Staking as a Core Strategy | EBC11

Well, thank you for staying for the last panel of the day. Um, when I first was asked to moderate a panel about staking that doesn't have any staking providers on it. I was to be honest a little bit nervous. But then once I heard all the stories that people have um I realized that we actually will explore staking from every possible angle from a um a company that's uh a digital asset treasury company using staked assets to a really amazing case of doctors without borders finding a way to connect with web3 communities through staking through a really technical implementation of staking to make sure we get accurate data. and a way for staking companies to actually provide their own liquidity for their tokens.

So, um, my name is Ana Nova. I'm with Galaxy Digital. It's a NASDAQ listed crypto firm. We have asset management, trading, infrastructure. On the infrastructure side, we have GK8, which is where I sit.

It's a custody uh, infrastructure layer. So, we talk with a lot of staking providers. Galaxy also has a staking in business where we validate across many different chains and really build that business with institutions in mind. So how this going to go is uh because everybody has quite a unique take on staking. We'll spend a little bit more time on introduction.

So just please say your name, explain uh your business and how it connects to staking and then we'll just um start basically a really lovely conversation because I think we have a lot to learn here from each other. So, do you have a microphone? I do.

Okay. Excellent. So, let's maybe start with you, Marcus.

Hi, everyone. Uh, I'm Marcus. I'm uh with Balancer. Uh, Balancer is a DAX AMM has been uh onchain for quite a while. Our focus is on EVM chains and um bringing a little bit of what we do first and then on the staking side.

But uh the idea is that balancer is one-stop shop for any strategy to be done on chain in terms of liquidity. either if you're a product a protocol a product a project that wants to provide liquidity for your own token uh you will have the best solution in terms of either concentrated liquidity uh full range uh stable pools boosted pools and I can uh talk a little bit about that later um but on the st so that's for for for protocols that want to provide liquidity to their tokens uh for users that want to find liquidity and do swaps or or anything like that, but also for builders that find new ideas of daxes or AMMs or math pools that they think can be used u let's say an example here that you want to do a wallet or a a vault that is manageable and you have uh a new product to offer to funds or to investors uh that's something that can be built on top of balancer infrastructure. So uh either builders, protocols, dowels uh and and aggregators and solvers they can all find the best solution at balancer. And when we talk about uh staking, balancer has for a long time been partners with most of the staking um uh protocols uh exactly in the to be a source of liquidity for their tokens. So it doesn't if you want that to be liquid that it can be found and can be traded on chain you need to have a pool or a way of doing that and then balancer is a way that uh is always being found to be a good place to put your liquidity in and to get it uh working and then you have full liquidity for your your token.

Thanks Marco. So, it sounds like we'll touch on some interesting questions around yield maximization versus security liquid staking and how what what's your take on that? And um Mario, please when you told me your story earlier, I was just completely fascinated. I think it's an amazing story. So, please just tell us how Doctors Without Borders have gotten into not just staking, but liquid staking.

Thank you for that. Well, hello everyone. Thank you for being here. My name is uh Mario Stefan and I work for I'm a bit of a UFO here. I feel I work for a nonfor-profit organization called Doctors Without Borders.

You might be familiar with them. Very quickly, we provide medical care in situations of war, natural catastrophes, and uh situations that we call sanitary deserts where people simply don't have access to health care. Um I am in charge of our web 3 projects out of uh our Geneva office uh part of a very exciting and a very cool ecosystem which is the Swiss ecosystem that was instrumental in allowing us to be here. And so what it is that we do very simply we offer the possibility for Ethereum uh holders to stake part all of their um ETH uh for the benefits of Doctors Without Borders. So the way it works is you go on our page, you connect your wallet.

Uh you decide how much you want to stake. Uh we use the Lido protocol for that. And then you decide among the amount that you want to stake, how much you want to stake for us and how much you want to stake for yourself. And I guess that this is uh something for us that's a bit different. Uh instead of asking people to support us by donating uh their funds, we're asking now to co-create wealth.

uh or maybe just create wealth uh for Doctors Without Borders. But the difference is here that you end up supporting by keeping your ETH. You stay obviously uh owner um of your ETH and uh then the rewards are directly paid for us and we then use those rewards to support our programs uh worldwide. I'm very uh happy to be here because I actually launched this project on this very stage uh a year ago. Um and um we sit today in our vault with over 244 ETH which is over uh a million dollar equivalent uh staked into the project generating uh rewards to support um our projects.

And uh what I want to say is you know simplicity was key uh there. Um I'm not going to bore you with aspect pertaining to philanthropy. But for us it was very important to understand how to speak a language that uh those new communities that we're not used to speak to uh would understand. and that co-creation and the fact that uh you can support us and at the same time you can benefit yourself is as naive as it sounds something completely different and something completely new and something that is actually working. I'll finish just by highlighting the fact that uh of course the objective now is to make sure that not only more people stake into the project but people stake longer and longer and longer because you can withdraw um your ETH whenever you want basically and so for that we've developed um a system of points that we call karma points uh and so basically when you stake for us you get your MSF ETH token and you can lock that MSF ETH token meaning your ETH are locked longer for us.

Um, and that generates comma points and in exchange of those karma points, there's very exciting rewards uh, literally uh, but also the possibility to really be part of a community and create a community where we advance together in support of different causes around the world. So, all it takes is going on our website, connecting your wallet, and that's how it goes.

Mario, thank you so much. Um and and what I want to do a bit later is just jump into the process that you had to go through to actually understand how to launch a project like that within Doctors Without Borders. And Jean, so you next you're running a very cool uh public company in France that is managing a large um treasury of assets and making it available to others. And what's very cool about it staked assets. So please tell us first of all why what is the opportunity?

um how did you decide to do that?

Sure. So u thank you very much Anna. Good afternoon everybody. Um I'm really happy yes to have uh the chance to talk about Reboot Blockchain Corp. So well we are obviously non a nonprofit organization.

So it's a little bit hard to to to talk after you uh Mario but still uh I said maybe we're going to do some something together. Uh so on our side we are um a digital asset treasury company a diversified one which is quite unique uh it's a very singular value propal on on our ecosystem and u we do believe um in the tokenization and for us the way to play the tokenization that's going to rebuild the all the market infrastructure is to secure the most historical and promising blockchain u in the ecosystem and to do that uh It's a it's just a question of uh stake the token the native token of those protocols to be sure that well you u you facilitate the transaction uh and the the the way to validate uh uh new blocks uh in the blockchain. So on our side what we have decided is just to say okay we we so far we are quite blockchain agnostic um we have selected Ethereum Solena uh mainly due to their uh historical presence and the a lot of transaction that you can uh definitely see on those on those chains um and so we uh we allocate part uh of our treasury on on on those tokens and stake them through um uh a subdelegation process because because we are an institutional player uh in the staking field um we do not uh do it by ourselves to avoid a lot of fixed cost to develop our own infrastructure. So we rely on on professional players on that regulated ones. Um and um our mission for for shareholders or stakeholders is just to spot the most promising proof ofstake protocols uh in the future and to participate in securing those blockchain via the staking.

uh we'll see uh I'm pretty sure in a later stage how liquid staking or even restaking could um uh reboost the the staking yield. But uh we we do see this opportunity as a kind of financial instruments like a kind of debt basically with the funding in the uh in the native crypto of the chains and the associated yield that you reach as a staker to participate to the securization of the the the blockchain. So this is our mission. Uh this is what we are doing at reboost. Uh we are a public company as you mentioned.

So listed on Urinx access um and hopefully we we're going to go for an uplisting but uh yeah at this stage this is um this is who we are and the way that we uh we do approach the staking.

So so Jean uh basically if I'm the person who is not comfortable holding crypto or staking crypto let's say I'm a a pens pension fund or I I have certain restrictions. I'm actually able to buy equity in your company and gain exposure to stake assets without having to worry about none of the technology.

Yeah, correct. Absolutely. This is it. So we are uh very attentive to the selection of of our partners as you can obviously as you can imagine and um well the the interest for investors to uh to uh to buy your equities to benefit from the um uh the most historical financial instrument in the world uh which are equities uh which are well known uh in terms of tax in terms of accounting in terms of um transparency as well because you we public company. So we we um we offer these benefits to our uh shareholders uh through our listed equity.

Correct.

Thank you. Thank you very much for that. Um last but not least, uh you did your best explaining to me the underlying uh underpinnings of Lava networks.

You did great in understanding.

I I feel like we got 90% there. But I think it's amazing that you're using staking as a way to ensure a clarity and correctness of information. It's quite an interesting approach. Could you please take us through that as well as just explain some of your recent wins?

Yeah, for sure. Uh so before I jump into uh why we started building Lava? Uh can I ask who here run his own node? Did did anyone run his own node? Okay.

Uh who heard about the term RPC? RPC. Okay, more hands. Perfect. So, basically RPC is the language of blockchain.

And when I like I uh I'm a computer engineering by uh studying I uh um I'm three times founder from Israel. And when I jumped into crypto four years ago, I was shocked that everyone is talking about decentralization, but at the same time when it's coming to data, everyone is trusting a few entities. they going to a centralized provider and they say okay all the data that I want to access from the blockchain which is basically by RPC I'm trusting you to bring it to me but as we dive even deeper we see that nobody actually trusts one provider they go to one provider and the second provider and then they go to run their own nodes and this is when we understood that it doesn't make sense when we speak about decentralization as a tool and accessing to all chains. It doesn't make sense that everyone has to build it from scratch. And this is when the idea of building an access layer kind of aggregating all the node runners in all the geolocation on the world and incentivizing them to give access by competing with each other based on the quality of service you give.

This is how you get the rewards. This is how uh we increase that service that you're going to get next time. And we're using staking in order to ensure their accountability. If you want to get to this pool and let's say you're running Ethereum node, if you want to get to this pool, you need to stake Lava in order to get to the pool with that you actually say I am accountable for the information for the data that I give to you. So if I'm a wallet uh and I want to let my user get access to their wallet and see account balance and make transaction so you know that you're not trusting a single provider you always as a backup with that you get to 100% uptime and privacy and accountability and all of these things.

So this is how I summarize what brought us to crypto. Yeah, thank thanks that's very helpful and actually um something you just said made me think we should take a step back because we have a mixed audience and because I mean we look at the stage staking could be so many things what is definition of staking like where did it start it was very specifically one thing I remember you know when I got into crypto it was really all about ensuring the security of the network that we all wanted to use then it all became about yield generation maximizing yield just became another financial instrument. So, how do you anybody please jump in? How do you balance these two competing properties? Is it all about maximizing yield at all cost?

Let's stake something, restake it, restake it again, restake it one more time. Or is it about security?

Well, yeah, I think this is a very important topic. Uh sometimes people say well uh how can you instake or how can you like think that is correct to have to wait one two five weeks for you to withdraw like let's say Ethereum uh from the staking but sometimes we forget that the idea of staking exactly is to provide security um so as uh Jan was saying you're staking there you are getting paid for it. Of course, you have rewards, but the goal of staking is that you're committing with the security of the that ecosystem that you're participating. So, uh I think that's a a very valid point that sometimes we're talking about, all right, so but if I stake it here or there, that's where I'm going to get yield and restaking. Uh it's really good that that's happening because it's making everything more secure.

But in the end of the day that is that should be the goal uh of of staking right otherwise uh if any everyone decides to unstake uh there's no more uh Ethereum or or blockchain [laughter]

uh yes and and I think just um we'll go to you straight straight after I just wanted to say for somebody who's completely new to crypto we had proof of work of course where you participated by providing electricity compute we had proof of stake where you still have to figure out how to ensure people have skin in the game. So people have skin in the game by putting their money where their mouth is, making sure they're doing a good job verifying the network. If they do a really good job, they get more. If they do a bad job, they get less. So having said that, John, please.

Yeah, I just effectively it's definitely um a very important question. I mean you have I believe that you have to distinguish the um the end user and the blockchain by itself and the way the blockchain is designed. Uh meaning its tokconomics and the and the way that um well the the inflation um is going to impact what you could expect from the yield as a staker or as a just a token holder. So it's really important to dist distinguish that because when you are an investor as you mentioned Marcus you just want to maximize your yield. That's it.

That's your point. And you say okay I'm going to compile the the leverage uh doing liquid staking then restaking then maybe re rristaking etc. And you're going to have a leverage of 10. Uh it's really important on your capital and and sometimes as we we have seen last week uh you do not understand exactly where is the leverage and the credit risk that you bear as an investor. It's like the the the tokconomics of um uh of of a protocols or of a of a blockchain.

If you do not understand exactly how uh the the burning mechanism of the fees, how the inflation of the monetary issuance of token the blockchain is going to put in place and the staking yield that you could reach uh in real meaning deflated by the the the inflation the the new creation of of tokens. you do not understand exactly what is the sustainability of a blockchain and why it's going to be used by so many users etc. So you have the tech, let's say, okay, it's really a a a good blockchain by by design for technology. So you could find some some very good usage on it uh business case, but it's not used why and just have a look on the tokconomics and you're going to understand why this blockchain is not selected by a lot of investors. So

So I I think you're pointing to some perverse incentives, right? because you can have an amazing piece of technology and we have multiple layer one blockchains out there. They all trying to compete with each other for node interest. So that's why we've seen at certain point a run up in yield or you paying 10 so I have to pay 20 so he has to pay 30 and at some point we have a network that costs a lot of money to secure. um if if you were running um like a physical I don't know let's say um infrastructure you would go okay well maybe I have uh some costs associated with security and risk but what what that cost should be and did we at some point see those costs become completely exeagorated so um at you said your treasury is mostly Bitcoin Salana Ethereum and then some um

proof of stake tokens So you you must be selecting them. You're under pressure to select the best performing one from a yield point of view.

From a yield point of view to cover Yeah, of course. To cover or fixed cost and and variable cost and minimizing the leverage on our balance sheet level for sure. So uh minimizing the uh the the dilutive effect for shareholders. But in the meantime, if you have a chain or a staking yield of 15 or 20%, ask yourself why. For sure there is a a good reason and your capital is really at risk of having uh a drill down uh in the value of the token.

So again it's a it's a good balance that you have to find between ST and yield tokconomics perspective for the blockchain depending on on on the number of business case already on the blockchain etc etc. So this is why also some people decide to uh to uh to go through um actors like us uh in order to delegate that kind of um of um of research to be sure that they are betting on the on the good thing.

Thanks John and and Mario. So given that there is all this um well first of all such a big abundance of projects so much to navigate how did you go internally about con first of all convincing doctors without borders it's a good idea to do staking in the first place that it is worthwhile engaging with the web 3 ecosystem. How did you go about finding partners that you can rely on? I mean and and maybe to al also feedback a bit on what has just been said, we came in for the security and we stayed for the yield at the end of the day. And that was that was the formula.

I'm not going to repeat anything, but I obviously recognized myself in everything you said uh just now. We we started initially looking into uh you know from a viability perspective and as an organization that decided early on by design to only look into proof ofstake tokens. We started looking into different staking pools and from that security perspective and um from that um healthy investment outlook on it liquid staking and liquid staking on ETH for us specifically became quite an evidence and I think that was one of the first argument and of course I had to dilute and explain to you know what is largely a web two organization even web one by some aspects um but that that's really how how we got to it and I think that the security component is a reassuring one. Um realistic yields or safe yields uh that might not be crazy and what's behind it. Uh how are people using the chain?

Why are people converging towards the type of tokens that we're interested in? Um were really the the key that you know uh got the project uh got the project going.

How did you go with ETH as opposed to Salana, Cardano, Sue, anything else? How did you land on that? Look, I'll be I'll be honest that there was a lot of uh opportunism there. Uh when we looked into uh a protocol like the Lido protocol that we looked into liquid staking uh you know it was at one point like okay a leap of faith for us and and let's go with it. that it did present us, you know, the Lido protocol and and ETH liquid staking presented us with the guarantees that at the end of the day u from a reputational risk perspective from um um the the looking at what were the prospects and what were uh the numbers that would make it interesting for this organization to spend time and money on a project like that.

but also because we had partners and uh you know that came in and brought the technology and brought the expertise and brought the uh smart contract uh along and that's pretty much also the fact that we didn't have to develop anything inhouse and trust subject matter experts uh was really another key thing and it was a decision from the beginning. I mean, again, I I don't want to make it about non forprofits, but any penny that we invest in the project comes from a donation. So, if we're not 100% sure that that investment is bound to, you know, uh have a decent return, we wouldn't go uh we wouldn't go by it. And of course, when we launched the project, I I kept on having people coming going, "Oh, this is such a great project, but why not Solana?" And uh why not stable coins?

and uh you know uh uh don't you think that you could generate yield like this or you could generate yield like that and the answer was obviously yes I mean we had we had to start somewhere but I think gain gaining trust in uh looking into an organization for whom liquid staking was just you know weird concepts I mean I I was you know people were looking at me weirdly in the beginning until you see actually the generation of rewards uh and the rewards coming into the wallet this is what makes the difference but a project like that and where we're going with that project today in terms of looking into other chains to complement it and looking into um uh yield generating uh protocols for stable coins. We're looking into crypto lending models as well. Um I think the sky the sky is the limit. So I might go back to what you just said. what will drive us is a bit those concept those principles and at the end of the day for us it's what drives the community and that might be a little you know a point that's not into staking stricter sensu but um I think when a lot of people share values uh we're an independent organization we don't take funding from governments we're a bit of the rebels uh in the system in our line of work we speak out when others don't people recognize themselves into it and I got a lot of interest from you know corporates coming to me and saying hey you know what we're trying to develop our ESG policy uh some of them are like look our CSR policy is hollow today uh but this is our core business this is what we do how can we work together staking is a very interesting alternative or a very interesting way forward not only for me but for people coming in with technology with suggestions and obviously ly in our case for now um with ETH uh coming in.

So um I I think for me it's really about the strategy itself, what you base it on and where you're going with it and less maybe about the protocol or you know the actual token that you're going to look into

and and I think also um you the big breakthrough that you had was that there is this community of people that you can't just go put a button here says donate your crypto here. There's a lot of hodlers out there who don't want to get rid of the Ethereum, but they're more than happy to stake and to share some of the rewards with you. That that's a a big kind of philosophical breakthrough that you had.

It it is I mean I call it a change of paradigm for us because that's really what it is cuz from asking people to donate part of their wealth, which is how traditional philanthropy has worked up until now, what we're saying to people is let's co-create. And by co-creating it's not just a veiling part of your wealth that you're developing for us because 3% of zero will always be zero. So you don't lose anything but you also get a say. And again if I go back to the community I think this is what's important is for us to build together. There are things we will never do as an organization by design by expertise what have you.

But then we can go in different directions together. And this is what we're looking into right now. So it it's really about involving people and staking gives you this community component and that participative component that you otherwise don't have if you just ask people um to give you part of their their money. And I might finish with this. Yes, I mean there are still people who are willing to donate part of their wealth.

But uh when we look at the volatility of crypto in general of course uh and when we look at the strategies to basically yes sit on crypto not necessarily pass it on and all that I don't think it's very realistic right it's not very ambitious to say hey why don't you donate you know some of your salana you donate some of your of your bitcoins I think it's much more interesting to say hey what can we do together and this is actually what has convinced people to come and stake for us Yeah, thank you. And Yay, do you have anything to add either on the earlier conversation about yield versus um risk management or just on anything else that we've covered? I think that uh the discussion now is moving from the yield to really production infra it's it's the it's the underwrites to the the you know the the the validation the the way that the way that all the security is now coming over on chain right it's h you see that with RWA you see that with many project that now the infrastructure has to be to to change gears to shift gears and move forward. So um a a very interesting case study for us was like last year after we worked on organi kind of orchestrating all the node runners and bringing them on one access layer to the application uh firelocks reach out to us and say look what you build in this open source uh you spoke about nos and stuff but you know we build at the end of the day open source and we were one of the first contributors so it's really interesting for us this piece of what they call load balancer. load balance is a technical uh term, but it kinds of what everyone here that's using Netflix uh always can turn on Netflix and see the movie that they want, right?

Uh you never got a a message from Netflix, oh please come in 10 minutes or in 30 minutes like doesn't matter where you are in the world, they're using an underlying routing layer which a company called Cloudflare or Alchemi, but at the end of the day it's routing the traffic. So Firebox came to us and say look we really like what you do with securing the access to different chains but maybe you wrap it up as a product

and basically this is what gave them uh in Trump Mimcoin a 100% access 100% uptime during the Solana Mimcoin thing. So you know you see a lot of when you starting to build uh when you when the first concept of yield generating yield came nobody thought there's going to be um you know RWA or different uh use cases that really need this bulletproof infrastructure but it's coming today and you know Fireblocks for example which is the first customer who using this product they serving you know 2 um um uh institutions uh we see that with different exchanges market maker anyone at the end of the day need the access to blockchain and for the people here who knows what's RPC I like to add nobody cares about RPC until it fails this is our uh this is my take on that

and you think staking and tokens and ability to pay people based real time based on performance is the best way to ensure uptime as well

we had you had A beautiful question at the beginning. Do you believe in decentralization or are you an altruist of decentralization? We the way we build lava is because we think decentralization is a good tool to incentivize different people in a permissionless way and to do a service not based on the reputation but get rewards on the actual service they give. If one provider doesn't know how to do marketing, it doesn't m it doesn't mean that it doesn't know how to write the code. It doesn't know how to configure the node that you're going to have 100% uptime in Japan and so forth.

So with um the rewards, you basically making sure that uh you you know you prioritize performance and that's I think it's very important for the next era of crypto adoption.

Thank you. So, um, we only have a few minutes left, so please share any final words and also let the audience know how people can learn more about you, where they should go. Maybe a a quick sort of one-s sentence thing about um what's in it for them, right? Go to Balancer if you want, what

Yeah. Uh, final final thoughts here is uh well, everyone is invited to to visit Balancer. balancer 5. Um, if your project wants to add liquidity on chain, if you're creating a new staking project and that uh project needs to add liquidity or even if you want to find opportunities of uh strategies and pool types and different uh uh opportunities on chain, that's the the place to go. We're in an infrastructure that is being used by different amount of projects.

Um, and yeah, we'd love to to meet or or talk about it. Thank you.

Um, so Galaxy is a company that you might have heard of already. If you want to learn more, it's galaxy.com. gk.io is the website to go to if you're an institution looking for self-custody or tokenization.

Uh for me it's very simple. Stake to the number caref. You go in, you just click on connect your wallet. You connect your wallet. You see how much you choose how much ETH you want to stake.

And then you say how much you want to stake for us. You get your MSF ETH token. You lock it. You generate comma points. You keep your comma points and uh subscribe to our newsletter if you're into newsletters.

uh if not look into our different projects. We have also other projects that aim to really build a community around what we do. And if you're looking for some initiatives that would match your ESG policies, come have a chat. I'm around for me is going quite simple. Um just visit reboost.

com. Um in few words if you'd like to be involved in the staking uh uh business staking yield without any headache in terms of security in terms of custodial non-custodial etc with no physical pressure or or accounting headache um please buy some uh uh the most historical financial rapper uh which are uh listed equity. Thank you.

I will invite everyone to our website lavanet.xyz. Uh I'm here for the next two days. Love to talk to you if you have projects building AI agents uh wallets and any enterprise that uh uh eager to learn more.

Okay. Thank you very much for your time. Appreciate it.

[applause]

Thanks.