labs, StreamingFast, Figment, and, since fairly recently, GraphOps. These core teams work on development as well as R&D in the fields of protocol economics and network operations.
Gary and Louis from our team were also able to convince themselves of the thriving ecosystem during their visit to the US for Graph Day. They came back pretty bullish, to say the least.
Cosmos
Cosmonauts ready to take flight
The first cohort of the seven-week interchain developer academy has graduated with applications for the next one already open. The program teaches developers everything they need to know to build within the Cosmos ecosystem - free of charge.
Two birds with one swat
Since proposal 72 passed last month, the Cosmos Hub community pool will allocate 150k ATOM to accelerate the diffusion of Interchain Security and liquid staking.
Interchain Security allows the Hub to leverage its full validator set to secure a number of ‘appchains/consumer chains’ in a parallel execution environment. ‘Appchains/consumer chains’ are use-case-specific smart contracts and by allowing them to leverage the Hubs’ security, developers can go to market quicker as they can primarily focus on developing their contract(s).
P2P, a fellow validator and strong contributor to the Cosmos ecosystem, set out to build a DeFi-specific appchain, that acts as a launch environment for other DeFi-specific chains to utilize Interchain Security - practice what you preach, amen! Eventually, P2Ps’ DeFi chain will host Lido for Cosmos, only if though, the LidoDAO votes in favor of this. For the whole proposal, check out this post.
Skale
The Skaleverse aka Skale V2, which enables Skale chains to not only connect to Ethereum but each other, was successfully implemented. To further streamline and speed up Skalechain-to-Skalechain transactions, Hubs, are implemented as well.
The stats speak in favor of Skale V2: today, Skale can boast more than 20 Skale chains, +4MM transactions ever since genesis, and more than 17k ETH in saved gas fees.
…and as promised:
Pandas on Ethereum!
To celebrate the successful merge of Goerli & Prater (testnets), Eth developers & validators celebrated with some custom ASCII art in the console:
Why Pandas? Well: