HashQuark is a staking service provider under HashKey, whose parent company is Wanxiang Group, an early backer of Ethereum. We have been running over 50 nodes, such as Ethereum, Polkadot, Cosmos and Klaytn. We’ve also developed several toolings for some projects, including PolkaCube and KLAYPortal, which won the grants from Polkadot and Klaytn. Based on the validator business, we’ve cooperated with several leading institutions, token funds, wallets and exchanges.
Why ETH staking?
There’ll be a lot of benefits from Ethereum’s transition to PoS: more secure, more energy saving, and more democratic in governance. However, these can’t be achieved until the completion of the Serenity update.
Ethereum staking is a way to participate in network consensus and a way to grow with Ethereum. By participating in the Ethereum staking, users can reap annualized yields in excess of 5%. Considering the potential price increase, it’s much higher than the returns offered by banks. Therefore, a lot of institutions choose to lock their money in it, but some of them don’t have the expertise in it.
This is a great opportunity for staking service providers. The market cap of PoS protocols has accounted for over 50% of the whole crypto market cap. With the emergence of more new valuable projects adopting the mechanism of PoS, including Solana, Cardano and Polkadot, the PoS maket share is expected to grow more quickly. Among them, Ethereum plays a key role both in market cap and ecosystem. Now over 9.2m Eth has been staked, with the staking value reaching over $29b. There’s a huge potential underlying the Eth 2.0 market.
We’ve been following up with the Eth 2.0 since its testnet and have actively joined its ecosystem by holding events and providing professional staking service.
In SSV, the validator private key is separated into 4 parts and kept by the operators. None of them can take unilateral control of the validator and the whole network is decentralized and trustless. Moreover, as there are 4 operators, a certain number of faulty nodes (up to the threshold) can be tolerated without affecting validator performance.
Some centralized exchanges also provide Eth 2.0 staking services. However, the keys are held by these platforms. If they don’t perform well or some of their staff do evil things, they may suffer slashing penalties, which will result in significant loss in Eth staked. There have been many slashing cases since the launch of Beacon Chain. Some staking service providers also have semi-decentralized solutions. The disadvantage of such solutions is that the withdrawal key is held by the platforms. Users may risk the failure of withdrawal.
In SSV’s design, each interested party benefits from the network. Validators can control the withdrawal and validator private keys. Operators can receive rewards from providing infrastructure service. They can also maintain and upgrade nodes easily and the risk resistance capacity will be improved, such as the risks of offline time, being hacked and bad performance.
After SSV runs stably on Eth 2.0, it can also be applied in other PoS protocols, which is a valuable experience to learn.
What problem does it solve for you?
It provides a reliable and secure Eth 2.0 infrastructure solution. It’s an option for everyone. Individuals, staking pools and cex can all participate in the network. In addition, it’s a decentralized solution, which is a great support for our staking service.
How will it affect / improve your service
As a staking service provider, SSV’s solution provides us an opportunity to improve our staking service, making it more secure and decentralized as users do not have to worry about the risks of private key leakage and single point of failure. Running a validator key on 4 different setups makes it more decentralized, which attracts more users to participate in Eth 2.0 staking.
Tell us about your experience so far with running a node.
We’ve been researching on the project since its early stage. So far, we’ve been running the SSV operator node smoothly. The whole process goes successfully from the generation of node private key to docker deployment. As an operator node, we hope that it’ll add more statistics for operators, such as the block info, so that we can serve the validators better.
The future of ETH Staking
Where do you see the Ethereum staking ecosystem after the merge?
After the merge, Ethereum will turn to PoS completely and users can withdraw ETH staked. The staking mechanism will be more reliable and more users/institutions will be interested in staking. As for the staking ecosystem, more products are expected to come out to meet the needs of the market, for example, decentralization and performance demand for validators and liquidity staking demand. This is great opportunity to improve the Ethereum staking ecosystem.
In your opinion, what role will SSV play?
One has to deposit 32 ETH to run an Eth validator and can’t withdraw tokens until the withdrawal function is achieved/lock-in period is ended. To solve the liquidity issue, liquid staking products appear, including Lido, RocketPool and some solutions provided by centralized exchanges. There’s no amount limit for users to participate in the Eth staking. They can use their tokens in Defi and earn more yields.
To address the complicated problems in running validators, some exchanges or some service provider choose to run validators in a centralized way while some will choose reputable service providers to run validators in a semi-centralized way. These solutions make it easier for users to participate in staking, but they are centralized in essence. The biggest risk is single point of failure.
However, SSV is the last piece of the puzzle and provides a solution in a decentralized way. As staking infrastructure, it will be perfect to combine with other staking protocols/services.
HashQuark is among the early staking service providers and have been running over 50 nodes. We give first priority to security. We have established a 24/7 zabbix and grafana monitoring system, node warning system and redundancy and disaster backup mechanism. We also have a DEVOPS auto maintenance system, which provides reliable and stable service for users. Besides, we have been running over 10,000 Ethereum validators and have both experience in centralized and decentralized solutions. We’d love to share our resources with good projects and contribute to the ecosystem in technology and promotion.
HashQuark validator address: