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Stakefish as an xDai validator

Hi! We wanted to officially introduce ourselves and apply to become one of xDai’s validators.

Project name: stakefish

Project location: Global team covering 13 different time zones (legal presence in Malta)

Project inception year: 2018

Team size: 29

Website: https://stake.fish/ (available in 16 different languages)

Social media:

Networks supported: Ethereum 2.0, Chainlink, The Graph, Polygon (launching by end of April), Polkadot, Cosmos, Tezos, NEAR (for the full list, please visit stake.fish)

Total assets staked: Over $1 billion staked across networks

Motivation: Our goal is to build a resilient infrastructure layer for blockchain projects of the future. With this goal in mind, we have been supporting critical Proof of Stake protocols and middleware projects from 2018 when many were in bootstrapping phases.

It is no secret that Ethereum has faced challenges with high gas prices, effectively pricing out many retail users. This is a good problem to have as it shows strong demand for block space on Ethereum! While scalability will naturally be solved as Ethereum 2.0 rolls out, we need other options today. As an Ethereum-friendly sidechain that has been honest with the ecosystem and developer focused, we believe xDai has more than proven its place in Ethereum’s ecosystem. The growing list of projects deployed on xDai attests to this: Gnosis, Perpetual Protocol, Colony, POAP, Dark Forest, etc.

While staking is our main source of revenue, our foremost duty and responsibility in this ecosystem is to provide a resilient infrastructure for critical networks and protocols. xDai has been at the forefront of Ethereum scalability and we want to contribute by helping maintain its network as a validator.

Security setup: We make use of multiple cloud providers across different regions. We take multiple factors into account when deciding the providers and regions, including connectivity with the rest of the network and assisting in decentralizing the validating infrastructure across the entire network.

We have 24/7 monitoring across all layers of our infrastructure. We have alerts set up for various metrics when thresholds are triggered. We also have an incident response plan, and disaster recovery plan to handle any emergency scenarios, such as chain halts and emergency upgrades.

Contributions to the ecosystem:

Our expected contributions:

  • We plan to create videos, run memes, and educate community members on how to stake on xDai.

  • We run one of the largest validator operations on Ethereum 2.0. We plan to branch out to other sidechains and Layer 2s. Running bridges for xDai will be relatively a trivial task for us.

  • We can provide advisory on best practices we’ve seen from other networks both on validator management and governance.

  • We can help attract more validators to xDai.

Our Request:

We are requesting 20,000 STAKE from the ecosystem fund to bootstrap our validator node in exchange for the contributions we will bring to xDai and the POSDAO staking environment. This amount will stay within POSDAO and we will not withdraw it (nor have the ability to withdraw with current safeguards in place).

If we decide to leave the network, we will find a suitable validator to serve as a replacement and transfer to that entity, or shutdown our node without withdrawing the initial 20K STAKE allotment from the fund. This amount will remain within the ecosystem

We would love to get guidance on how we could work with xDai and its community to be onboarded as a validator. We are happy to answer any questions!

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Can you tell us why creating videos and a memes is worth 20k STAKE?

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Great question. Because I am assuming you will be selling the staking rewards which end up being hundreds of thousands of dollars a year. For that amount of money there would need to be a tremendous amount of value you bring to promote STAKE

In addition, to become a validator the amount will be decreased from 20K to 2K STAKE

I’ll respond to your question about the importance of memes seriously as I think it’s an important one to expand on. But first i’d like to clarify that our expected contributions are not exclusively dedicated to the educational content that we can provide through accessible mediums like videos, articles, and memes.

These expected contributions that I detailed are not exclusively educational content–but just one of the 4 contributions I believe stakefish could make as a validator. If you have strong reasons to consider educational material as something that is not important and something that the majority of the xDai community consider irrelevant to more external participation from larger validator service providers, then I think that it would be a reasonable request to remove it.

We can easily work on exclusively providing infrastructural support via the 3 other contributions I detailed.

Here are the other 3 contributions that we can provide that were not in order of importance (just as clarification if you thought educational materials was the most prominent and listed first).

  • We run one of the largest validator operations on Ethereum 2.0. We plan to branch out to other sidechains and Layer 2s. Running bridges for xDai will be relatively a trivial task for us.
  • We can provide advisory on best practices we’ve seen from other networks both on validator management and governance.
  • We can help attract more validators to xDai.

I took a brief glance at some of the other xDAI validator submissions and found no projected contributions on the educational materials side to encourage more independent entities, individuals, and larger validator service provider organizations (like ourselves). (for reference, these were some of the xDAI validator submissions that I found as a point of comparison on our submission and projected contributions: MetaCartel as an xDai validator, MyCrypto as an xDai Validator :-D, Austin Griffith as an xDai validator 😁, Syncnode as an xDai validator, Progressbar as an xDai validator, Gnosis as an xDai validator, Anyblock Analytics (eth.events) as an xDAI Validator, Ztake.org as an xDai validator, Lab10 collective as an xDAI validator, Nethermind as an xDai validator, Portis as an xDai validator, Velas as an xDai Validator, 🐞 meleatrust as an XDai Validator).

I would say that educational material to lower the barriers of entry so that more validators could join the system would be a net benefit. After all, the entire mantra of “don’t trust, verify” breaks down if we as individuals (and even entities) cannot verify the system for ourselves because we don’t understand the technical complexities or how to go about even doing certain verifications. That is the entire point of providing educational and on-boarding materials that we as technical operators can ensure.

In this very specific example, I honestly believe that the burden of responsibility lies directly on the infrastructure providers. It is a sort of tragedy of the open source commons. Everyone one is responsible and yet no one is responsible. I’ve seen this happen on many of our layer 1 networks that we validate time and time again. The technical barriers that exist is solely an on-boarding and educational front. Yes, it is not impossible to sift through sometime arcane technical documentation to go ahead and earn that level of understanding to get the information necessary. However, if it can be made easier it is helping at any level necessary. Even tidbits of information that are required to assess, verify, or even remember to ensure certain systems that need to run are important. Along with more technical infrastructure providers entering more easily into the validator set, the number of ‘eyes on’ the system is an incredibly important one aka more eyes fewer bugs. (there is actually a fantastic talk by Peter Gutman called ‘bugs in the brain’ about this very topic of how more eyes doesn’t necessarily mean fewer bugs in open source systems (Risky Business #44 -- Bugs in the brain, part two - Risky Business)). Making information more friendly and accessible to the public (both technical and non-technical; as well as both professional infrastructure provider and non-professional infrastructure provider), is vital to having accountability from the public on us (infrastructure providers) as there should be more demands from people’s understandings of how these systems should be maintained and (in particular) the properties of this validator set (decentralized or not). (I have a series on specifically the decentralization transparency of the Eth2 beacon chain on this topic of understanding our validator sets that I think would be helpful as well: part 1 (Making the Case for Decentralization Transparency | by Daniel Hwang | stakefish | Medium), part 2 (Navigating Data on Ethereum 2.0's Decentralization Transparency | by Daniel Hwang | stakefish | Medium), part 3 (ETH2 Decentralization Transparency Champions | by Daniel Hwang | stakefish | Mar, 2021 | Medium).

In part 1 of that series, there is an excellent quote I take from Philip Monk (of the Urbit network), in a post on setting up principles for robust decentralized systems:

Sovereignty necessitates understanding. If you don’t understand a system you’re using, you don’t control it. If nobody understands the system, the system is in control.
(here’s the source post for that quote: Tools of Our Own - Urbit)

It’s such an important aspect that is an underlying and fundamental pillar of our beloved mantra: “don’t trust, verify”. Quite often, we (stakefish) have put a lot of effort into communicating education on things of this nature because we believe it is a vital resource that the public deserves. You can take a look around our website on different networks and find our staking guides (ethereum for example: https://stake.fish/en/ethereum/), videos, descriptions, calculators, comparisons, FAQs, newsletters, and yes memes on our socials to direct people to important information and poke fun sometimes. Bland usually doesn’t attract too much attention and I would say that catching attention in this crazy life of everything demanding our attention is a competition we need to be a part of succeeding in as well (especially for important things like staking).

Under the context of education, memes are just one way of communicating information. It’s an approach that we take of many different approaches that I described a bit of above.

This is a great question because we as a larger validator service provider have had a chance to streamline a lot of our processes to be quite efficient in running our infrastructure on many layer 1 networks.

I would actually be curious as to how many of the smaller xDAI validators (individuals, smaller groups) who do not run validators on layer 1s support the network.

I think if there is a framework for how stake is handled, we would be more than happy to abide by it–especially with the rewards situation!

Also, for reference, Mojmir and Andrew from the xDAI team specifically suggested we add this amount in request. If you have strong opinions against their suggestion hear, I would be more than willing to see how we can adjust to what you think might be fairer?

I am still not clear how being gifted 100’s of thousands of dollars a year is warranted by creating some educational material. Why should you be the ones to do it compared to using significantly less amount of STAKE to just pay a marketing firm or someone savvy in educational material.

Considering this isn’t even a 1 time fee and free yearly profit over many years I think the community would need to be convinced how this is worth it

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Thank you for showing an interest in running a validator for the xDai chain. It’s no secret that xDai have a need for more validators to further increase decentralisation of the network. I do have a question, and keep in mind that I am merely a STAKE delegator, so obviously I am interested in what drives value to STAKE.

The ecosystem funds are, as copied from the xdaichain website:

designed to support the further development, expansion, and adoption of xDai and STAKE.

I don’t see a strong case that handing out 20,000 STAKE to run a validator for educational material meets the criteria that I, as a delegator, expect the ecosystem funds to meet. Becoming a delegator is very simple, and instructions have already been created for this. I don’t know what more is needed here that shouldn’t be handled in-house, or as @Joe007 pointed out, completed by an external design house for a fraction of the cost.

My question: Is there a precedent set by the previous networks that you are supporting? If so, can you share any details around this? i.e. were you given say 32 ETH by the Ethereum Foundation? I would feel a lot more comfortable if this was common practice.

This post has made me realise that people really aren’t interested in acquiring STAKE on their own and would rather rely on ecosystem funds to run a validator. This leads me to question, why should I as a delegator bother to purchase STAKE if the people running a validator aren’t interested in purchasing off the market. There’s no real skin in the game, therefore the consensus penalties of 90 days (when enabled) don’t apply to these particular validators. Perhaps this is best left for another, more relevant discussion.

Thank you.

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Hi Dan!

I don’t think that questioning the abilities for supporting the network of the validators that were supporting xDAI from it’s early days and made possible for the network to be here, where it is as we speak is a nice and business-wise way of introducing yourself as a potentially new validator to the xDAI chain. I quote what you said in one of your previous messages: “I would actually be curious as to how many of the smaller xDAI validators (individuals, smaller groups) who do not run validators on layer 1s support the network.”

You should note that all the validators in the set are here from a long time and they showed their support countless times when it was needed.

This being said, I can say that we know stakefish from the early days of cosmos launch and they have proven themselves to be one of the most powerful and serious validators in the space for the last years!

Regards,
George

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To be clear there is no voting process on spending of the ecosystem fund but signaling. If community disagrees on proposals there should be a way to get this signal and measure it.

Rewards are paid by POSDAO to validators for providing security and protect hundreds of millions USD locked and billions USD transacted

After the end of the second audit of POSDAO (~ end of May 2021) penalties will be enabled and every misbehaving will be punished by removing the validator and all delegators from the staking consensus. Funds of both parties will be jailed for three months days after that without getting rewards. Professional validators are very desired for any public network to keep it running.

Delegation of 20k to any new validator will increase total rewards and with the right behavior of delegators may increase rewards for them too.
Decreasing min stake from 20k to 2k without inflow of additional stake for delegation will decrease rewards for most participants because all pools (delegator+validator) are getting equal rewards from the protocol.

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Hi @kobello !

You raised some very interesting and valid points especially from delegators side.

First of all I would like to clarify that the 20k STAKE tokens for becoming a validator are not given or donated, they remain at the protocol level and are only used to add a new validator “chair” to the table. So basically potentially new validators will not receive 20k STAKE and they will NOT be able to transfer, sell, or do any other actions with them. This was taken into consideration from the early days of xDAI chain when we were only a small number of validators that were sharing a vision with the founding team and there was not real use case for the xDAI network.

So I understand the reticence from the token holders that of course have the interest of seeing the token price going up, but relying on a potentially new professional validator that will buy the necessary amount of tokens to suport the price is an utopia cause it’s not gonna happen. On the contrary, having more professional validators will bring a brighter light to the chain in the whole space and will bring increased confidence to potential new token holders

I personally would support Stakefish in joining the validators set. Like I’ve said in my previous post they are one of the largest and most powerful validators in the space. They came with their initial proposal of supporting xDAI network, but I am sure their support will be more diversified in time and new things will be brought to the table by their team.

Regards,
George

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What is your strategy for increasing inflow for those staking? Seems like that should be a major focus based on what you said. Myself and I know the community is extremely interested in how the growth of STAKE will occur from your point of view.

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Hi Joe,

It is a delegation and not a grant.

You will be making staking rewards though am I correct? How do you have skin in the game when you a given 20K STAKE? What will you be doing with those rewards?

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Great questions, and it’s great to see the high level of scrutiny.

One aspect of “skin in the game” that does not get mentioned enough is the social reputation at stake. Validators (especially ones that are trying to build a professional dedicated validator) need to maintain a strong track record both in terms of technical operations and community. Having been operating validators for the past 3 years, we are disincentivized from trying to act maliciously and risk throwing away the social reputation we’ve worked hard to build.

The rewards will be used to make sure we can pay the actual server costs as well as overhead for our xDai validator. The first and foremost purpose of these rewards is to make sure we run a validator that strengthens the xDai network. We’ll also make sure part of these fund our marketing/community efforts on xDai staking.

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I’m curious as to what solution you would see as appropriate?

We can, as a validator, certainly provide the necessary and requisite services that we have provided other layer 1 networks, help bring in more professional validator service providers, and educate.

I think we can also explore other opportunities for increased development on xDAI. We have done something similar in the Cosmos network where we run 2 types of validators: one is a traditional Cosmos validator and one is a validator (called grant.fish) of which the entirety of the rewards go exclusively to grants in the cosmos ecosystem.

Here is the announcement of grant.fish: Launching grant.fish validator. Introduction | by JK | stakefish | stakefish | Medium

And here is the information from the grantees and the cohorts!

Perhaps we could do something similar on xDAI! Or if you have any other suggestions I would be open to hearing them.

Also, do you delegate or run your own validator? Are there any examples of other validators doing other things that offer value? It would actually be really helpful if you can provide some examples to us of what other validators on xDAI have done and what you have seen as valuable contributions!

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Staking rewards is the main driver for staking
You can see some historical data here Dune Analytics

The main focus for the open market is delegation because it doesn’t require technical skills but increase overall security of the protocol if used wisely.

Running nodes of validators is a professional activity and should be run by engineers in most cases. During the edge cases of censorship like cease and desist, global warfare, ai supremacy, and so forth it can and should be done by any anonymous party with the required amount of staking tokens plus the trust they’ve built with delegators.

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Yes definitely understand rewards for staking. My concern is that for people to see value in staking they want to see positive movement in the token and see effort made in that regard. Stake is not a stable coin so people will want to see that the Stake they stake is worth the lock up. Otherwise they will go elsewhere with their money

if price is stable the value of portfolio is increasing because of the staking rewards.

Otherwise they will go elsewhere with their money

there is no way to promise or guarantee increase of the price. There are some mechanics in R&D to use locked collateral for the benefits of delegators. Although, likely it will come with decrease of staking rewards.

Literally talk like this is what will turn people away from STAKE. Investors care about returns. They don’t want a “stable” token. They would just go become a liquidity provider in stable coins instead of investing in STAKE, especially when the leader is not even showing he is interested in the price

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I have been a major supporter and want to continue to be. However as an investor, I want to know the team actually cares about developing the volatile coin they created and want to see it rise.