SF Newsletter - September Issue
A multi-chain future, bridges, blackouts, breakpoints and much more!
Welcome to our September issue!
Man, time flies when you're having fun, doesn't it?! It's October already and a lot has been happening within the realm of our portfolio projects as well as the overall crypto space. So let's not waste any more of your precious time and jump right into our September issue!
Composition of USD amount staked at Staking Facilities
Solana continues to make up the biggest share of USD amount staked with us, followed by Ethereum 2.0. We currently record a total USD value of 2,09 billion of assets staked with us.
Percentage staked across the whole network
The percentage of staked assets across the whole networks of each of our portfolio projects largely remains the same. To our surprise, one can see a slight increase for Polkadot, despite rumors that parachain auctions are coming to Polkadot soon.
Nominal vs. Real APY of each network
This chart compares the Nominal & Real APYs across our portfolio networks as well as how these figures have changed since the last issue. For most of the networks, we provide you with a precise reward calculator, which you find on the subpage of the respective network on our homepage. Please note that the calculator is not available on mobile devices.
Ethereum - Bridges, not walls
At Staking Facilities, we've been convinced of a multichain world ever since our inception. With Wormhole v2 now live since September 19th, this world has manifested itself further. Wormhole allows users to bridge tokens, NFTs, as well as metadata from any supported blockchain to another. As of today, the Wormhole protocol supports Ethereum, Solana, Terra, and BSC. If you want to learn more about Worm, check out the latest Chorus One podcast with Hendrik Hofstadt, a core contributor to Wormhole.
Now October will mark yet another important month for Eth2 as Altair, the first mainnet upgrade for Ethereum 2.0's Beacon Chain is set to take place on the 27th. Altair is a major step towards 'The Merge' as it "brings light-client support to the core consensus, cleans up beacon state incentive accounting, fixes some issues with validator incentives, and steps up the punitive params as per EIP-2982." (Danny Ryan, researcher at the Ethereum Foundation).
Lido continues to be the go-to solution for anyone looking to stake their ETH. Roughly 1,28 million out of a total of 7,76 million staked ETH came through Lido. This number is likely to grow as users can now stake ETH via Lido through the Ledger Live app - can't get much easier than that! Learn how to here.
We reported on Ethereum's DeFi dominance in our last issue and for many, UniSwap is the show pony here as it probably is the most popular Decentralized Exchange ('DEX') out there. However, recently, dydx, another DEX built on top of Ethereum, surpassed Uniswap in terms of trading volume - you can learn more here.
Solana - Back to business as usual
The Solana network suffered from a denial of service attack on September 14th. This resulted in a network outage that lasted around17 hours. Despite the network being offline, no funds were lost. A legion of bots tried to participate in Grape protocols’ IDO and flooded the network with transactions. This caused a memory overflow, which ultimately led to a bunch of validators crashing and going offline. Hence, the validators could not come to an agreement on the current state of the network and so that no new blocks were able to be confirmed.
The globally distributed validator community worked together with Solanas’ engineering team to facilitate an upgrade and restart of the network, which required 80% of active stake to form consensus. Since Solana is a decentralized network with over 1,000 validator nodes on Mainnet beta, this process took roughly 14 hours. The network was back to full functionality in less than 18 hours after the attack. For more details about this, you can refer to this blog post by Solana.
We want to thank the validator community as well as the Solana team for coming together and working hard to resolve this as fast as possible. Mainnet Beta earned its' Beta tag and was battle-tested once more - we're confident that the network is now stronger than before!
On September 8th, Lido for Solana went live on Mainnet Beta. There are already more than half a million $SOL that have been staked via Lido and $stSOL, the liquid staking derivative for staked $SOL, has been integrated into major Solana DeFi projects such as Saber, Raydium, and Serum. Lido was in good company as Socean, another liquid staking solution for Solana also launched on Mainnet Beta on that day. As of the time of writing (30/09), there are ~414k $SOL staked via Socean for which delegators receive $SOCN. And since all good things come in threes, Marinade Finance, which launched in August, is close to record 2.5 million $SOL being staked via its' liquid staking solution.
We couldn't be happier about the fact that liquid staking is gaining such tremendous adoption and that there are numerous, serious providers on the market. With more than 1000 validators now active on Mainnet Beta, these providers also help tremendously with increasing the 'Superminority' of the Solana network by spreading stake across different validators.
The Graph - The future is now
The Graph Improvement Proposal (GIP) to reduce the curation tax from 2.5% to 1% in order to make it less costly for subgraph developers to upgrade subgraphs has recently been voted on by the community after a thorough discussion on The Graph forum. It's important to have taxation in place since anytime the subgraph is updated, Indexers have to re-sync that subgraph, which is computationally heavy. The tax incentivizes developers to manage the upgrades in the most efficient manner as their cost structure is better aligned with those of the Indexers. With an outcome of 99% in favor of the proposal, it is clear that the community would welcome this tax reduction. It is now up to The Graph council to vote on the inclusion of the GIP into the protocol.
Since the launch of the Subgraph Studio in July, more than 180 subgraphs have migrated from the hosted service to The Graphs' permissionless network. Just two months after curation went live, one can find an average of 33 curators per subgraph that are indexed by 4.4 indexers on average. In total numbers, the decentralized network of The Graph attracted more than 2000 curators, 7000 delegators, as well as 160 indexers that together compose a decentralized, multi-stakeholder economy for blockchain data - welcome to the future! You can find more interesting updates in this blog post by The Graph foundation.
Substrate - Parachains coming to Polkadot ... soon?
Since our last issue, the second batch consisting of five parachain auctions for Kusama successfully kicked off. The batch will conclude on October 6th. However, via motion 362, the community decided that there was room for an eleventh auction to take place immediately after auction ten ends. As of today, ~20% of total Kusama issuance are locked in crowdloans or parachain slots while ~63% are being staked across a set of 297 validators. Kusamas' multi-chain network is thus coming along nicely.
The winners of the most recent auctions include the 'real-world' asset tokenization platform, Altair (Centrifuges' canary sister); the cross-chain liquidity protocol, Basilisk (HydraDXs' canary sister) as well as the plug-and-play privacy-preservation network, Calamari Network (Manta networks' canary sister) and Kilt, an identity protocol for issuing self-sovereign, anonymous, verifiable credentials.
If you have participated in the HydraDX LBP, which concluded in February and a raise of 22m DAI to bootstrap initial liquidity for HydraDXs omnipool, you might want to carefully read this blog post. In it, the HydraDX team lays out their plans to draft a proposal to "retroactively increase the distribution of tokens to HDX LBP participants from 5% up to 15% of the total HDX supply. To achieve this, triple (3x) all HDX wallet balances resulting from LBP purchases, staking rewards, and treasury payouts." More information about this is expected to be published within the next two to four weeks according to the team.
In a recent interview with crypto-influencer, Chico Crypto, Gavin Wood, the co-founder of Polkadot, said that parachains should come to Polkadot fairly soon. According to Polkadots' Twitter, parachains would launch once two things have happened: a) auctions have been tested on Kusama (I think it's fair to say that this box can be ticked) and b) a full external audit on the codebase has been completed. Dr. Wood dropped during the interview that b) is only a couple of days out and that it's then up to governance to initiate the launch process for parachains.
Cosmos - EVM compatibility for the Internet of Blockchains
Evmos, formerly know as Ethermint, which will bring EVM-compatibility to the Cosmos ecosystem, recently announced in a Twitter thread that they will launch by the end of the year: "Evmos will be an application-agnostic chain that will be interoperable with the Ethereum Mainnet, EVM-compatible environments, and other BFT chains via IBC, making it easy for users and developers to easily move value between chains." Back in April, a proposal (#44) passed to grant funding in the amount of 100k ATOM from the Cosmos Hub to the team behind Evmos, Tharsis, so that they can build out the project.
Just five months after IBC launched on mainnet, there are already 13 interconnected blockchains constituting Cosmos' 'Internet of Blockchains'. The most active zones are Osmosis, the Cosmos hub, as well as Akash. Based on the past 30 days of network activity, most transfers currently take place between Osmosis, which we reported on in our June issue, and the Cosmos hub. You can watch the network live in action on the 'Map of Zones' Cosmos network explorer.
Dfintiy - Bringing Digital Gold onto the Internet Computer
Just two days after a proposal that called for starting the work on the 'Direct Integration of the Internet Computer with the Bitcoin Network' was submitted to the developer forum, it passed with a 96.55 % approval rate of any Neuron holder that voted. Since this was a motion proposal, the outcome does not actively change the ICPs' code. According to the Dfinity Foundation and the proposal, once put into action, it will 'provide smart contracts that can natively hold, send, and receive Bitcoin (without the need for bridges or private keys) through an application of Chain Key cryptography, which will directly integrate the networks.' You can read more here.
Skale - through the eyes of an Etherean
Consensys published a framework that helps users and developers with analyzing any Ethereum scaling solution by answering four core questions: 1) Who operates it? 2) How’s the data? 3) What’s the stack like? 4) How does it prepare for the worst? In this post, Jame Beck from Consensys shares his findings when applying the framework to Skale.
Meet our content marketing lead, Glenn
We've secretly onboarded another crypto enthusiast past month, namely Glenn, who joined our ranks as content marketing lead. Glenn came across Staking Facilities through Solana Beach. Funnily enough, Glenn grew up just fifteen minutes away from the actual Solana Beach - some things are just meant to be! He has a science background, entrepreneurial as well as agency marketing experience and will bring a varied perspective to the growth initiatives here at Staking Facilities.
Staking Mondays with our CEO, Wolfgang
Wolfgang, our CEO, and co-founder was a recent guest at 'Staking Mondays'. The show is hosted by the awesome folks from Staking Rewards and covers all things staking. During the 45 min conversation, Wolfgang and Ken, the host of the show, spent most of their time talking about Solana and how it is different from other Layer 1s such as Ethereum, Polkadot, or Cosmos. They also covered why the somewhat higher hardware requirements for running a Solana validator node could actually be good for the network, how Solana reached escape velocity in record speed as well as a multi-chain future consisting of different layer 1s that make different trade-offs while still finding product-market fit. Make sure to subscribe to Staking Mondays on YouTube or Spotify to start your week with expert insights on the thriving staking economy!
Staking Economy Lunch in Lisbon
Speaking of the staking economy, the team behind the eponymous newsletter, Staking Economy, is hosting an in-person lunch meeting during Solanas' Breakpoint conference. So if you are in town during Breakpoint, make sure to stop by! For more details, please refer to join the Staking Economy Telegram channel.
I spent a reasonable amount of my free time on Twitter and while one can waste quite a bit of time scrolling through a bizarre mixture of hype and FUD, there are a few gems to be found here and there - depending on who you're following of course.
It's quite easy to lose track of the bigger picture when investing in the crypto/blockchain space, so I'd like to use this issue's deep dive, to share a 'Twitter gem' that I found while keeping myself from falling asleep. These threads are perfect for all of us to recollect and remember why we're all here for, namely the next evolution of the internet - or, in short, web3.
Chris Dixon from a16z crypto put together an excellent thread titled 'Why Web 3 matters' - here are a few takeaways: While web1 was all about open protocols, decentralization, and community governance (sound familiar?!), the current, predominant web, namely web2 is about siloed, centralized services that are operated by platform monopolies such as Google, Amazon, or Facebook. Web 3, which we're at the cusp of, is taking the best of both worlds, which is the 'decentralized, the community-governed ethos of Web 1 with the advanced, modern functionality of Web 2'.
He points out that centralized platforms have a predictable lifecycle. They first try to attract users, developers, and entrepreneurs for the sake of network effects. As they move along the s-curve (y: growth; x: attract/cooperate → extract/compete), they become more powerful over their users, developers, and entrepreneurs. As they get close to the top of the curve, there is a zero-sum game since growing further would require them to extract data from their users and compete with devs & entrepreneurs building on the platform. He lists Microsoft vs. Netscape, Google vs. Yelp, Facebook vs. Zynga, Twitter vs. its 3rd-party clients, and Epic vs Apple as famous examples for this. This extractive behavior has stifled innovation as devs, entrepreneurs and investors grew increasingly wary of centralized platforms.
Now in web3, in which tokens provide its' stakeholders with property rights al while removing the reliance on a centralized party, 'can own pieces of internet services by owning tokens, both non-fungible (NFTs) and fungible.' These tokens can be anything - code, art, tickets, access or voting rights, credentials, identities - you name it! They exist on top of blockchains that Chirs calls 'decentralized global computers' that are owned and operated by their users. Anyone can access them, while no one owns them (I'd personally say that anyone owning a token, also owns a piece of these computers.) Tokens are a vehicle to align the incentives of every participant of the network and overcome the core problem of centralized networks, 'where the value is accumulated by one company, and the company ends up fighting its own users and partners.’
‘Another Ethereum mining pool forced to close due to China crackdown’ (read)
Share this with someone who's just starting out on their crypto journey
Jeremy Allaire, co-founder of Circle: ‘What you can do with a programmable dollar on the internet’