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The most frequently asked questions
- StakeWise uses cloud infrastructure that scales automatically according to demand:
- When the Beacon Chain applications start to use more RAM or CPU, they are migrated to more powerful servers with zero downtime for the validators.
- Whenever more validators and Beacon Chain applications must be launched and current servers do not have enough capacity, the new servers are started.
- Our unique cloud operator is capable of creating and maintaining validators with no human involvement:
- For each new validator, it finds the server with the most available resources or creates a new one if all the resources are used up.
- When a new version of the validator application is released, the operator upgrades all the validators with close to zero downtime while ensuring full slashing protection.
- We run our applications with both external and local slashing protection enabled all the time and make sure that the validator's database persists across restarts (whenever the validators are upgraded to a newer version).
- To prevent penalties, we run beacon and ETH1 nodes with failover enabled. If a server crashes, all the validators will re-establish the connection with a different beacon node located on another server.
- We invested a lot in the monitoring of our performance on an attestation/proposal level. This allows us to always be aware of any anomalies happening with the applications we are running. For that, we use alerts, Prometheus, and Stackdriver.
- Yield-maximizing Pool offering - built on top of a bulletproof setup, our Pool charges competitive fees and tokenizes deposits and rewards separately to maximize staking returns for its users. If you prioritize yield, liquidity of your stake, and access to profit maximization opportunities in DeFi, this Pool is for you.
- Tailored (non-custodial) Solo offering - packing a resilient infrastructure, our Solo staking is a winning combination of stable performance, intuitive validator management tools, and DAI-based service fee, created for returns-conscious stakers who don't compromise on security.
- Strong track record - by running in public beta for over half a year (Medium article) and successfully testing our ability to stake over 200,000 ETH in various testnets, we have done more than most to stress-test and perfect our system. We use this experience to run an extremely resilient infrastructure in Phase 0 and beyond.
- The Pool represents a network of validators run by StakeWise.
- For every 32 ETH collectively deposited in the Pool by users, StakeWise creates a new validator and adds it to the network.
- The rewards generated by these validators are shared among users proportionally to their ETH contribution in the Pool.
- There are no prerequisites to start - you can stake from as little as 1 wei.
- StakeWise tokenizes both deposits and rewards earned by those staking in the Pool. We mint sETH2 (staking ETH) and rETH2 (reward ETH) that represent users' deposits and rewards in a 1:1 ratio.
- As long as you hold sETH2 that represents your deposit, rETH2 will accrue on your address as a reward from staking.
- We charge a flat fee of 10% on the rewards earned by the Pool.
- We split the withdrawal key into multiple parts and use Shamir's secret sharing to require a threshold of signatures to be submitted for transferring the validators' balances back to the users. The withdrawal key parts are distributed among different trusted entities and stored in cold storage according to the best security practices. Read more about our Horcrux mechanism.
- You accrue rETH2 (staking rewards) as long as you hold sETH2 in your address. Hence, the amount of rETH2 that accrued in your address is the amount of staking rewards you have earned with the StakeWise Pool.
- Before Phase 2: use protocols like Uniswap, Sushi or Curve to exchange sETH2 and rETH2 into other assets.
- Upon Phase 2: burn your sETH2 and rETH2 in the StakeWise app to redeem your ETH deposit and reward.
- Solo enables stakers to leverage StakeWise's bespoke infrastructure and validator management tools to run solo validators and use their own withdrawal credentials to remain in the sole custody of the validators' funds.
- StakeWise uses submitted withdrawal credentials to register validators and handles the complex task of running them on users' behalf to maximize the rewards.
- Users are charged a monthly fee per each validator they run, payable in DAI.
- Yes, it is. You remain the sole custodian of your withdrawal key and validator's balance when creating a validator with Solo.
Only the holder of the withdrawal key will have access to the validator's balance upon Phase 2. Make sure to store your withdrawal key securely to avoid losing access to your funds.
- Please follow our guide linked below.
- StakeWise is committed to the highest level of transparency, which is why users can have a look at our Solos smart contract. This smart contract does all the work of getting the deposit from the user (see
addDeposit) and registering the validator for it (see
- If StakeWise were to use some other withdrawal credentials for generating deposit data, it would get rejected by the validator registration contract. This is because it would calculate the deposit data root that does not match the root generated with the user's withdrawal credentials.
- We cannot tokenize your Solo stake, because it is only possible with custodial staking as of today.
- There is a fee of 10 DAI ($10) per validator per month, payable using our automated billing system.
- When using StakeWise Solo, you will be asked to pay 10 DAI per validator every month.
- If your bill has not been paid, StakeWise will continue running your validators until you have 2 unpaid monthly bills. If that happens, we will be forced to exit your validators from the network. It will lock up your validator's balance on the Beacon Chain until Phase 2.
- Hence, we recommend you to top-up the billing account immediately after your newly created validator starts staking and avoid having unpaid bills on your account.
- Please follow our guide linked below.
- The validator keys are stored in an encrypted database that can only be accessed by the validator clients.
- We will provide you with the instructions on how to withdraw your validator's balance once Phase 2 is released.
- Withdrawal of deposit and rewards before Phase 2 is not supported by the ETH2 specs.
- An interface that provides the option to Exit your validators in batch or individually will become available soon.
Remember that your deposit and rewards will not become withdrawable until Phase 2 even if you request an exit for your Solo validator.
- At the moment, there is no secure way to transfer the validator keys from StakeWise to users, so this feature is not supported. However, we are working to find a secure way to do this and will update you on our progress as soon as possible.
- It is a remarkably simple solution. When you make an ETH deposit into StakeWise Pool, we will issue you sETH2 (staking ETH) tokens that represent your deposited ETH always 1:1. And whenever our Pool earns new rewards, you will receive rETH2 (reward ETH) tokens that represent your ETH rewards also 1:1. Both tokens are built on the ERC-20 standard, which means that sETH2 and rETH2 can be sent, exchanged, and transacted with like ETH itself or any other ERC-20 token.
- At all times the total amount of tokens that have been issued to users is sETH2 + rETH2 = ETH deposits + ETH rewards * (100% — 10%), where 10% is StakeWise commission.
- We issue tokens that represent your stake on the Beacon Chain to give liquidity to the funds that you would otherwise have locked up for several years.
- The easiest way to think about it is to imagine that your stake is a company and each token is a share in that company. In the same way that a share represents ownership in the company and can be stored, transferred, or sold, each token will represent ownership of ETH in your stake and will become transferable and tradable for ETH and other assets via liquidity pools on platforms like Uniswap, Sushi or Curve.
- The owner of tokens will have the right to exchange them into an equal amount of ETH on StakeWise upon Phase 2.
- We believe tokenized staking is an elegant solution for ensuring the liquidity of your stake before Phase 2. It also allows you to boost staking yield by 1) potentially taking advantage of compound interest, 2) earning additional fees from becoming a liquidity provider in protocols like Uniswap, Sushi or Curve, 3) potentially using your stake as collateral for borrowing in protocols like Aave.
- Imagine you deposit 10 ETH into StakeWise Pool at the beginning of Year 1. You will immediately receive 10 sETH2 that represent the 10 ETH you deposited. In under 24 hours rETH2 token will be minted for you. Over time, the balance of rETH2 will grow to represent the growth of your stake in ETH 1:1.
- Assuming the annual gross yield in the ETH2 network is 22%, your stake in the Beacon Chain will grow to 11.98 ETH (where 10 ETH is your initial deposit and 1.98 ETH is a reward after deducting 0.22 ETH of StakeWise commission) by the end of Year 1. In tokens, you will have 10 sETH2 and 1.98 rETH2, ie exactly 1:1 reflection of your staking balance.
- By the end of Year 2, your stake will have grown to 13.96 ETH (after deducting StakeWise commission). In tokens, you will have 10 sETH2 and 3.96 rETH2.
- In Phase 2, the tokens can be exchanged directly for ETH at a 1:1 ratio within StakeWise app.
- No. You will always be earning ETH when staking with us — the record of these rewards is always kept in the Beacon Chain. Our tokens merely represent ownership of ETH deposit and rewards you earned, so that you can trade them, earn additional return from them, and potentially borrow against them.
- You will always be able to exchange StakeWise tokens for ETH in a 1:1 ratio once Phase 2 is live. Before then, you can exchange your tokens for ETH in the marketplace at market prices.
- Since sETH2 token represents your deposit in StakeWise Pool, exchanging or transfering your whole sETH2 balance will mean that you transferred your entire deposit to someone else. Thus, your rETH2 balance will stop growing.
- If you sell/transfer only a part of your total sETH2 balance, you will continue earning rETH2 at the same percentage rate as before. However, the balance of your rETH2 will grow slower than before because your deposit (sETH2) will have been reduced.
- To illustrate, if the staking return is 20%, then on 10 sETH2 your rewards balance will grow to 2 rETH2, and on 5 sETH2 your rewards balance will grow to 1 rETH2. Thus, the return is the same, but the total amount of accrued rETH2 is smaller.
- Since rETH2 token represents your reward in StakeWise Pool, exchanging or transfering your rETH2 will mean that you transferred your rewards to someone else.
- Nothing bad happens! In fact, we want to encourage exchanging rETH2 tokens into ETH when you’re staking, because it allows you to make another ETH deposit and compound your return.
- To earn compound returns from staking, you must be able to reinvest the rewards you earned back into staking. If the exchange rate between rETH2 and ETH is at or above 1, you can exchange earned rETH2 back into ETH (via protocols like Uniswap, Sushi and Curve) and re-deposit this ETH back into staking. This means that you will have more sETH2 and therefore your rETH2 token balance will grow faster.
- Not only this is possible, but it is also encouraged.
Make sure to familiarize yourself with the risks and returns associated with liquidity provision on Uniswap, Sushi and Curve before adding liquidity. Always do your own research.