[Notice] Blockswap Cloud
Introduction
Blockswap Labs, a leading consensus layer (Ethereum) research and development firm for the past three years, offers unique tools and expertise for Ethereum staking and consensus layer data access. Their anchor protocol Stakehouse enables Liquid Staking Derivatives Networks (LSD Networks) as a service and has tokenized MEV staking for DeFi users and protocols. This is done through a state replication mechanism and atomic debt positions for Ethereum validators. Blockswap Cloud aims to extend consensus layer economic security across the entire web3 space, accelerating decentralization and fostering financial inclusion.
Note: This Notice is meant to serve as the beginning of the conversation around Blockswap Cloud. Many elements may change throughout the development and iteration process based on what is technically and feasibly possible.
Background
Blockswap Labs, a core contributor to the Blockswap Network, is dedicated to making Ethereum’s Proof of Stake (PoS) benefits permissionlessly accessible to a broader audience. They plan to turn mainstream users into core beneficiaries of Ethereum’s transition from Proof of Work (PoW) to Proof of Stake (PoS). At the recent 2022 Devconnect Amsterdam Ethconomics event, Labs showcased their products’ economic stack, which aligns with Ethereum’s rollup-centric future.
One key aspect of Lab’s vision is to transform staked ETH into a productive asset class and establish staking infrastructure as a reliable base layer for web3 and rollup-driven growth. Stakehouse has been instrumental in repurposing staked ETH as a sustainable DeFi yield source while democratizing Maximum Extractable Value (MEV) and enabling multi-chain ETH staking through the dETH gateway.
Blockswap Cloud is the embarkment of a new frontier: making staking infrastructure and Ethereum consensus accessible to other middleware and decentralized networks in a fungible manner, leveraging registry smart contracts. By doing so, Labs aims to create a more inclusive and connected ecosystem, driving innovation and growth in web3, serving rollups, EVM chains, and non-EVM chains.
To learn more about registry contracts refer to the Stakehouse Position Paper.
Blockswap Cloud
Blockswap Cloud is a permissionless marketplace that allows Ethereum validators to earn additional income by restaking their validator for any web3 middleware and L1 or L2 blockchain node-running opportunities, all backed by Extended Ethereum Economic Security with slashing conditions.
At the core of this service is Blockswap’s advanced monitoring and adaptive observability technology stack, which enables other networks to hire Ethereum validators for their node services. It includes an added assurance of slashing them in case of failure. The agreement for service is referred to as a Stake Lease Agreement (SLA).
Utilizing self-enforcing smart contract registries, Blockswap Cloud facilitates off-chain networks in specifying their SLA conditions for Ethereum node runners to opt into. In exchange, the SLA Service Provider (middleware) offers tokens as payouts to be collected from the Cloud Payout pool for their subscribed SLA, creating a seamless and secure ecosystem for all parties involved.
Below are the participants of Blockswap Cloud.
Validators: Ethereum active validators with a minimum effective balance of 24 ETH can join Blockswap Cloud. To participate, validators either need to have a credit score for their performance in the consensus layer, which is built into Stakehouse Self Staking & Stakehouse LSD validators as part of SLOT; Or they must provide a collateral of 4 ETH. To accommodate the diverse ecosystem of Ethereum node runners, including liquid staking tokens, Blockswap Cloud accepts assets like stETH, rETH, and cbETH via kETH. Validators have the flexibility to exit at any time, and without setting withdrawal credentials to Blockswap Cloud.
Service Providers: Middleware, decentralized networks, blockchains, and dApps that require high-quality service and extended Ethereum security can offer Stake Lease Agreements (SLAs) for validators to opt into. These SLAs specify the duration, payouts, Ethereum stake units (based on the Blockswap Cloud formula), and slashing logic. Examples of service providers include bridges, L2s, rollups, MPC, ZK validators, data availability solutions, oracles, light clients, relayers, MEV players, and other blockchains.
Reporters: Validators or other actors can opt-in to enforce a predefined slashing logic that syncs with Blockswap Cloud, functioning as Reporters. In return, they earn SLA payouts and penalties from slashing events. This lightweight service is similar to a PON reporter and can be easily run by anyone interested.
Consensus Delivery Network
Blockswap Cloud’s ground-up new primitive Consensus Delivery Network (CDN) offers Modular Consensus Shards. The CDN is designed to enhance the security of external networks by utilizing Ethereum’s consensus layer as a fallback mechanism. This approach allows Consensus Shards to deliver modular Ethereum consensus in a fully composable manner.
The configuration of Consensus Shards is based on five key parameters of Ethereum consensus activity:
- Target vote in Attestation
- Source vote in Attestation
- Head vote in Attestation
- Sync Committee Performance
- Block Proposal
For decentralized networks to achieve optimal security and resilience, a multi-layered and adaptive strategy is necessary. This is where the concepts of horizontal decentralization and shared security become essential. Horizontal decentralization involves the distribution of resources and functions across multiple independent nodes, reducing single points of failure and increasing network robustness. Shared security, on the other hand, leverages the security mechanisms of one network (in this case, Ethereum’s consensus layer) to provide additional protection for another network.
By combining these principles, Blockswap Cloud’s CDN offers a powerful, modular solution that can safeguard decentralized networks against a wide range of threats, including attacks, reorgs, outages, and data tampering.
Blockswap Cloud Ecosystem:
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Cloud DAO: This decentralized organization handles the treasury, manages the SLA stack, and oversees onboarding and distribution. It also takes a standard commission as part of its operations.
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Curators: These individuals operate like package managers in a Dappstore, similar to Dappnode. They act as individual curators, presenting a selection of projects. They can collect a commission for their product line.
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Incubation Mode: This support system aids in bootstrapping new projects, aligning marketplace validators with emerging initiatives, and integrating new projects with the ecosystem. It also provides education on how to achieve these goals.
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Open Ecosystem: The ecosystem can be built in various ways. Protocols can plug in to provide incentives for Ethereum validator services. Decentralized communities and DAOs can champion the creation and sharing of educational resources on new middleware details for validators to opt into.
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Value Exploration: Protocols or actors interested in discovering new use case synergies, akin to add-ons, can engage with the ecosystem.
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Cloud Grant DAO: By depositing kETH, participants can become part of the DAO. This organization approves grant applications, with grant recipients required to stake a specific amount of BSN. Grant funds can only be claimed upon project integration with an SLA.
BSN Token Utilities
BSN staking is required for:
- DAO Treasury Council
- Becoming Curator
- Service Provider SLA Listing such as Middleware
- Reporter
- Grant DAO
Blockswap Cloud DAO Treasury
A standard percentage of all SLA payouts will be allocated to the Blockswap Cloud DAO treasury as maintenance fees. Additionally, whenever slashing events occur, a portion of the resulting ETH will also be contributed to the Blockswap Cloud DAO treasury.
Next Steps
Blockswap Labs will provide comprehensive documentation on Blockswap Cloud, offering in-depth insights into the mechanics of SLA, CDN, and BSN tokens utilities. Blockswap Cloud DAO Testnet participation is slotted for the coming weeks.
Conclusion
Blockswap Cloud is a decentralized, trustless, and permissionless marketplace designed to cater to middleware throughout all of web3. By leveraging existing middleware toolings created by Blockswap and the BSN token, it can provide a seamless marketplace for validators and middleware to coordinate. The community is welcome to provide any feedback, comments, and ideas.