Tag: Lido

Ethereum Founder Vitalik Buterin Proposes Tweaks to Improve Decentralization and Reduce Consensus Overhead

by Blockchain News

Vitalik Buterin, the founder of Ethereum, has recently proposed a series of changes aimed at improving the network’s staking model. The primary objectives are to enhance decentralization and reduce the computational burden on the consensus layer. The proposal comes as Ethereum faces challenges related to centralization risks and the sheer number of signatures required for consensus. Buterin’s proposal could potentially revolutionize the way staking and consensus are approached on the Ethereum network, making it more accessible and efficient.

In the current Ethereum staking model, there are two types of participants: node operators and delegators. Node operators are responsible for running nodes and providing collateral, usually in the form of ETH. Delegators, on the other hand, contribute some amount of ETH but are not required to participate in any other way. This two-tiered staking model has been popularized by staking pools like Rocket Pool and Lido, which offer liquid staking tokens (LSTs). However, Buterin identifies two main issues with this system. First, there is a centralization risk in the mechanisms for choosing node operators, which are either not very decentralized or have other flaws. Second, the Ethereum Layer 1 verifies approximately 800,000 signatures per epoch, a number that could increase, thereby adding a significant computational load to the network.

To address these issues, Buterin suggests that delegators should have a more meaningful role in the network. He outlines two classes of solutions: delegate selection and consensus participation. In the delegate selection model, delegates could choose which node operators they want to support, thereby having a “weight” in the consensus. This would give them more power and make the network more decentralized. In the consensus participation model, delegators could be given a lighter role in the consensus process, which would act as a check on node operators. This would allow more people to participate in the network’s validation process without taking on the full responsibilities and risks of being a node operator.

Buterin also provides concrete implementation ideas for these solutions. One such idea is to allow each validator to specify two staking keys: a persistent staking key (P) and a quick staking key (Q). These keys could be used in various ways to improve the consensus mechanism and reduce the number of required signatures. For example, the protocol could require both the node and a randomly selected delegator to sign off for a message from a node to count.

In conclusion, Buterin’s proposal aims to achieve two main objectives. First, it seeks to empower those who do not have the resources or capability to solo-stake to participate meaningfully in the network. Second, it aims to reduce the number of signatures required for consensus to around 10,000, thus aiding decentralization and making it easier for more people to run a validating node. These changes could be implemented at different layers, including within staking pool protocols or as part of the Ethereum protocol itself, offering a flexible approach to improving the network’s staking model.

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This Week Unlocks: ApeCoin Surpasses $50M, Aptos Exceeds $20M; Moonbeam, Flow, and Lido in Queue

by Blockchain News

Data from Token Unlocks indicates that six cryptocurrency projects are set to release a significant number of tokens this week. Among these, ApeCoin (APE) and Aptos (APT) are poised for substantial unlocks.

On September 11 at 08:00 (UTC), Moonbeam will release 9.7 million GLMR tokens, valued at approximately $1.74 million. This constitutes about 1.34% of its circulating supply.

Following closely, on September 12 at 08:00, Aptos is set to unlock 4.54 million APT tokens. With an estimated value of $23.85 million, this represents nearly 2% of its circulating supply.

On September 13 at 11:33, Lido will make available 1.5 million LDO tokens, amounting to a value of roughly $2.22 million, which is about 0.17% of its circulating supply.

Euler, on September 14 at 07:17, will release 150,000 EUL tokens. These tokens are valued at approximately $400,000, making up 0.83% of its circulating supply.

On September 16 at 08:00, Flow is set to unlock 7.29 million FLOW tokens. With a valuation of around $3.09 million, this represents 0.70% of its circulating supply.

Lastly, on September 17 at 08:00, ApeCoin will unlock a staggering 40.6 million APE tokens. Valued at an estimated $51.6 million, this constitutes a significant 11.02% of its circulating supply.

This week, significant token unlocks are set to impact the crypto market. “Unlocking” in the cryptocurrency world refers to the release of tokens that were previously locked or restricted from being sold or transferred. Such restrictions are often set during initial offerings or as part of vesting agreements to stabilize token prices and incentivize long-term holding. These unlocks can influence market dynamics, as a sudden increase in available tokens might affect supply and demand.

About ApeCoin ($APE)

ApeCoin, an ERC-20 governance and utility token, operates within the APE Ecosystem, promoting decentralized community building in web3. Governed by the ApeCoin DAO, holders decide the utilization of the ApeCoin DAO Ecosystem Fund. The APE Foundation, inspired by Yuga Labs’ Bored Ape Yacht Club, oversees the APE Ecosystem, with an administrative council executing DAO decisions. Unique for its governance capabilities, ApeCoin facilitates participation in the DAO and offers exclusive ecosystem access. With a fixed supply of 1 billion tokens, 30.25% were in circulation as of March 17, 2022, set to increase over 48 months.

About Aptos

Aptos, a Layer 1 Proof-of-Stake blockchain, utilizes the Move programming language, designed by Meta’s Diem engineers. Aiming for mainstream web3 adoption, it supports DApps addressing real-world issues and boasts a potential 150,000 tps via parallel execution. After securing $350 million in funding from notable investors like a16z, FTX Ventures, and Binance Labs, its valuation reached $4 billion by September 2022. Aptos’s mainnet launched in October 2022. The native currency, APT, has a total supply of 1 billion, with a current circulation of 130 million. Distribution includes allocations for community growth, core contributors, and investors, with specific vesting schedules.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Lido Launches Layer-2 Ethereum Staking And 150,000 LDO Tokens In Rewards

by Blockchain News

Lido is now on layer-2 solutions, Arbitrum, and Optimism, and would allocate 150,000 LDO tokens in rewards per month from Oct 7 for wstETH across each network.

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According to Lido, expanding its services to layer-2 blockchains would better enhance the accessibility of Ethereum staking while also reducing gas fees. 

Unlike traditional staking, where stakers can’t withdraw until their staking period lapses, Lido Finance is a liquidity staking platform that provides flexibility for stakers. It allows stakers to withdraw their staked tokens whenever they want. 

Lido’s first phase of Layer-2 rollout enables the bridging of Lido’s Wrapped Staked Ether (wstETH) token to the two supported L2 networks while preserving the unique properties of stETH in the process.

stETH is the Ethereum liquid staking token Lido gives to stakers when they stake. In opposition, wstETH is the wrapped version that ensures a fixed balance of stETH for use in decentralized finance (DeFi) applications that require a constant balance mechanism.

With plans to issue out the 150,000 LIDO tokens as rewards, the protocol said the aim behind this initiative is to build wstETH liquidity for liquidity mining incentives on DeFi partners, including Beethoven, Balancer, Curve, Kyber Network, and Velodrome.

Notably, Lido’s plan to expand to L2 networks was initially revealed in July when the team admitted that in the future, a large portion (if not a majority) of economic activity and transaction volume would migrate to both general use and purpose-specific Layer 2 networks.

In addition, both layer-2 networks Lido first chose to deploy to have an 80% market share between them. According to L2beat, Arbitrum leads with a 50.68% market share and $2.38 billion in total value locked (TVL), and Optimism follows with a 30.68% share and a $1.44 billion TVL.

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Rocket Pool delays launch after vulnerability discovered by rival

by Cointelegraph

Eth2 staking provider Rocket Pool has postponed its launch after a possible exploit was identified in the protocol’s code.

On Oct. 6, Rocket Pool announced the postponement while the team implements a fix for the bug. Rocket Pool tweeted that “relatively minimal” changes are required to patch the vulnerability and that a new launch date will be announced soon.

Rocket Pool was alerted to the vulnerability by Dmitri Tsumak, the founder of rival staking provider StakeWise.. After Rocket Pool confirmed the bug was valid, the two teams notified another Eth2 staking project, Lido, that the vulnerability also posed a risk to its protocol as well.

Lido acknowledged the bug via Twitter on Oct. 5, proposing a vote to lower staking limits for all node operators in a bid to minimize the risk posed to the protocol. Lido described the potential impact of the exploit as “low,” adding that “the vulnerability can only be exploited by the currently whitelisted Lido node operators.”

“A long-term fix is being developed in parallel and more information will be shared when it is out of a draft stage,” the team added.

StakeWise publicly announced Tsumak’s role in identifying and reporting the possible exploit to its rivals, asserting: “Even when dealing with our competitors, the more secure we are collectively, the stronger the entire ETH2 staking ecosystem becomes.” Rocket Pool also tweeted a commitment to shared network security.

Eth2 staking services

As Ether deposited to the Eth2 staking contract cannot be withdrawn until Ethereum’s forthcoming chain merge has been completed, many investors have turned to providers offering liquid staking services. Liquid staking allows tokens representing the value of staked assets to be utilized in decentralized finance without requiring the underpinning assets to be unstaked. Eth2 staking services also enable users with less than the 32 ETH minimum, to stake in pools.

Related: Staking on Ethereum 2.0, explained

According to StakingRewards, Eth2 currently ranks as the third-largest Proof-of-Stake network with a staked capitalization of $27.3 billion despite only 6.55% of supply being locked up.

By contrast, more than 70% of the circulating supply of the two-largest networks by staked capital has been locked up, with the $60.5 billion worth Solana (SOL) and $51 billion worth of Cardano (ADA) currently staked representing 77% and 70.5% of the projects’ respective circulating supplies.