Interview with Hendrik Hofstadt of Certus.One
We asked Hendrik’s opinion regarding several topics such as decentralization, incentivisation and challenges in context of our Staking Ecosystem Case Study.
Certus One is the premier validator for distributed ledger technology (DLT). Leveraging cutting-edge enterprise architecture and proprietary technology, Certus One offers unrivaled performance for proof-of-stake blockchains.
SR: How do we ensure and incentivize further decentralization within the staking ecosystem?
HH: Delegator education is one of the most important aspects. Over time we’ll see increasing signs of voter apathy because people buy ATOMs not because of their interest in the ecosystem but because of the associated yields. This class of investors will pick whichever option is the cheapest and easiest. Educating people about the risks of staking i.e. slashing and incentivizing them to hedge their risk is one of the only options I see to naturally support decentralization.
SR: What are the biggest challenges for Proof of Stake and Staking, that we still have to overcome or may still face?
HH: There is a huge challenge for wallet providers that need to offer staking to their clients but also have to educate them about unbonding times, slashing risks etc. We are still early and people might be surprised if they suddenly cannot move their assets anymore or lose tokens in a slashing event.
Additionally coordination in such a decentralized system is really hard but recent security patches in Cosmos SDK have shown that with proper processes in place, this problem is solvable.
SR: What do you consider to be the most important aspects to attract delegators to your staking service?
HH: Our service is characterized by our technical excellence. Having written the knowledge base that has become the de-facto standard for validator operations, we apply years of systems and security experience to provide the most stable and secure services. Also, we built a strong delegation contract and accounting system to fulfill the compliance criteria of institutional investors.
SR: What do you consider sustainable incentives models for proof-of-stake blockchains? At which point gets a high inflation harmful for the blockchain ecosystem? What is the best trade-off to reward blockchain keepers sufficient, but don’t dilute holders too much? Is there a magic formula to this?
HH: Depending on the intention of the network and token, different models yield better results. For a network like Cosmos it absolutely makes sense to heavily dilute holdings of non-participants of the PoS system as the whole intention of the network is to provide security and stability. For other throughput focused chains like on hosting a stablecoin, a system based on only fees makes a lot more sense.
SR: Which value-added services or products are the main focus for you at the moment? (e.g. insurance, governance dashboards, staking mobile wallet, custodial services, open source contributions, community meetups etc)?
HH: We’ll continue our efforts to provide the community with tools like our Stargazer API to make building new products easy, continue our security research efforts and open source contributions to the core code of the projects we work with. On the institutional investor side we’ll improve our accounting tools and expand our service portfolio to offer a full turnkey solution.
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