Welcome to another week of the Validator digest! Blockworks has released an insightful report (funded by Obol and Liquid Collective) surveying institutions on their thoughts on Ethereum staking. I wanted to highlight a few things that caught my eye.
66% of respondents said they were familiar with Distributed Validator (DV) technology. There may be some bias here given that the report is funded by Obol, but nonetheless, this gives hope that institutions will keep up to date on stacks that could help mitigate operational risks and ultimately network wide failures. Let's just hope that they also aggressively adopt these measures.
74% of respondents answered that they understand the risks of restaking. This one is a bit concerning because I don't think there is enough tangible information to reach any conclusion on restaking risks. So far, the only information we have is that restaking will have some form of slashing and that's pretty much it. No AVS has publicly announced what their slashing schedule will look like.
76% of respondents felt comfortable staking using an LST. This is much higher than I expected and shows how comfortable people have become with LST protocols. The next step here is hopefully for these learnings to transfer from crypto institutions to non-crypto institutional players. I'd love to see ETFs of LSTs one day.
Protocol updates
BNB Chain
Here is a reminder that BNB Beacon Chain is being sunset on November 19th. I don't think the Beacon Chain has even been really actively used, so the impact should be limited.
BNB Chain is currently going over a proposal (BEP-341) that would let its validators create up to 4 consecutive blocks for scalability reasons. The obvious pushback here is MEV. MEV is constrained by the total amount of transactions a builder can fit in to a single block. With guaranteed consecutive blocks, more diverse MEV opportunities will open up.
Elixir
Elixir has announced that they will launch Phase 1 of their mainnet on October 31st. According to their blog post, they will begin with a limited number of genesis validators, but eventually open up to a broader set of validators. They also teased a Foundation Delegation Program, so this is definitely one worth keeping an eye on.
Ethereum
Christine from Galaxy has shared a mega report on the upcoming Ethereum upgrades. I strongly recommend reading through this to stay up to date on what we have in store for next year.
Solana
Solana is going through multiple testnet upgrades and downgrades in anticipation of the Agave v2.0 release. After the testnet runs show stability, we can promptly expect the upgrade to go live on Solana mainnet.
If you want to learn more about all the changes with Agave v2.0, please check out their official blog post.
Random ramblings
AI memecoins are all the craze right now. I wonder how long it will take before we see an AI agent promoting or running a validator. Similar to how it's doing now for memecoins, I imagine the AI agent will keep taking over mindshare on social media and push more stake to its own validator. What sort of objectives will the AI agent have for its validator? Will it become an unstoppable force capturing more stake than we would feel comfortable? Will social consensus be the only defense mechanism against such a scenario?
Chorus One put out a piece discussing that APR is a subpar method of evaluating validators. This is true even for LSTs and LRTs, but I don't think we're ready to have that discussion yet. This article further highlights the importance of tools like Rated which help stakers properly evaluate validator performance.
Lavender.Five has shared their thoughts on how Berachain staking will work out. Berachain staking is unique than most and will require validators to take a more active role in the ecosystem. If you don't have a game plan, now is a good time to begin here and start setting up a strategy.
Here is one more interesting post from Lavender.Five. They gave a nice answer to Smokey from Berachain on some dos and don'ts for newly launching L1s.
Some dos/dont's:
1. don't enable inflation on block 1 or VP will get rekt
2. delegate as much of what you want to delegate through genesis instead of later or VP will get rekt
3. Give Investors vested allocation from genesis, don't send them tokens
4. Create a war room with…
158
Please subscribe to our newsletter if you found this useful! You can always send me feedback on X (https://x.com/proofofjk) or Telegram (@proofofjk). Let me know what protocols you want me prioritized or if I missed any important news!
