Protocols implemented
Discover the protocols Ethernodes' work with and how they contribute to your APR
At Ethernodes we always push to bring our depositors the best staking APR possible. That's why we keep looking into the market for new opportunities. Here, we break down the different protocols for which we manage validators and how they impact your APR. This page aims to bring as much transparency as possible, but at some points it requieres you full attention to undestand how everything works. Let's go for it!
Vanilla Validators
Vanilla validators are those that are deployed natively and directly withing the Ethereum blockchain. Those validators requiere 32 eth each (pre-pectra) to be deployed, and have both consensus and execution layer rewards. What's interesting about Vanilla validators? Full rewards can be keeped, which translate to potential major wins if one validator produces a block with a huge reward!
At Ethernodes, we charge a 15% fee over the rewards generated by those validators, and distribute the 85% to our customer's deposits.
Stader Permissionless Validators
Stader is a Liquid Staking protocol (LST). That means that users deposit their eth into their protocol to receive a derivative (ETHx) that then can be used in DeFi. Meanwhile, the eth deposited accure staking rewards. Stader has ~130k eth deposited, but who manage them to generate staking rewards? Stader has two modules to manage validators: one permissionless and one permissioned.
For the permissionless one, anyone can opt in to manage a validator for them. To do so, Stader request to deposit 4 ETH as bonding and 0.4 ETH in their token, SD, as collateral. Once deposited, Stader fills up the validator with +28 ETH, to achieve the 32 ETH nedded to spin up a validator.
Once the validator is up & running, Stader let you keep 100% of the rewards generated by your deposited ETH (remember, 4 ETH), and pays you a commision over the validation performance for ETH deposited by them into you validator (remember, 28 ETH). At Ethernodes, we split up the rewards as follow:
For the 4 ETH deposited as bonding (those ETH come from our customer's deposits): we charge a 15% fee over the rewards generated, and distribute the 85%
For the 28 ETH deposited by Stader to complete the validator): we receive a 6% comission over total rewards generated and then split those rewards 50%-50% with our customers.
Ethernodes' cover 100% of the collateral needed (0.4 ETH in SD value)
Yeah, ok... but whats de benefit here?
For Stader, they can decentralize operations of a core process and yet have a guarantee in case something goes bad (the 4 ETH bonding). For the operator (the one managing the validator), can access in a permisionless maner to validate more volume. It's a win-win scenario!
Lido CSM
Lido is the TOP LST by TVL by far. Lido CSM is its Communuty Staking Module and follows the same principales as Stader or RocketPool, but with some differences on bondings and distributions.
Anyone can can opt in to manage a Lido CSM validator. To do so, Lido request to deposit 2.4 ETH for the first validator and 1.3 ETH for the following ones as bonding . Once deposited, Lido fills up the entire validator with the 32 ETH needed.
Notice that Lido provides the 32 ETH needed, which means that the bonding used (2.4 ETH for the first validator and 1.3 ETH for the following ones) is "not needed" to spin up the validator. In fact, the bonding acts as a warranty in case you missbehave, as it happens with, for example, the 4 ETH bonded in Stader Permissionless module.
With that in mind, Lido's distribution happens as follows:
Validation rewards: For the validators managed, operators earn a 6% fee over rewards generated
Excess bond: For the bonded ETH, the operator generates Lido's net staking reward, which is staking APR generated by all Lido's validators -10% Lido's fee
Now that we've stablished the basis, lets dive on how rewards are actually received and then distributed. Lido CSM is the Comminity Staking Module. As its spirit is to have a great base of community stakers, rewards generated by validation rewards are put in a "common pot" and then distrubuted based on average performance. You can learn more here, but long story short, every 28 days a new cylce is completed and rewards generated are claimable by the Node Operator. Then, Ethernodes distributes rewards as follow:
Excess bond rewards: even though those are accumulated and claimable every dey, Ethernodes distribute them every 28 days, over a 28 days period with a 15% fee over rewards generated.
Validation rewards distribution: once a new cycle is available, every 28 days, we distribute the rewards received over a 28 days period, with a 50%-50% split with our customers.
Stader Permissioned
Back to Stader, remember that its protocl has two different modules to validate the Ethereum they receive as deposits. We've integrated validators from the permissionless module into Ethernodes... and also from the Permissioned one!
Stader's permissioned module allow a profesional node operator such as Ethernodes to manage Ethereum validators without having to compromise any bonding. As the name indicates, you have to be granted to operate in this module and receive volume.
In this case, the general idea is that we receive a 4% of overall rewards, but with a differenciation between Consensus Layer rewards and Execution Layer rewards:
Consensus Layer (CL) rewards: straight forward, 4% of rewards generated are recieved
Execution Layer (EL) rewards: All EL rewards generated by validators managed by Permissioned Operators (PO) are sent to a Stader address. Then, once every 28 days, Stader creates a new cylce that distributes the EL rewards at once, based on the share each operator has over total validators managed by Permissioned Operators. For instance, imagine that there are 5 PO with a total of 1.000 validators, and Ethernoes has 200 validators. That is, 20% of the validators. And then, imagine that at this cylce, total EL rewards accured by PO are 10 ETH. That translates to 10 ETH * 4% commision * 20% Ethernodes share. That's a total claimable fee by Ethernodes of 0.08 ETH for this cycle.
With the functionality explained, Ethernodes distributes the rewards with is customer's deposits as it follows:
Consensus Layer (CL) rewards: calculated and distributed daily with a 10% for customers - 90% for Ethernodes .
Execution Layer (EL) rewards: once a new cycle is available, every 28 days, we distribute 10% of the rewards received over a 28 days period.
Meaning, our cutomers get 10% of the commisions generated by Ethernodes operations for Stader Permissioned module, without having to put any collateral or bonding.
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