Solution
As the Ethereum ecosystem expands and the shared security model gains traction, the amount of staked Ethereum is projected to rise significantly. Currently, with a market cap of $500 billion, Ethereum has roughly $123 billion staked (representing 26.31%). This number is expected to climb due to the introduction of projects like EigenLayer. We've already seen a rapid increase in EigenLayer's locked-in value, reaching $10 billion within just a few months. With the launch of EigenLayer and other protocols built upon it, Lido's market dominance is likely to decrease, fostering greater decentralization within the Ethereum ecosystem.
DeFcor Solution
DeFcor simplifies access to liquid staking on the Ethereum network through its innovative protocol built on EigenLayer. This permissionless platform offers capital efficiency and unlocks the potential of liquid rewards for users. DeFcor eliminates the complexities of converting various financial assets by offering a one-stop solution. Simply deposit any supported asset, and DeFcor will handle the conversion process, providing you with dETH, a liquid representation of your staked Ethereum. This streamlined approach removes the technical barriers often associated with DeFi participation.
DeFcor aims to address the numerous pain points currently faced by users participating in liquid staking. This encompasses a wide range of issues, including:
Unintuitive User Experience (UX): DeFcor seeks to streamline the often complex and confusing interfaces prevalent in many existing liquid staking platforms.
High Gas Fees: By optimizing processes and allowing the minting of dETH on L2, DeFcor aims to minimize the gas fees associated with restaking and other DeFi activities within its platform.
Loyalty Point Challenges: DeFcor intends to create a seamless system for users to earn and manage loyalty points associated with their restaking activities, eliminating the current complexities.
DeFcor's solution reduces the multi-step process illustrated in the aforementioned figure into one step as shown in the below figure.
Decentralize Validator Technology (DVT)
DeFcor is going to leverage the DVT technology to remove all the pain points discussed here.
DeFcor leverages Diversified Validator Technology (DVT) to enhance the security and resilience of the Ethereum network's proof-of-stake consensus mechanism. Traditional staking providers often operate validators with homogenous configurations (same client software, hardware, etc.). This approach poses a significant risk, as a critical bug in a single client software version could potentially impact a large portion of validators, potentially jeopardizing network liveness.
DVT mitigates this risk by promoting diversification across validator configurations. This can be achieved by:
Client Diversity: Deploying validators with different client software implementations reduces the impact of a single client bug.
Hardware Diversity: Utilizing a variety of hardware configurations strengthens the network's resilience against hardware-specific vulnerabilities.
Geographical Diversity: Distributing validators across diverse geographical locations minimizes the impact of regional outages or regulatory restrictions.
By promoting diversification, DVT offers several key benefits to the Ethereum network:
Enhanced Decentralization: DVT fosters a more decentralized validator landscape, reducing the reliance on any single provider or configuration.
Improved Network Liveness: Diversification helps ensure the network remains operational even if a specific client software or hardware encounters issues.
Increased Fault Tolerance: DVT builds in redundancy by enabling validators to continue functioning even if some components experience failures.
Minimized Slashing Risks: Diverse configurations make it more difficult for malicious actors to exploit vulnerabilities and trigger validator-slashing penalties.
Reduced Downtime: Diversification helps mitigate the impact of downtime events on individual validators, promoting overall network uptime.
Strengthened Security: DVT discourages the concentration of validator keys in a single location or under a single provider, enhancing overall key management security.
Through DVT, DeFcor actively contributes to a more secure, decentralized, and robust Ethereum staking ecosystem.
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