Problem Statement
What is wrong with Ethereum staking and LRT's ? As the popularity of Ethereum rises and it becomes more decentralized, Liquid Staking Tokens (LSTs) are becoming increasingly important financial tools. Using EigenLayer restaking capability those LSTs can help secure many services & provide pooled security. To facilitate the restaking, several Liquid restaking tokens (LST) are coming into the market like Puffer’s puffETH, Renzo’s ezETH etc. However, existing solutions present several challenges:
High Gas Consumption: Users have to pay high gas to perform restaking transactions because most of the projects are on L1 (Ethereum).
Inefficient Yield Generation: Users cannot easily combine restaking yields, loyalty points, and DeFi yields in one seamless and convenient solution.
Complex User Experience: Existing solutions often involve cumbersome processes and require manual navigation across various platforms, hindering widespread adoption.
Therefore, there is a significant need for a user-friendly platform that simplifies the restaking process and enables users to maximize their yield opportunities on their staked ETH. DeFcor is creating a one-click conversion from any sort of native or staked ETH to its liquid restaked token called dETH.
Current Process
Example: Alice has 100K worth of USD pegged stable coins and she wants to deploy this money to support Ethereum decentralization and in parallel earn higher yield as well.
The above process for maximizing yields on staked ETH is complex and inconvenient, requiring users to navigate through at least five different platforms as seen in the above process flow. This is especially challenging for newcomers ("non-degen users") who may find the process overwhelming. Despite the promise of Web3, current liquid staking and re-staking platforms for Ethereum present a significant hurdle for many investors. These platforms are entangled in a web of complexities, starting with the web3 interfaces are notorious for being clunky and unintuitive, further hindering user adoption. Adding to the challenge is the high entry barrier – staking on Ethereum often requires a hefty 32 ETH, a significant investment out of reach for most users. Even if you can meet this barrier, your ETH often becomes locked away for extended periods, limiting your flexibility. Ethereum's high gas fees further complicate the picture, forcing users to pay a premium for each transaction within the already multi-step process. This process often involves multiple conversions and additional steps for restaking, creating a cumbersome and error-prone experience. These complexities act as a major deterrent, hindering the accessibility and overall appeal of liquid re-staking platforms.
Challenges of Running an Ethereum Validator
Operating an Ethereum validator node presents a significant set of hurdles. Here are some key difficulties potential validators face:
High Capital Barrier: Running a validator necessitates a substantial initial investment of 32 ETH. This can be a significant barrier for many participants who wish to contribute to the network's security.
Infrastructure Demands: Maintaining a robust and resilient infrastructure is crucial for validator operation. This includes ensuring reliable hardware, software, and internet connectivity. Any downtime can lead to penalties and lost rewards.
Strict Uptime Requirements: Validators must maintain near-constant online availability (ideally 100%). Network security relies on validators consistently proposing and attesting to blocks. Offline validators are penalized and hinder the network's efficiency.
Secure Key Management: Protecting validator keys is paramount. Compromised keys can have devastating consequences, including loss of staked ETH and potential network disruption.
In addition to these challenges, client bugs and unforeseen technical issues can further complicate validator operation.
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