Motivation
DVT (Distributed Validator Technology) enhances the decentralization and security of ETH staking. Currently, SSV DVT integration into StaFi has been deployed on the mainnet, and SSV has launched the Mainnet incentive program. Additionally, the successful completion of SSV Grants Milestone 3 requires the operation of 25 validators on SSV.
To drive the adoption of SSV within StaFi, and acquire more ETH staking, the core team proposes the following measures:
- Staking treasury ETH in StaFi.
- Applying for approximately 400,000 FIS from the DAO treasury to incentivize new ETH staking and facilitate ETH exchanges.
- Migrating a portion of the existing trust node validators run by the foundation to SSV.
Specification
The SSV grants program consists of three milestones:
- Testnet integration and launch, $10,000 SSV token.
- Mainnet integration and launch, $10,000 SSV token.
- Running 25 validators on SSV, $20,000 SSV token.
Currently, two milestones have been completed and one has been accepted. To further drive SSV adoption and complete the grants program, new ETH staking is needed in StaFi.
StaFi will acquire new ETH through the following methods:
Firstly, 5% of the rewards obtained from users’ ETH staking in StaFi will be allocated as a commission fee to the DAO treasury. This amounts to approximately 101 ETH, which can run 3 validators. Extracting this portion and staking it in StaFi requires development efforts and contract upgrades. To support this quickly and complete the acceptance and rewards of grants milestone 2, approximately 360,000 FIS will be needed to exchange for 64 ETH(taking into account the pool’s buffer of 32 ETH).
Secondly, ETH staking incentives can be used to quickly acquire new ETH for staking. Based on past statistics, around 38,000 FIS can acquire approximately 330 ETH staking, equivalent to approximately 10 validators. However, this incentive also has its tradeoff, as the withdrawal option is currently available. This means that newly acquired ETH may be withdrawn by users after they receive the incentive.
Lastly, if the quantity is still insufficient, migrating existing trust node validators run by the foundation to SSV will be considered.
Economically, although the DAO treasury needs to allocate FIS, it can be compensated through SSV grants and incentives. Upon completing grants milestone 3, $20,000 worth of SSV tokens will be added to the DAO treasury. Additionally, the SSV mainnet incentive will continue until September next year. If each validator receives an average median of 51.14 SSV tokens per month, and considering 25 validators running for 10 months, approximately 12,785 SSV tokens will be obtained. Based on a valuation of $13/SSV token, this amounts to approximately $170,000, which will also be added to the DAO treasury. The income from these two sources will exceed the expenditure of 400,000 FIS. Thus, from an economic standpoint, this approach appears viable, disregarding the costs associated with SSV network fees and operator fees.
Action
If this proposal undergoes thorough community discussion without any objections, the DAO will stake the treasury ETH in StaFi and allocate 400,000 FIS from the DAO treasury for ETH staking incentives and exchanges. If the aforementioned measures still cannot meet the requirement for 25 validators, the remaining quantity will be migrated from the some of the trusted validators run by the foundation to SSV as a last resort.
Vote
For: Support StaFi DAO to stake the treasury ETH in StaFi and allocate 400,000 FIS from the DAO treasury for ETH staking incentives and exchanges.
Against: Do nothing.
Please read the full SIP here.
