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Internals
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 non-custodial network of validators created and operated by leading node operators 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.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 waiting in the activation stage is labelled as
Activating in the StakeWise Pool. The amount of Activating ETH can cause a temporary drag on the Pool's performance. Note that a deposit queue was previously in place to minimise the impact of large deposits into the Pool. This was removed in February 2022 to better facilitate protocol integrations with the staking pool.Staking
Once ETH in the registered validator gets activated by the network, it proceeds to staking and starts earning rewards for the Pool.
The Horcrux
StakeWise was the first staking service to move to a non-custodial solution in April 2021. Prior to April 2021, StakeWise avoided 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. StakeWise will transition funds managed by the Horcrux into the fully non-custodial solution once validator withdrawals are enabled.
Creation
The Horcrux was created during an offline ceremony, where the participants (part holders) were 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 was never shown to any of the participants and only its public part was revealed. This part was then used by StakeWise to register validators for the Pool.
Generation of the Horcrux happened using an open-source tool developed by StakeWise. Its code was 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 12d ago