Introducing Kiln’s Ethereum Staking Pool
Get ready for the launch of Kiln’s Ethereum Staking Pool in the second half of September! Major wallets are partnering with us to provide seamless access to the pool through their platforms.
This is the first staking service to be launched on the latest version of the Kiln On-Chain platform, which we announced last week as the first-ever 100% on-chain white-labelled staking platform in the Ethereum ecosystem.
The pool enables staking of any amount of ETH with rewards received daily, broadening Ethereum ecosystem participation. It also allows integrators to seamlessly incorporate pool access into their workflows, enhancing accessibility.
Integrators enjoy full autonomy; setting fees, custom liquid staking tokens, choosing operators, and tailored user experience. Users and assets stay on their platform, while on-chain commissions eliminate external referrals and off-chain invoicing. The whole system runs exclusively via smart contracts in a transparent and auditable way.
Key advantages for both stakers and integrators
Stakers
Stakers who choose to be part of the Kiln pool will experience a range of benefits that include:
- Stake any amount of ETH: the pool is open to all ETH holders, ensuring accessibility across the board. It's not just limited to those with less than 32 ETH.
- Reward smoothing: rewards are distributed more consistently, mitigating the uncertainty experienced by solo stakers relying on dedicated validators and block reward / MEV variability.
- Automated compounding: validator rewards seamlessly cycle back into the pool, fuelling the creation of more validators and accelerating pool growth.
- Near immediate rewards: stake and receive rewards within 24 hours. Your stake's value increases daily based on pool rewards reported by oracles, accelerating reward accumulation.
- [Optional] Liquid staking tokens: all pool stakers receive soulbound tokens, representing stake and withdrawal rights. Integrators may instead offer liquid staking tokens (transferrable), symbolizing stake ownership, withdrawal rights, and transferability. These tokens could be used as collateral for rewards in other protocols, alongside ongoing staking reward accumulation.
- Transparent operations: all the above operations are done in a fully automated, publicly auditable way via Smart Contracts.
Integrators
Integrators seamlessly integrating pool access into their platform take full ownership of the staking experience. The key benefits for integrators are:
- Recurring revenue stream: generate recurring commissions from staking rewards, seamlessly delivered 100% on-chain. Tailor your fee structure and sidestep invoicing complexities.
- User retention and engagement: Retain users and their assets within your platform; no need for external referrals. Staking is the stickiest product in Web3.
- Branded user journey: craft a tailored user experience that aligns with your platform's identity, branding and workflow.
- Custom solutions: Introduce custom liquid staking tokens (or not) on top of the underlying Kiln pool. Customise token symbols and select token models like 'aTokens' (AAVE-style) or 'cTokens' (Compound-style) based on your preferences. Integrate across multiple pools and operators for diversity.
- Transparent operations: all the above operations are done in a fully automated, publicly auditable way via Smart Contracts.
Bootstrapping organically
In a time where pre-funding and liquidity injections often take centre stage, the launch of the new Kiln pool is charting its course through a different path: organic growth.
Introducing a new Ethereum staking pool with limited liquidity poses distinctive challenges. Early participants encounter dilution as the pool expands and grapples with the occasionally lengthy validator entry queue. The queue presently is around 20 days, having decreased from nearly 50 days in recent months following post-Shapella activity.
In the initial growth phase, as staked assets accumulate, rewards from new validators take longer to materialize. This leads to a suppressed Gross Rewards Rate (GRR) due to the division of rewards and pool value among a larger user base.
The growth of the Kiln Staking Pool therefore relies heavily on the support and participation of our integrators and early adopters. Their engagement and involvement are essential for the success and expansion of the pool.
Fluctuating gross rewards rate (GRR) and transparency
GRR represents the annualised proportion of rewards received by the pool relative to the total amount staked in the pool, represented as a percentage.
Opting for organic growth instead of pre-funding, a notable feature in the initial ramp-up of the pool is the GRR's initial dilution and fluctuation. Specifically, GRR will be at or close to 0% for at least the first ~20 days after the first deposits, as the initial validators await activation.
It is difficult to be precise about how dilution and GRR fluctuation will play out as the pool starts out. This is because there are many factors outside of our control that influence the outcome such as the length of the global validator activation queue and the incoming deposit volume.
As the pool grows and accumulates more deposits, the GRR will steadily increase toward what would normally be its full stable rate. The stable rate is typically aligned with the network-wide average reward rate.
Based on the current validator queue and anticipated deposits, we could potentially reach about 80% of the standard stable rate in roughly 50 days. While not assured due to the factors mentioned earlier, we'll consistently update the pool's status as integrators grant user access. These updates will be available through our blog, social media, integrator apps, and workflows, in addition to information shared independently by our integrator partners. Additionally, a Dune Analytics dashboard will be available for complete transparency.
Negating the centralisation and concentration of staking
Excessive control by certain staking services can harm Ethereum's censorship-resistant properties.
The Kiln pool presents a solution to counteract these negative affects. A variety of strong staking pool options reduces the centralization risk and encourages users to distribute their staked assets across different pools run by different node operators, promoting network decentralization.
Early adopters who believe in the need to address this problem and believe in Kiln’s vision play a pivotal role in the pool's growth and liquidity bootstrapping.
Multiple integrators, single pool
While Kiln assumes responsibility for managing and operating the underlying pool, including the infrastructure and validator operations, integrators will grant stakers access to the pool via their platforms.
The central pool is a global liquidity source, with integrators owning a share based on their deposits and rewards. Kiln On-Chain empowers integrators to create unique solutions independently, regardless of other solutions built on top of the pool.
For example, multiple integrators can each create their own custom liquid staking token (or not) and set their own fees, whilst the underlying pool is operated and managed by Kiln and their validator infrastructure.
The visual below illustrates a potential evolution of the staking pool in the upcoming months:
Conclusion
We're thrilled about the imminent launch of the Kiln pool, and the excitement is building as several major integrators come on board. In parallel, another significant node operator has joined us, set to unveil their own pooling service and integrations powered by Kiln On-Chain.
The enthusiastic support and involvement of integrators and stakers are pivotal to the Kiln Staking Pool's growth and success. As we look ahead, our anticipation grows to welcome even more integrators and operators to our service, extending beyond our initial launch partners.
Our commitment extends to nurturing a sustainable staking ecosystem and challenging the dominance of a few centralized entities that could hinder the ecosystem's health. By championing decentralization and democratization of staking, we're continuously contributing to the Ethereum staking landscape's long-term growth and prosperity.
The Kiln community, together with our integrators and early adopters, is forging the path ahead for staking. It's an exciting journey we're shaping hand in hand.
Stay tuned for exciting announcements in the coming month!
Contact us to learn and to arrange a demo!
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