Before we get started, DeFi Dad wanted to disclose his team at 4RC invested in the Series A for Stader Labs. This is not a recommendation or endorsement to buy any token(s) mentioned.
On Monday, the multichain liquid staking protocol Stader launched its new liquid staking solution ETHx. ETHx is an ETH LST for earning passive ETH staking yield where users can hold any incremental amount, removing the high barrier to entry of holding 32 ETH as a solo ETH staker. Stader Labs developed ETHx by combining some of the best features found in the designs for ETH liquid staking industry leaders Rocket Pool and Lido, plus adding a few new ideas.
Back in 2021-2022, Stader grew to become the top LST on Terra, achieving nearly $1B in TVL prior to the UST/Terra collapse. Since then, the protocol has managed to rebuild and continue developing next generation LSTs for its 50k stakers, including solutions like MaticX ($59M TVL), HBARX ($22M TVL), BNBx ($10M TVL), NearX ($4.7M), and sFTMx ($4.1M).
The new ETHx design offers the following advantages:
- Lowest ETH Bond: ETHx optimizes for permissionless stakers by requiring the lowest bond available for node operators–4 ETH, democratizing the ability to run a validator.
- Hybrid Pool Architecture: ETHx is powered by a hybrid model of Rocket Pool and Lido. The backbone of the protocol is a pool for permissionless stakers to pair 28 ETH with their 4 ETH bond. Meanwhile, a separate pool of permissioned node operators is able to pick up the slack when there’s not enough permissionless stakers to keep up with demand from ETHx depositors. (see below)
- Launch incentives: Stader is offering 1.5x staking rewards during from July 10 to August 9. This means with ~5% base staking rewards, ETHx users will earn 6.5% in boosted staking rewards.
- Tax-Advantaged Token Design: ETHx is not a rebasing token. It uses the cToken model, meaning ETHx holders can avoid continually increasing ETHx wallet balances and hence avoid more taxable events from staking yield. In the stETH token model, rebasing triggers what many tax professionals would classify as a taxable event, depending on your country and jurisdiction (ie USA).
- Boosted Commission: ETHx node operators who join during this launch month will earn 7% commission compared to the standard 5% on their first 4 active validators for a whole year.
Stader has implemented 40 DeFi integrations across its other liquid staking solutions and they have mentioned launching new incentivized pools for ETHx holders in popular DeFi protocols like Curve. For now, simply holding ETHx earns about 5.7% APY vs 3.9% APY with stETH or 3.32% APR with rETH.
ETHx contracts have been triple-audited which are linked below, and appear to show all high and medium rate issues being resolved.
Code4rena (report coming soon)
You can find other audits specific to Stader nodes, Offchain, and Oracles here. There is also a $1M Immunefi bug bounty and soon real-time monitoring powered by Forta, to detect threats and anomalies for ETHx.
Today, I’ll show how I might earn 5.7% APY by minting and holding ETHx!
Earn 1.5X Staking Rewards (5.7% APY) with ETHx by Stader
Before we get started, please be aware of these risks.
- Smart contract risk in ETHx
- Oracle manipulation risk
- Front-end spoof attack on the ETHx…
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
