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StakeWise Pool
Tokenized ETH staking pool targeting maximum rewards for stakers
The goal of the StakeWise Pool is to enable holders of ETH to earn maximum staking rewards from participating in the Ethereum 2.0 consensus mechanism and allow them to utilize their stake in various DeFi protocols with help of StakeWise tokens.
We apply a 10% commission on rewards that the Pool generates to compensate for the costs of developing, running, and maintaining the infrastructure and smart contracts that underpin the StakeWise platform. To our knowledge, this is the most competitive offer on the market, which underscores our commitment to helping users maximize their staking returns while maintaining the highest level of service.

Overview

StakeWise Pool is a network of validators created and operated by StakeWise on behalf of stakers using ETH deposited into the Pool. For each new block of 32 ETH collectively deposited by the users, a new validator is created and added to the StakeWise Pool to earn rewards. All rewards and penalties generated by the Pool are distributed among stakers pro-rata according to their share of the Pool. The balance of ETH deposits and rewards is reflected in sETH2 (staking ETH) and rETH2 (reward ETH) minted to stakers in a 1:1 ratio.

Depositing

Anyone can deposit any amount of ETH into the StakeWise Pool. Upon each new deposit in the Pool, StakeWise mints an equal amount of sETH2 (ie 1 ETH = 1 sETH2). Holders of sETH2 will start accruing rETH2 within 24 hours of receiving the sETH2 token.
Deposited ETH first goes to the Pool contract, where it sits with other small deposits until it collects a total of 32 ETH required for a new validator.
Once the Pool contract collects 32 ETH, it sends them to the Validator Registration Contract (VRC). VRC registers a new validator entity on the Beacon Chain. Simultaneously, StakeWise Pool adds the new validator to its network. After progressing through the activation stage in the Beacon Chain, the newly created validator starts earning rewards for stakers in the StakeWise Pool. For every ETH earned as a reward by the Pool, StakeWise mints an equal amount of rETH2. It is accrued to the holders of sETH2 every 24 hours.

Deposit queue

On the occasion that a large amount of ETH is deposited into StakeWise within a short time frame, new deposits may need to enter into the deposit queue to protect the APR of existing stakers from dilution. It means that the minting of sETH2 tokens upon deposit must be triggered manually once the activation period has passed.
Only the largest deposits are required to enter the deposit queue.

The rationale behind the Deposit queue

No user, whether a whale or a small fish, wants to see their APR reduced, yet a large influx of new deposits (or a couple of huge inflows) may force APR down. This is especially likely during long validator activation periods in the Beacon Chain.
To achieve consistently the highest APRs for its stakers, StakeWise introduced the activation queue for new deposits.

How to determine if your deposit will enter the Deposit queue

In the vast majority of cases, the deposit is activated immediately and the user receives sETH2 tokens without manually pulling them. If your deposit doesn't enter the Deposit queue, you will see that the Activation Time is Immediate upon deposit.
However, the deposit will enter the Deposit queue if:
  1. 1.
    The deposited amount exceeds 32 ETH
  2. 2.
    The total amount of ETH that is Activating in the Pool exceeds 5%
The exact threshold is regulated by the DAO and can be set to any parameter depending on the community's preferences, the Pool's TVL, and the gas price.
If either of these conditions is met, you will see that the Activation Time exceeds 0.

How to claim your sETH2 once the Deposit queue is over

All activating deposits will show up in the Activations tab. For every deposit, you will see how much time there is left until sETH2 can be claimed.
Once the Activation Time has passed, simply press the Claim button and receive your sETH2. You will have now started staking with StakeWise and can be sure of having your APR protected from dilution for the rest of the staking period.

Tracking earnings

Your earnings from staking in the Pool can be tracked by looking at the amount of accrued rETH2 or by consulting the dashboard within the StakeWise Pool section of the app.
At the later stages, StakeWise will add a dedicated Statistics page to show the most important KPIs for the StakeWise Pool and the Ethereum 2.0 network as a whole.

Withdrawal

Upon arrival of Phase 2, StakeWise users will be able to burn sETH2 and rETH2 within the app and receive ETH in return at a 1:1 ratio.

Stages of deposit utilization

Every deposit into the Pool will pass through the two stages of utilization. These stages are Activating and Staking.

Activating

Newly registered deposits enter the activation queue to start staking in the Ethereum 2.0 network. The length of the activation queue depends on the amount of ETH being simultaneously registered in the network during a certain period. If the amount is large, it can take the network several days or even weeks to activate all queuing ETH.
ETH that is stuck in the activation stage is labeled as Activating in the StakeWise Pool. The amount of Activating ETH can cause a temporary drag on the Pool's performance, especially at the moment of StakeWise's and Phase 0 launch.

Staking

Once ETH in the registered validator gets activated by the network, it proceeds to staking and starts earning rewards for the Pool. At this stage, sETH2 backed by deposits waiting in the Deposit queue may be minted manually.

The Horcrux

StakeWise avoids sole custody of the withdrawal key for the Pool's validators by creating something we call the Horcrux. It is a trustlessly generated withdrawal key that is split into 7 parts, which are held by the widely-recognized figures in the Ethereum community. The withdrawal process will be overseen by these people, ensuring StakeWise processes all withdrawals fairly.
This semi-custodial approach was used for the validators created before the update to non-custodial solution in April 2021.

Creation

The Horcrux is created during an offline ceremony, where the participants (part holders) are required to exchange a series of cryptographically encrypted messages to create their part to the Horcrux and store it on an offline machine. The withdrawal key is never shown to any of the participants and only its public part is revealed. This part is then used by StakeWise to register validators for the Pool.
Generation of the Horcrux happens using an open-source tool developed by StakeWise. Its code has been audited and the tool is available for examination on Github.

Withdrawal

The Horcrux can only be recreated if x of the 7 parts are combined. Recreating the Horcrux is necessary to process the withdrawal of funds from the Pool's validators in Phase 2. The distribution of funds to the users will be handled by a Smart Contract; however, the release of funds into the Smart Contract (i.e. withdrawal) will need to be approved by the Horcrux holders.
We omit the specific x threshold for security reasons, but users should expect x to be in the range of 4 to 6.

Holders

All individuals participate in the Horcrux mechanism in a personal capacity and StakeWise has no affiliation with their employers.
Last modified 5mo ago