Introduction
Stakehouse Liquid Staking Derivatives (LSD) Networks are designed to help decentralize Ethereum while giving users access to liquid staking derivatives. Anybody can permissionlessly create an LSD Network and source liquidity for their network. Node operators are matched with liquidity providers. For more technical information on Stakehouse LSD Networks please view the formal documentation.
Current State
Stakehouse LSD Networks is community-owned and currently under testing. The protocol is a natural extension of Stakehouse and acts as tooling around its contracts. The contracts are entirely open-source and anybody can deploy and modify them as they see fit; Although only the Blockswap deployed contracts will have access to the Giant Pools.
LSD development started during DevCon Bogota. It was inspired by a community member who built a protocol on top of the Stakehouse protocol. What he built allowed for stake deposit aggregation for maximizing MEV exposure through a lending and borrowing market. Find it here GitHub - stakehouse-dev/compound-staking.
The core contributors decided to build upon this idea and lower the capital barrier of entry to run an Ethereum validator to 4 ETH.
Security
From November 11, 2023 until November 18, 2023 an audit competition for Stakehouse LSD Networks took place with Code4rena. The version of the code which was shared for the competition was an alpha version; This enabled early feedback about the direction of the protocol. The code was not production-grade or formally verified, even though formal verification is on the roadmap. Results from the competition can be found here.
There is formal verification ongoing with Code4rena and Certora for the MEV payouts contract associated with the Stakehouse LSD Networks. That contest can be found here.
Beyond the community competition approach, the following continuous security assessment has been followed for ensuring tooling contract security:
- Foundry testing:
- Unit testing
- Property testing
- Fuzz testing
- Certora testing:
- Rule writing
- Invariant writing
- Ghost writing
- K Framework
- Foundry to K
The Core Contributors of Blockswap work closely internally and externally on their formal approach with partners such as Certora and Runtime Verification to ensure the highest level of security coverage possible.
LSD Networks Testnet is currently underway. V1 launched on December 2nd, 2022 (Etherscan) and was deprecated on January 05, 2023 (but still running). V2 was launched on January 5, 2023 (Etherscan) fixing known bugs discovered by the core contributors and broader community of testers. V2 is the most current version of LSD Networks.
As of Jan 24, 2023:
- 187 validators were staked
- 143 V1 validators
- 44 V2 validators
- 60 LSD Networks have been deployed
- 23 on V1
- 37 on V2
- 1,255 individual wallets have participated
- 1113 on V1
- 142 on V2
The community has been testing the smart contracts and UI and providing feedback on Discord. This has been valuable to quickly iterate and find bugs in LSD Networks. The testnet shall remain active for the foreseeable future well after mainnet has launched. This is to provide users with a sandbox environment to get comfortable with the UI, develop protocols, create strategies, and use them for their own benefit.
Mainnet
The goal of Stakehouse LSD Networks is to move the smart contracts and UI to mainnet for the wider adoption of ETH. This action will be voted on by members of the DAO. Before voting, all members are encouraged to express their feedback on the governance forum: http://gov.blockswap.network/. A proposal will be created prior to voting and deployment.
Unlike Stakehouse protocol. Stakehouse LSD Networks is 100% owned by the DAO. It will require a continuous optimization and security budget of BSN tokens for its maintenance, bootstrapping, and adoption. Because this is a DAO owned protocol, it is the responsibility of the DAO to take care of the protocol. The goal of the protocol should be to take care of the user and keep the user safe. This will require continual development and deployment by Blockswap DAO to ensure the protocol runs properly and is properly maintained.
Conclusion
Stakehouse LSD Networks is a powerful step forward for Blockswap DAO. It is the first protocol fully owned by the DAO and requires coordination of its members in the deployment, bootstrapping, and use of the protocol.