A Robust All Weather Staking Solution on Ethereum
We’re excited to announce that Staking Rewards has teamed up with Spool, to create an all-weather liquid staking solution on Ethereum.
Staking Rewards Optimized ETH (srETH) is a robust liquid staking index that minimizes volatility and offers a more predictable yield for long-term Ethereum investments.
Why we created srETH
Following the Shapella upgrade on the Ethereum network on April 12, net staking inflows have surged, growing by over $100m per day at the time of writing. The meteoric rise of staking on Ethereum this year has in part been driven by the Liquid Staking Tokens (LSTs) market, opening the floor to investors with less than 32 ETH to stake their holdings.
While this presents an exciting opportunity for all Ethereum holders, the staking rewards market is still volatile and can be difficult to navigate.
Staking should produce more reliable returns for everyone over the long-term. However, rewards earned from staking always fluctuate, making it difficult for investors to plan ahead. This volatility is caused by factors such as the number of participants staking and transaction volume on the network.
The APY offered by LSTs has varied significantly since the Shapella upgrade was completed, ranging from 3% to as high as 10%. As more people stake their assets, the difference in APY% is expected to become even greater, which could lead to increased fluctuations in the rewards market. As a result, yields are expected to become more similar to the lower end of the spectrum, around 3% – 5%. The increased volatility is caused by factors such as a long validator queue, which can reduce the net APY, higher commissions, and varying CL and EL performances. Keeping track of these changes can be difficult, but srETH simplifies the process for you.
A comparison of srETH APY% vs. popular LSTs
srETH mitigates the impact of reward market volatility, giving you a more robust way to stake your ETH over the long-term.
How srETH works
srETH is a liquid staking index that embraces the principles of an All Weather Fund. By leveraging strategies from premier ETH staking providers such as Lido, Rocket Pool and Frax Finance, selected and vetted by both Staking Rewards and Spool, srETH always ensures the best vanilla staking rewards on ETH.
srETH then allocates a smaller percentage of user funds to a diverse selection of track-proven LSTfi strategies. The chosen strategies have all shown strong resilience across various economic environments and are proactively kept in check by our team of unbiased researchers.
This meticulously managed approach is made possible through the implementation of Spool’s Smart Vault technology, ensuring the portfolio remains well-positioned in changing reward market conditions.
Spool’s permissionless smart-contracts have been comprehensively audited by leading firms Quantstamp, Zokyo, Peckshield, Trail of Bits and Chain Security.
srETH is powered by the following key features:
- Automated portfolio optimization: srETH dynamically allocates funds across leading DeFi protocols, such as Lido, Rocket Pool, Frax, and others, ensuring diversity and minimizing volatility for investors.
- Robust rewards: The index uses risk-optimized yield strategies that are specifically designed to produce reliable yield for Ethereum investors over the long-term.
- Top-level staking and LSTfi: srETH provides the foremost vanilla staking rewards on ETH, backed by additional yield from Staking Rewards’ trusted LSTfi partners.
- Guidance from staking pioneers: srETH is proactively kept in check by our team of unbiased researchers committed to your staking success.
The Staking Rewards community can get early access to srETH by signing up to our waitlist.
We’re excited to continue contributing to the growth of the staking market with our first official liquid staking index. Join us on our journey to minimize volatility and generate a more predictable yield for all Ethereum investors. Learn more about srETH and get updates by joining our community on Discord.