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Newsletter 016

Staking correlation report, ecosystem updates, and upcoming ETHCC events.

Newsletter 016

Another huge month for Ethereum! Amongst other developments—in case you missed it—the Securities & Exchange Commission officially approved moving spot Ethereum ETFs forward in the US. Read the Financial Times’ coverage here, and check out the op-ed, “A Spot ETH ETF Represents the Dawn of Institutional Liquid Staking” on the potential long-term impact on liquid staking of ETH ETFs, by Matt Leisinger, CPO at Alluvial, a team supporting Liquid Collective’s development.

Read on for the latest data, news, ecosystem updates, and more.

Liquid Collective's Latest

Obol Labs x Liquid Collective: Ethereum’s Correlation Risks

Obol Labs x Liquid Collective: Ethereum’s Correlation Risks

Many participants think about staking in terms of the reward rate received for adding credibility to a validator’s work, but behind every staker is a validator node performing critical duties to keep the network live, resilient, and secure. Correlation is one crucial area to understand in order to evaluate ETH staking technologies through a risk-adjusted lens.

Our new report, developed in collaboration with Obol Labs, provides insights to support informed decision-making within a diverse staking ecosystem, including an exploration of:

  • Correlation penalties: Ethereum’s slashing penalties increase if a significant portion of the network acts harmfully. For instance, if 33.4% of the network’s stake is slashed, 100% of funds on a slashed validator can be lost, making understanding these risks crucial.
  • Client diversity risks: A bug in a popular client like Geth, used by 84% of the network, could cause major disruptions. Diverse client usage helps prevent such single points of failure.
  • Operator diversity risks: Staking with a single, large operator increases risk. Historical examples from across the PoS ecosystem underscore the importance of distributing stake.
  • Geographic and cloud risks: Regional outages and policy changes highlight the need for geographic and cloud diversity to maintain network resilience.
  • Research & upcoming proposals: Upcoming changes to Ethereum, like EIP-7251, and topical ecosystem research, such as how correlation penalties could be refined, may impact correlation risks and network dynamics.

Read the full report here, or check out Obol’s post here, and stay tuned for more upcoming events highlighting the report’s key insights.

Obol and Liquid Collective are co-hosting a side event during ETHCC in Brussels: Don't Forget About Security & Decentralisation Day.

Security & decentralization deep-dive

Obol and Liquid Collective are co-hosting a side event during ETHCC in Brussels: “Don't Forget About Security & Decentralisation Day.” Along with sponsors including Coinbase, Chainproof, Nethermind Research, Lido, and others, the day-long event will feature expert panels on topics including:

  • Node Diversity
  • Preventing Correlated Slashing
  • Restaking Risks
  • Institutional Staking & Ethereum ETF
  • Home Stakers Impact on Decentralization
  • Staking Rewards & Punishments (i.e. issuance, slashing, etc.)
  • Token Holder Mindset: Motivations & Risks

If you’ll be in Brussels for ETHCC 7, register for the event here.

The Liquid Collective store has a new 2024 Collection

Stay liquid

You’ve packed your beach sundry, but what about your LST? The Liquid Collective store has a new 2024 Collection with the finest apparel for liquid staking summer (shoutout to crowd-favorite Liquid Collective Whales).

Dive into the Collection here, and download the Liquid Collective lockscreen here on X.

Liquid Collective Update subscribers got a special discount code here. Subscribe to Liquid Collective Updates so you don’t miss the next one.

LsETH Ecosystem Support Roundup

  • BIT supports Liquid Collective as "the first exchange to offer an LsETH/USDT spot trading pair.” View their post here


Professionalizing liquid staking and DeFI
Join Certora, Liquid Collective, and Gauntlet for breakfast at ETHCC in Brussels. Register here.

Upcoming Conferences: To connect with the teams supporting Liquid Collective at an upcoming conference, contact us.

  • ETHCC: July 8 - 11, Brussels
    • Join Certora, Liquid Collective, and Gauntlet for a breakfast at ETHCC to enjoy a delicious breakfast while discussing the latest in web3 security. Register here.
    • Join Obol, Liquid Collective, Coinbase, Chainproof, and Drosera for Don't Forget About Security & Decentralisation Day @ EthCC 7, a half-day, panel-style event with expert talks on ensuring a strong foundation for Ethereum, including node diversity, preventing correlated slashing, retaking risks, home stakers impact on decentralization, and more. Register here.
  • Token 2049: Sept 18 - 19, Singapore
  • Messari Mainnet: Sept 30 - Oct 2, NYC

News from the Collective & Ecosystem Updates

  • Financial Times published a newsletter, “Cryptofinance: into the ether,” covering the SEC’s announcement approving ETH ETFs in the US. FT discusses the potential market impact of ETH ETFs on staking with Mara Schmiedt, CEO of Alluvial, a team supporting Liquid Collective’s development. Read the article here.
  • Bloomberg writes that per S&P data, “Restaking May Morph Into ‘Internet Bond’ Market.” Read it here.
  • Coinbase’s latest State of Crypto report finds that the number of web3 initiatives announced by Fortune 100 companies has increased 39% YoY, hitting record highs in Q1 ‘24, and their “survey of Fortune 500 executives finds that 56% say their companies are working on onchain projects.” Read the report here.
  • ETH restaking on EigenLayer is now available in the Figment Staking App. Learn more here.
  • Analyst hildobby launched a new Dune data dashboard that’s prepped to track US Ethereum ETFs, currently displaying holdings in Grayscale's ETHE Ethereum Trust. View the dashboard here.
  • Evan Weiss, COO of Alluvial, and Lorien Gable, CEO of Figment, along with other guests, spoke with CoinDesk reporter Margaux Nijkerk on the “Everything You Ever Wanted to Know About 'LSTfi' But Were Afraid to Ask” panel at Consensus. Watch the panel recording here.
  • Blockdaemon announced a new DeFi API, which “simplifies DeFi interactions, enhances liquidity management, offers unified asset tools, and caters to B2B2C and institutional needs.” Learn more here.
  • Bitcoin Suisse published a podcast featuring Ethereum researcher Justin Drake, covering economic security and why it matters. Find the episode here.
  • Eigen Labs announced that their are acquiring Rio Network, and will be opening Rio Network’s restaking solution as a reference implementation in the EigenLayer ecosystem. Learn more here.
  • The Epicenter Podcast published an episode with Mara Schmiedt covering Alluvial and Liquid Collective, along with the potential impact of ETH ETFs in the US, “Institutional Liquid Staking and Spot Ethereum ETF.” Check out the episode here, or watch it on YouTube here.
  • Tjk & EthWave made an interactive version of Ethereum’s roadmap, including progress, resources, upgrades, and real-time network data. Check out the site here.
  • Web3 Security Auditor Hacken published a spotlight on the web3 innovators featured in Forbes’ 2024 30 under 30 Europe, including Mara Schmiedt, CEO of Alluvial. Read the feature here.
  • BitGo’s latest “Crypto Water Cooler” newsletter covers developments in Europe’s MiCA implementation, Bybit’s expansion, and more. Read it here.

Liquid Collective By The Numbers

Daily and Total ETH Deposits

  • Total Supply ETH: 87,688.094 ETH + 1.19%
  • Total Value Locked: $305,413,248 + 14.09%
  • LsETH Conversion Rate: 1 LsETH = 1.05122 ETH + 0.30%

All data is accurate as of June 21, 2024. View real-time onchain data here on Dune. Percentage changes are from the May 17, 2024 edition of By The Numbers.

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