Proposal to add vETH2-ETH pool with gradual expansion to allow other ETH2 liquid staking derivatives

  1. General description of the asset/project (include website link)
    https://sharedstake.org
    We are an easy to use shared staking solution for ETH2 validator staking.
    We run the validators currently for our community with planned expansion to enhance decentralization.

At the time of this post we have just north of 10M TVL in ETH and have some 1M live and validators running.

  1. What are the reserve assets and their weights?

ETH - needs a higher weight as this pool should provide exit liquidity
vETH2 - native token minted when users deposit ETH into our platform, and burnt when they exit from our platform.

Future reserve assets we would like to consider for gradual addition: (similiar to the snowswap ETH2SNOW AMM w/ 2k ETH)

  • Lido - stETH
  • ankr - aETHB
  • cream - crETH2
  1. Where are the points of centralization?

We currently own and run the validators.

  1. What are the smart contract risks?

Smart contract is un-audited. Audit is coming via certik in march.

  1. What are the financial risks?
  • Slashing
    Validators can be slashed resulting in loss of user funds
  • ETH price volatility
    ETH price movements can result in a loss of TVL or user principal in terms of stablecoins.
  1. How will this pool attract TVL?
  • Airdrop
    We are offering an airdrop for snow pool stakers and can do the same here.
  • Token geyser
    We can launch the pool ourselves and offer a staking geyser that users can deposit the LP token shell into to accrue rewards in SGT
  • Buyback SGT with pool fees
    If the pool can accrue admin fees on swaps we plan to buy back SGT with it to help price discovery and offer a financial incentive to holding SGT
  1. What is the project’s vision and how does Shell fit into that?

We are a liquid, DeFi compatible ETH staking solution for ETH2,
As such, being liquid is important and an AMM offers a large positive value offering for creating liquidity for the vETH2 token. Both in terms of exiting to ETH/weth or to other protocols.
The yield farming via SGT, or accruing swap fees, or admin fees that are redistributed to the eco-system.

Please note:

  • Sharedstake is willing to pay a SGT bounty from the dev treasury for the implementation or help implementing this pool.
2 Likes

Thank you for your kind suggestions, the pools like Lido - stETH, ankr - aETHB, cream - crETH2, as good they are, is not stable. Lido goes 5x up and stETH gets decimated, which is good from an investment standpoint but not what Shell is looking for a we are a STABLECOIN pool for now. @kenny’s the boss, so please weight in whenever.

My understanding is that this is an ETH-denominated pool? I.e. all assets are nominally pegged to the value of ether? If so, then it should work fine for the Shell market making algorithm.

We only run into trouble if we have reserve assets with different pegs in the same pool. Reserves need to be stable relative to each other; however, the reserves do not necessarily need to be stable relative to USD.

Kenny, is the MM algo algo open sourced? Whose codebase did we reference.

It appears to me he is not suggesting we deploy three pools, one between lido and stETH, one between ankr and aETHB, and one between cream and crETH2.

He’s saying that we deploy one pool between stETH, aETHB and crETH2. If all of these are flavors of ETH, then I would think that a pool like this would be just fine, being different flavors of the same numeraire, ETH.

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Yes, everything is open source. People are always free to deploy and run a pool themselves. We are happy to support people at a technical level in any way we can.

Hi, this is correct.
We are hoping for a single pool with all the assets as they are similarly pegged to eth.
We believe this will attract more TVL than pools with just one protocol in them albeit at the cost of causing a higher demand on ETH.

An additional request, if possible, would be to have a pool where new ETH2 variants can be added later as many shared staking platforms are waiting on developments from the EF to launch in the field of shared validator credentials.

We are hoping for these assets:

  • WETH
  • Sharedstake vETH2
  • Lido stETH
  • ankr aETHB
  • cream crETH2

All of these assets are ETH derivatives and are pegged to the value of ETH as you need 1 ETH to get ~1 of any of these assets.
So this would be similar to the btc pool that is live on the shell site now. Kenny mentioned this I think.

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I see the shell protocol v1 code on github but on the shell protocol site it says v2. Is this code also open sourced?

Also any deployment instructions would be highly appreciated.