While it's still early to measure the impact of withdrawals on liquid staking, in this month's edition you'll find a preview of Liquid Collective's ETH withdrawal implementation and target timeline, alongside resources from Liquid Collective members.
This week marked a milestone for the Ethereum community: the deployment of the Shapella Upgrade, enabling full and partial validator withdrawals for the first time since the Beacon Chain's launch in 2020. Congratulations to the entire Ethereum ecosystem on this important milestone with significant implications for the staking landscape.
While it's still early to measure the impact of withdrawals on liquid staking, in this month's edition you'll find a preview of Liquid Collective's ETH withdrawal implementation and target timeline, alongside resources from Liquid Collective members.
Read on for the latest news, data, and resources from Liquid Collective!
A community preview covered the high-level overview of Liquid Collective's Ethereum withdrawal implementation and target timeline (TLDR: targeting mid-May for mainnet).
The highlights of the withdrawal architecture cover Liquid Collective's planned LsETH redemption process, Validator Exit Daemon, and Oracle Daemon. Read the Twitter thread or LinkedIn post to learn more.
The churn limit is a parameter that governs Ethereum's validator activations and exits. At the current churn limit only ~0.04% of the circulating ETH supply can be activated per day (~1800 validators per day), and any staking demand spiking beyond that limit will have to wait in a first-come-first-serve line to start earning Ethereum network rewards.
So how do staking activations and exits actually work, how can they lead to waiting in line to stake or unstake, and what are the potential implications for liquid staking tokens (LSTs)? Learn more in our explainer.
Growing adoption of crypto by institutional investors has long been cited as a meaningful channel for growth of the web3 ecosystem overall, and institutional adoption of staking is no exception. Despite the growing popularity of liquid staking several challenges have hindered institutions from participating in a widespread and meaningful way—including compliance, a concern for institutions which require a level of transparency and due diligence.
Read up on the “why” behind enterprise-grade compliance standards in our post.
Last month, the Proof of Stake Alliance published two white papers representing first research and analysis into key legal questions surrounding the taxation and regulation of liquid staking and LSTs in the U.S. Alison Mangiero, Executive Director of the Proof of Stake Alliance, caught up with Mike Selig, Counsel at Willkie Farr & Gallagher LLP, to discuss the importance of LSTs with Liquid Collective. Watch the interview, or read the transcript, here.
Ethereum Zurich: April 14 - 16th, 2023
Paris Blockchain Week: In case you missed it...
All data is accurate as of April 14, 2023. View real-time onchain data here on Dune. Percentage changes are from last month's newsletter send on March 10, 2023.
LsETH users may still be subject to slashing losses. If slashing losses were to occur, they would be socialized pro rata for all LsETH user's starting with earned but unredeemed network rewards.
Liquid staking via the Liquid Collective protocol and using LsETH involves significant risks. You should not enter into any transactions or otherwise engage with the protocol or LsETH unless you fully understand such risks and have independently determined that such transactions are appropriate for you.
Any discussion of the risks contained herein should not be considered to be a disclosure of all risks or a complete discussion of the risks that are mentioned. The material contained herein is not and should not be construed as financial, legal, regulatory, tax, or accounting advice.