Dec 07 2023
Liquid Collective is proud to announce a landmark development in liquid staking: the introduction of Service Level Agreements (SLAs) for Node Operator performance. This development makes Liquid Collective the first liquid staking protocol to establish SLAs for baseline validator performance, setting a new standard for top staking performance.
Liquid Collective’s current Node Operators, including Coinbase Cloud, Figment, and Staked, have signed these SLAs, which were collaboratively designed with Liquid Collective’s Node Operator Working Group led by Rated Labs and Alluvial. These agreements represent a new era in liquid staking as the decentralized Liquid Collective protocol aligns with the high standards and reliability that enterprises traditionally expect from their technical service providers.
Under these SLAs, Liquid Collective’s Node Operators are required to perform in the top 50th (-1σ) percentile of all ETH staking providers that operate 100+ nodes, based on deterministic performance on the consensus layer. Once fully implemented, failure to comply with the SLAs will result in Node Operators reimbursing the Liquid Collective protocol for missed reward opportunities.
“Implementing Node Operator Performance SLAs is a testament to Liquid Collective’s commitment to building a protocol that meets the benchmarks set by professional service providers, heralding a new standard in the liquid staking ecosystem,” said Matt Leisinger, CPO at Alluvial, a team supporting Liquid Collective’s development. “We’re proud to have supported this effort alongside the ecosystem-leading experts in Liquid Collective’s Node Operator Working Group.”
The Rated Validator Effectiveness Rating (RAVER), developed by the Rated team and already in use by numerous staking providers, has been chosen as the benchmarking tool. This metric is not just a measure of validators' relative "health" but also a crucial indicator of an operator's ability to maximize consensus layer rewards over the long term.
“The introduction of service level agreements for Node Operator performance by Liquid Collective marks a significant milestone in liquid staking, raising the bar for how protocols offer guarantees to their stakeholders,” said Elias Simos, CEO and Co-Founder at Rated Labs. “At Rated Labs, we believe that these SLAs, based on the public node operator performance benchmarking methodology underpinned by the Rated Validator Effectiveness Rating, will set a new precedent for the LST industry by ensuring Node Operators adhere to objective, replicable, high-performance benchmarks.”
“This development is a crucial step toward enhancing the reliability and performance of Ethereum staking providers. We are eager to see the positive impact these SLAs will have,” said Josh Leavitt, Director of Product Management at Coinbase Cloud.
"Being a Node Operator on Liquid Collective means that you are among the best blockchain infrastructure providers for institutions," said Joshua Faier, Senior Product Manager of Staking Risk and Reporting at Figment. "Having an SLA in place will ensure operators continue to focus on being top performing validators while also maintaining best-in-class risk management practices."
The methodology for measuring and benchmarking performance was made public this week by Liquid Collective’s Node Operator working group under a Creative Commons license, providing an open and transparent resource for other staking operators across the Ethereum ecosystem to objectively evaluate their performance. The performance methodology meaningfully raises the bar for how to evaluate “good” staking operator performance by providing a transparent and objective method to self-assess performance, as well as to compare performance with other professional operators.
The implementation of these SLAs will be gradual, with a three-month grace period for development and evaluation, encompassing monitoring, reporting, developing programmatic protocol parameters, and protocol upgrades for enforcement. Liquid Collective is committed to regularly reviewing the benchmark calculation and value with stakeholders to ensure it continues to reflect enterprise-grade performance.
Liquid Collective’s aim is to ensure transparency and objectivity in performance measurement, enabling anyone to calculate, validate, and verify these metrics. This initiative not only assures contractual performance from Node Operators but also positions Liquid Collective as the first liquid staking protocol to provide such a high level of assurance to users regarding the performance of the protocol’s Node Operators.
To provide feedback on the performance methodology underpinning Liquid Collective's performance SLAs, use this form, or, open an Issue in the repository here. Stay up-to-date with the latest developments from Liquid Collective’s Node Operator Working Group by following Liquid Collective on X, LinkedIn, or subscribing to monthly Liquid Collective Updates.
