SLURP-29: Strategic Partnership with Staking Rewards

SLURPs
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Abstract

This proposal seeks stake.link DAO approval for a strategic partnership with Staking Rewards, a leading digital asset staking platform that offers comprehensive data, insights, and tools for both individual and institutional entities. The following outlines the scope and terms of the partnership.

Staking Rewards Overview

Founded in 2018, Staking Rewards is a trusted brand in the staking industry, servicing over 3 million individuals and enterprises. Their platform supports over 100 blockchains and features partnerships with 70+ verified providers. Key highlights include:

  • Verified Staking Provider Program ensuring trusted staking options.
  • Robust API feed, integrated with companies like Coinbase and Bitcoin Suisse, delivering 1,250+ unique data points across 167 assets and 100,000+ validators.
  • Advanced analytics, staking calculators, and market data tools for seamless portfolio management.

Stake.link first connected with Staking Rewards in mid-2024 when Core Contributors initiated outreach to include LINK staking data on the Staking Rewards platform. Recognizing strong demand for LINK staking, Staking Rewards expressed interest in a broader relationship. Negotiations have since produced the strategic partnership terms outlined below.

Proposed Framework and Terms of Partnership

Staking Rewards and stake.link have agreed to the following partnership terms:

  1. Revenue Sharing:
  • Staking Rewards will receive 50% of Core Contributor Fees from referrals made by Staking Rewards to the stake.link protocol.
  • This revenue sharing clause applies solely to Core Contributor fees generated by LinkPool.
  1. Incentive Structure:
  • Referral Tier 1: Up to $2.5m Staked (LINK and METIS) from Staking Rewards to stake.link: 100,000 staked SDL at 4-year lock
  • Referral Tier 2: Up to $5m Staked (LINK and METIS) from Staking Rewards to stake.link: 200,000 staked SDL at 4-year lock
  • Referral Tier 3: Up to $7.5m Staked (LINK and METIS) from Staking Rewards to stake.link: 300,000 staked SDL at 4-year lock
  • Referral Tier 4: Up to $10m Staked (LINK and METIS) from Staking Rewards to stake.link: 400,000 staked SDL at 4-year lock

Rationale

Staking Rewards is a trusted name in the staking space, providing reliable data, insights, and staking products for millions of users. Their platform supports over 100 blockchains and partners with top providers, ensuring access to trusted staking solutions. Their API integration with major platforms like Coinbase and Bitcoin Suisse further demonstrates their credibility and stature in the space.

This partnership aligns with stake.link’s long-term goals by:

  • Driving TVL growth and visibility
  • Expanding reach among retail and enterprise users, unlocking opportunities for broader adoption

With Staking Rewards’ extensive reach and proven track record, this partnership has the potential to significantly accelerate stake.link’s adoption and impact.

Conclusion

We believe this strategic partnership represents a pivotal moment for stake.link. Staking Rewards’ established reputation and industry reach uniquely position both parties for mutually beneficial growth. Their professional values and core ethos align closely with our own, creating a strong foundation for a long-term, symbiotic relationship.

Approval of this partnership will enable stake.link to expand its presence, attract more stakers, and solidify its position in the staking ecosystem.

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Great slurp! I am curious;

Will these locked sdl (potentially 3.6m resdl) be participating in governance?

I can see how our current structure avoid a single entity controlling votes persay but long term with more interest i can forsee a situation where (an) institution locks enough resdl to bully the “community” out of being able to represent the community via the representative spots. Although i admit this situation is unlikely it is a possibility and after watching LIDO get strongarmed by VCs i would rather not have us in that situation.

I do acknowledge they will have a vested interest in the future of the protocol but since this resdl will be “free” essentially its a worry i had.

Any thoughts on the topic are much appreciated .

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Hello @Michael,

My name is Tobi, and I’m part of the Staking Rewards team. We’re collaborating closely with Metis and the stake.link team to ensure this launch is a major success. Our focus is on driving adoption, usability, and overall growth within the staking industry, uniting staking communities across ecosystems to represent the interests of stakers.

While we do not use our voting power for personal gain, we may challenge decisions that conflict with the broader interests of the staking community.

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Nice to meet you Tobi! As 1/2 the community reps its going to be great to have you on board. Fee free to reach out on telegram or discord if you have anh concerns or questions

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Stake.link first connected with Staking Rewards in mid-2024 when Core Contributors initiated outreach to include LINK staking data on the Staking Rewards platform. Recognizing strong demand for LINK staking, Staking Rewards expressed interest in a broader relationship.

So is this deal providing entry to their Verified Staking Provider Program?

I see that for Ethereum staking that they have many providers who haven’t been verified. Those that are verified do have their listing boosted but that is less help in our situation as we are the only Chainlink LST. Perhaps we could have been listed without this strategic relationship?

What do we gain from the partnership other than verification? We will be promoted on the landing page for example?

Will these locked sdl (potentially 3.6m resdl) be participating in governance?

This is an excellent point and is why we should be wary of decentralising governance too much or too rapidly. Even if larger entities are able to influence community elections to their benefit they will not be currently able to exert undue influence due to the 5/7 majority on the Council. Further decentralisation does pose a risk however.

My only other comment would be that in a positive market the dollar amounts provided for the referral tiers could be reached fleetingly. It may be better to set targets in amount of tokens rather than dollar values.

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Very happy to have you on board and looking forward to collaborating with your project.

Few questions.

  1. Can you discuss your business model?
  2. Correct me if I’m wrong, but am I correct to presume that in essence you have clients (x,y,z); and these clients seek a way to stake their retail customers’ digital assets. So it seems like the clients (x,y,z) work with you to help the customers stake those assets. In forwarding clients (x,y,z), staking request, you then partner with an entity such as stakedotlink to enable staking for the customers of clients (x,y,z). Is that more or less correct?
  3. If so, my final question is, who ultimately has custody of the liquid staking token? Is it Staking Rewards? Is it Clients (x,y,z)? or is it the retail customer who is using one of client’s platform?

Thanks again, and looking forward to this partnership.

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Hi @candide

Thank you for your questions. Let me elaborate:

  1. Our business model operates on a revenue-sharing basis with liquid staking protocols. We split revenues from the staking fees charged on the volumes coming through staking rewards.

  2. Yes, that’s correct. We act as an aggregator or marketplace, working with providers offering staking opportunities, such as liquid staking. We present these opportunities to our users, facilitate staking transactions into specific protocols, and provide monitoring capabilities for staked positions.

  3. The customers, whether retail, high-net-worth, or institutional, retain custody of their tokens by connecting their own wallet solutions. Staking Rewards is a facilitator or channel partner, not a custodian.

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The Verified Staking Provider program primarily targets operators running validators. Our partnership with StakeLink extends further, positioning it as a prime Liquid Staking Token (LST) on Metis. We will provide a seamless end-to-end staking user flow, covering discovery, staking, and monitoring.

This deeper integration on our platform is designed to support and amplify the Metis LST launch effectively.

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Question on the incentive structure:

What happens below $2.5 million staked; and above $10 million staked?

And is the incentive agreement as follows–> if there is up to $2.5 million staked link/metis, THEN, at that point in time Staking Rewards would receive 100,000 staked SDL at 4 year lock? (and so on…)

Is that correct?

Where can we learn as much as possible about Staking Rewards strategic reach; what would be the best place to review publicly available data regarding partners (I do see Coinbase and Bitcoin Suisse).

What can Staking.Rewards do after the 4 year lock; is it in essence in the Staking.Rewards treasury, and at any point in time, they can either continue being a voting member, or they can choose to sell in open markets?

ty,

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I’ve reviewed the proposed partnership with Staking Rewards, and I think it’s a very promising initiative. However, after going through the discussions in the community, I’ve gathered some key concerns that I’d like to raise. Apologies for the belated response, but I hope this feedback is helpful for refining the proposal.

  1. Lack of Timelines
    Without defined timelines for achieving the staking tiers, how can we ensure there’s a clear focus and urgency for Staking Rewards to deliver results? Timelines are crucial in performance-based partnerships.

Would it make sense to include a timeline or periodic review system for the staking tiers to add clarity and accountability?

  1. Tier and Reward Denomination
    The tiers are denominated in dollars ($), but the rewards are issued in SDL. This structure could lead to complications due to price volatility. If SDL’s value fluctuates significantly, it could impact the perceived fairness or effectiveness of the reward structure.

Would it be more practical to denominate both tiers and rewards in USD to avoid the challenges of fluctuating token prices? This could make the system simpler and more predictable for all parties involved.

  1. Exclusivity Concerns
    Another potential risk is related to the lack of exclusivity in the partnership. Once Staking Rewards achieves a tier, they could potentially withdraw liquidity and move to another liquid staking token (LST) provider while continuing to earn reSDL fees. This could siphon liquidity away from stake.link after the initial targets are met.

Could the proposal include some form of exclusivity agreement or additional incentives to ensure Staking Rewards maintains long-term alignment with the protocol?

These seem to be the main issues discussed by the community so far. I hope this post helps consolidate those concerns into actionable feedback. I’d love to hear further thoughts on these points and whether they could be addressed to strengthen the partnership framework.

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I was thinking about this yesterday and last night. Either the need of a time function, or some form of expiry to the terms. In essence, Staking Rewards could maintain a governance position, but for a limited amount of time, potentially subject to renewal.

Can exclusivity be positioned in the crypto-ecosystem? Is it in the best interest of the spirit of the ecosystem?
If I’m not mistaken Ari, I believe the LST is in the sovereignty/possession of the retail user (as described above by representative) or the institution with which staking rewards collaborates. Hence, I do not think this is a major issue. And I believe the SDL proffered is flat-- Ari, correct me here if im wrong. The dollar denomination is for the amount of value that is locked in relation to metis and/or link.

In all, I am of the opinion partially that we are giving perhaps too much reSDL for a marketing pivot. I’d be open to re-synthesizing the tiers to an exponential function rather than the linear one presented.

From the above to something like:
Below $500k Staked Tokens ::: nominal staked SDL --like a initial partnership NFT to ensure their customers have access to staking.

Ref Tier 1: $500k Staked Tokens :::: 20,000 staked SDL at 4 year lock
Ref Tier 2: $1.5 million Staked Tokens ::: 60,000 staked SDL at 4 year lock
Ref Tier 3: $4.5 million Staked Tokens ::: 180,000 staked SDL at 4 year lock
Ref Tier 4 and above: 10-12 $million Staked Tokens ::: 540,000 staked SDL at 4 year lock

And perhaps we can add a X time factor. So as an example a 6 month, 1.5 year, and 3 year partnership agreement, at which point we can review terms of engagement.

However, Ari, I do not see how they can return their reSDL NFT after the time period. Can such an agreement be entered by way of smartcontract? Once received for accomplishing a specific tier for us, I do not see how they can return it to us by way of verbal/written non-blockchain agreement. Therefore, I do not necessarily agree that they should return, especially if they accomplished the task of helping us secure an example instance of $4.5 million TVL–I would suggest they keep their reSDL NFT position.

I would ask the team to explore further market share captured at this time by Staking Rewards; and provide a reasoned approach to reSDL proffered.

Eric, if you’re there and want to opine here as well…it does seem like we are giving a full nodal position (EDIT: 1/10 – 1/20th nodal position*) in return for marketing and awareness. The end-user on their end does not appear to necessarily obtain educational know how on how/when/where to stake; on the other hand, it does simplify it for folks that just want to stake their items. I don’t know–it seems like it’s back to the user handing over their trust to another entity—it’s trustful, not trustless.

Further, when the end-user uses the Staking Rewards interface, are they interacting with any other smart-contracts? or is it a direct link to our smart contract? Any elements here that need to be audited? Any porous smart contract interfaces at play? Any other agreements end-user getting into? Any potential porous constructs that need to be audited?

thanks,

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Thank you for the detailed response, Candide! I appreciate the effort in addressing these points.

You mentioned

But there’s a broader governance and alignment concern that needs to be addressed imho. If Staking Rewards retains their liquidity within our ecosystem, they have genuine skin in the game, and it’s entirely reasonable for them to have governance power and influence over protocol decisions. This would reflect their active participation and alignment with stake.link’s long-term goals and would make stake.link stronger.

However, if they were to withdraw their liquidity after hitting a tier and redeploy it to another LST provider, while still retaining governance power and earning rewards through reSDL, their incentives would no longer align with the protocol’s best interests. In fact, this misalignment could lead to a situation where they are incentivized to vote for proposals that harm our ecosystem while benefiting the LST provider they now support with their liquidity. This would undermine the integrity of our governance system and pose significant risks to the protocol’s future.

Want to clarify that I’m simply raising concerns about the current proposal, with the aim of opening up a discussion to explore potential ways to minimize any associated risks. My intention is not to criticize but to ensure we collectively consider and address any scenarios that could pose challenges to the protocol’s long-term stability and alignment.

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The issue on the strategic incentive is neither token nor dollar denomination.

The issue is date on which arrangement is made.

An internal control or standard is needed that defines the two parties’ resources and risk adjustment on that date.

The constant, that very standard is as follows:

#ofLINK tokens/ fiat denominated price on that date = constant (K).

The reward tier is defined by that underlying mechanism so it is fair to both parties.

This metric can be taken under consideration as dialogue between the two parties continue; unless both parties have agreed to denominate the agreement to solely # of tokens. However, denominating in #oftoken does pose a continuing risk to both parties…as, if price of token increases, our counterparty is less likely to meet their tier 4 goal; and if price of token decreases, our tier 4 agreement is simply diluted, defeating the purpose of denominating in #oftoken.

I strongly urge the consideration for an internal standard on date on which SDL et. SR felt they reached a collaborative agreement.