[Proposal] Utilizing ZEC (Zero ETH Club) for LSD Networks Launchpad

Proposal Discussion
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[Proposal] Utilizing ZEC (Zero ETH Club) for LSD Networks Launchpad

Introduction

There are many threats to the decentralization of Ethereum. Some of these are centralization due to a lack of geographical node distribution. Another is growing LST consolidation. To solve this, the ZEC (Zero ETH Club) protocol stands out as a pioneering framework for enhancing Ethereum staking and node-running operations. This proposal outlines the benefits and functionalities of employing ZEC as a platform for launching custom Liquid Staking Derivatives (LSD) with fungible liquidity to help decentralize Ethereum.

ZEC as LST Launchpad

Overview

The ZEC Contract is a robust framework that allows node runners to seamlessly accept delegated ETH and provide node running services in a trustless environment. It enables validators to receive a full 32 ETH for validation from external sources while collecting a default of 10% of their MEV revenue. LSD Networks can leverage this framework to onboard solo stakers and node runners.

Value Proposition

  • Enhanced Onboarding - Facilitates the easy onboarding of solo stakers and node runners.
  • Revenue Generation - By default, validators can collect a 10% MEV revenue.
  • Increased Decentralization - Promotes geographical decentralization for Ethereum staking and node running.

ZEC as the New LST Bedrock

Stakehouse and LSD Networks

Stakehouse, akin to open stacks in Ethereum, is a public benefit infrastructure that enables in-protocol delegation for Ethereum staking. It has a liquid staking feature built for restaking validator balances as tokenized stake positions and, if needed, a token minting as ERC20 tokens for validator-backed liquid ETH on the execution layer. LSD Networks further support the pooling of deposits and LP management of every validator’s tokenized position. This allows anyone to launch an LSD Network in under 60 seconds with minimal cost.

Features

  • Immutable Contracts - LSD Networks operate on immutable contracts without any external interference or Oracle dependencies.
  • Easy Start-Up - Comes with full withdrawal functionalities and global settlement.
  • On-chain Key Recovery - Features on-chain key recovery with the help of an independent on-chain MPC protocol - Common Interest Protocol.

New Paradigm

ZEC and LSD Networks

With ZEC, LSD Networks can launch more curated node runners, allowing them to receive the whole deposit for ETH validators (32 ETH). This process involves preferred node runners adding addresses to receive ETH.

Benefits

  • Trustless Node Running - Enables trustless node running for launching new LSD protocols.
  • Custom Commission - Allows LSDs to set custom commissions, making LSD protocols fully autonomous.
  • Flexible Operations - LSD Network DAOs or manager addresses can eject non-performing node runners and rotate depositor’s capital to a new validator or return it to stakers.

Blockswap DAO

Blockswap DAO could enable this as a service for onboarding new or existing LSD Networks. New LSD Networks could launch a native token and give an allotment to Blockswap DAO. Blockswap DAO could also incentivize their growth liquidity by giving BSN emissions.

Conclusion

In conclusion, utilizing the ZEC (Zero ETH Club) protocol for launching custom LSD Networks with fungible liquidity and unbounded node running presents many benefits. It enhances the decentralization and security of Ethereum by providing a trustless and efficient environment for 0 ETH node operators.

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