Don't Trust, Verify What's At Stake by Ether Capital

started here so my name is Ashley Stanhope I'm the director of communications for ether capital and I am with my colleague uh yeah I'm cheyanna skanderi I'm the CTO at ether Capital so the reason for this presentation we built a really cool tool that helps stakers have more direct insight into their staking operations that we just paid a launched we want to give you guys a demo of but before we get to that we want to know how many of you are staking eat right now okay cool cool um and how are you staking eat are you using uh they can't show how if you're using a staking service providers like figment scale and others show of hands any service providers liquid staking oh some liquid sticking Lido rocket pool either okay cool cool um solo staking nice we got one over there and what about an exchange anybody no exchange okay okay and uh if you're not staking how come why what are you doing now everyone's sticking here so yeah so this this slide is sort of irrelevant um okay so just to give you a bit of context and and set the scene a bit just uh about us so we started out as a public company in 2018. uh we're based in Canada Toronto Canada um this was back when there weren't many direct access points to ethereum so think about like the Ico boom of 2017 uh a group of us got together crypto natives Venture capitalists and traditional Finance execs and our goal was to really create that first direct access point to ethereum through the capital markets um so we went public 2018. we also helped launch the world's first spot Bitcoin and ethereum ETFs I know it's a bit of a sore subject in America because there's only Futures based funds but yeah that was a pretty exciting opportunity for us and uh here's where we are today um so we are one of the largest institutional holders of ether so right now we have about 45 000 eth on our balance sheet that we self-custody and Cheyenne can explain a little bit about how we do that um we're also the first public company in the world to stake a lot of eth and generate yield and right now we're really focused on staking and building out using a portion of our staking rewards to build out quality infrastructure that helps support the the ecosystem so that's kind of where we are today oh yeah and we built a really cool dashboard that we want to show you um but I'm going to hand it over to Cheyenne just to give you a bit of background on some of the pain points we experienced when we started staking and and how our dashboard really helped us overcome certain challenges thanks Ashley um so I joined ethercap a year and a half ago and we as Ashley said we were doing self-custody gnosis Vault notices wall didn't have any interface online anymore we had to like do ipfs and there was like a lot of challenges there and also there were no tools for like under communicating with the Auditors because we have to do quarterly financials and year-end audits to like what this all these means um so we have to go through some fun Parts about updating the hypnosis Vault the nosy safe um yeah there was a transaction with 200 million dollars of eat that was like stressful but it was fun and um we basically went through a lot of like different ways of documenting what these means to match like the auditing requirements a lot of them require like a minimal transaction going out of the wallet to just show the access what it means to have like four out of seven like different numbers um and there was a lot of challenges still till today that if you you if you're Unchained and have a wallet you have real time evaluation of your assets but the public company has a quarterly based transplant financial report so how would you value these and there's a lot of questions there that we had to answer and the other one was just risk risk management and custody because we are self-custing we had to go through how deep you have to go for the risk assessments like is ethereum also at risk is solar flares are risk like you have to go and scope it down and one of the main examples were like for the withdrawal address so one of the challenges we had withdrawala just was using BLS Keys as you may know is 0x00 and you couldn't use any smart contract any addresses that are already like you did all the key Ceremonies for it and we had to do a lot of research and in February 2021 there was this EIP that added the eat one support for withdrawal addresses and that enabled us and any a lot of other institutions to use as you've seen with lighter tooth if they use eth1 address a smart contract and enabled a lot more cool things to do and for us that was the only way we could actually do custody because we are self-custody we do use a BLS key in that sense change the slide yeah so um that was a before sticking like in order to stay basically I went through the whole market research talked to all the providers up back then and we end up working with figment as our second partner um and just figuring out how to stake was all those challenges but then when you staked we realized oh wait how what's happening with our validators are we doing good are we not are we losing money how much are we earning and there were like a lot of limits like one of the things was like we off the bat we had 320 validators and we can chain like um the dashboard only supports on the whale tier 280 validators so we couldn't even use any currency bill dashboards to just see some insights into our validators so we end up like playing around with a bunch of other tools apis and there was no insights into what the value that was doing like there it's early on when rated that Network started to be a thing they're like some of these tools that are being but doing analytics was the main point Main Place so basically the challenge was we didn't know how our values are doing and um and yeah so I over a weekend under some influence I started working on python the python bot to like just get all the information from Beacon chain and put it on slack just like let's see what's happening so that's like the first version actually this is the last message that bought sent before killing it but the first version was just sending this is how much money you have this is the dollar amount this is how much you're earning this to last 24 hours and that was pretty good experience to see some value in there and then we realized there is some demand for it for the market to know what's happening so I created that Twitter bot um and it was interesting to see people reacting to the tweets of this tweet they were talking to this bot and I had to log in and actually answer people from the Bots account but it was pretty cool that people could see the rewards of this company it's like full-on transparency into our financials of the system of our company if like twice a day which was it's kind of rare to see and in order to like understand more I use datadog to just have a way to chart things and like have a CSV export while doing this we realize there is something here that we need like our CFO needed this information for the every quarter audits or quarter financials and we just didn't want the whole Tech Team to be involved with the financials every quarter so we decided to create this Alpha dashboard as an internal tool and the use case was like we want to be customer zero of this dashboard to be able to make it work and it actually worked we did our financial fine um quarterly financials with that there were like a lot of back effort between the tech team and the finance to figure out the requirements the auditing the reporting and you end up being a product by itself so now that's what we're demoing here and this is basically A Better Private launch you can sign up and that's where we are today and um we're gonna demo but if you guys want to like scan this QR you can sign up we would help you like onboard the process of like getting your validators in this is more for um based on experience so far it doesn't add that much value for solo validators like just one validator but if you have more or with working with different providers having different setups you can see every information in one place yeah but we're showing a demo and yeah we'll put this back up on the screen and and happy to take questions after and just show you guys one-on-one if you want to see how the dashboard works okay so this is the the main interface of our dashboard if I there we go the summary page so right away what you do you want to upload your your public keys so just go down to manage validators these are all of our public validator Keys uh so we have yeah just over 1100 and pretty simple if you want to add anything yeah there was like other challenges here like a lot of people like when we were looking at stake dots or other platforms you can't really export the keys because we want to have import CSV and we're like wait a minute no one I can export their CSV so we can really import CSV here or they miss like zero X at first so there's a lot of these small challenges which make the ux really hard but we try to make it much easier they're still like great for improvement and that's why we really would like to get feedback for from all of you yeah this is definitely uh we're in the very infancy of this dashboard very early stages so um that's kind of why we want to get as much user feedback as possible we have a lot of cool ideas for our roadmap but this is sort of the the beginning for us um so right down the on the main page you have the breakdown of the validator rewards so you have consensus and execution layer rewards um so that was actually a really good day for us but we you can actually you can look at this over multiple time periods as well so 90 days 30 Days Seven Days um up in the corner here you have the total staking rewards so again you can go over seven days 31 days 365 days and this supports all types of staking activity so it doesn't matter who you're staking with if it's Lido if you're using a service provider like figment you can just basically upload your keys and you'll have more direct insight into your operations and I think that's something that's very valued among the community especially um transparency is something that's very important risk monitoring tools after witnessing different events that have taken place in the in the crypto space so um and then we also have I can just add something here so some cool things that this is evolving all the time like we created this almost nine months ago and in September we realized that the chart more looks like let me just do this more looks like this and um actually in January it's like where we started staking more and after the marriage we realized oh wait there's Mev there's a transaction fees there's a lot of other things that now we have to figure out where to get the information how to add them and we end up adding basically bundling all the Mev and transactions into one uh we're looking for feedback but early figure out feedback was like people got more confused because it's usually either Mev or transaction fees you don't get both at the same time because it's basically category does the same thing but if anyone's in the crowd or watching the live stream is interested to see this that separation please give us a feedback and we can add that um it's kind of missing here I really wish that September was there because it was a cool blue line and then suddenly adding like the transaction fees um yeah financial performance now um so another thing being public we we have to meet certain institutional auditing requirements these Financial reports really saved us a lot of time uh and effort and it basically Aggregates all of the financial information related to your staking operations and breaks it down into multiple periods so it's been it's been really helpful um also this is great for for tax purposes as well it's IFRS compliant easily breaks down all of your consensus execution rewards and you can export it into a CSV file as well yeah so this is one of the views I worked a lot with our CFO and what is needed and um so there is like the breakdowns of the um basically the days how they're doing and one of the main points that we were trying to understand was how do you do earnings and like other other things that for Aztec I don't still understand a lot of them but it's like at the finance you need the information and one of the issues where like the separation of these because so far the consensus rewards are illiquid at executions are liquid so they have a different way of doing counting and another one was the closing price which is interesting as a closing price should be 4 P.M eastern time if you're in North America but on the settings we have like different closing times where you should get the price feed and so there's a lot of ways of doing the commission and others but we end up with this view which this view is satisfies all the finance needs but also if you have more details you want to do if you want to see like who's your provider the commission rates and other things you can add them here you can sort things around like it's a pretty full-on grid that you can customize this view worked perfectly for the quarterly reports but we have some other views but also as I said like if you have a specific need then please um let us know and other views that we're working on so yeah this one really helped the revenue and yield analysis with um just projections and like what is about to come and how let's say how the marriage impact had an impact on the yield or some other things it's more on the for the finance teams but it helped a lot on just not like Tech Team didn't have to like be involved in that process all the time that was really valuable for us and if you go down and they're like are there grades on like showing the units how much was earned and and other issues like for the accounting depending on the price of the end of the quarter and the closing price of the day either you lost some or you gained some because like it's basically you're buying it every day it's as an accounting sense um which is interesting and uh yeah now we'll show you the technical performance just something that's been you know some when you eating provider generally you don't have um always have access to this granular of information so this has been this has been great we're able to see any sort of missed attestations if we've had missed sinks uh over multiple periods of time so that's that's coming come in handy for sure we can also see if there's been any slashing events if any validators go offline um anything you want to add yeah sure um so this was one of the first views that we created for this dashboard because it was made by two Engineers we're like technical is more interesting and it kind of stayed there because we didn't get that much outside feedback to know what is important but like based on knowing um the protocol so we know particle participation sync is nothing to be alarmed about missed attestations and um missing are the things you need to look at but at the same time um it happens it's Portugal it doesn't have a hundred percent uptime and like attestation right so it happens it's good to see like one of the things we realized early on when we were looking at this there was a gradual rise in the missed attestations and that's where we repaying figment team we're like hey guys we're seeing this thing with our data like is there is everything okay like everything going well and they check their nodes and I find some of the updates sort of failing so the nodes were not updating to the latest version and and they fixed that since but it was interesting that the first view of this dashboard made us see more see more insights into the platform into the operation than the figment and or the stacking provider and um and yeah like this helps with like the technical team to understand if they're everything's updated everything there but there is a lot more views we're planning to add here we're just waiting for see if there the need is there like for now the finance needs are has been more prioritized because we got more feedback on them but here I see a lot more on the network performance or like implementing rated Network API here or some other platforms that we we played around with like they're doing analytics sometimes I think some of the one of the things that we talked about to implementing is uh like how how can you Benchmark your your validator performance against the network um so that's something that we're looking into making it uh the incorporating the ability to track multiple staking operations across multiple different service providers or different ways you can stake um and yet just find ways to enable diversification as well so that's something that we're all looking into yeah and I want to add just something if you click on account profile so one of the things is like so we're working with the global basic audience we implemented the four main currencies you can just switch them like let's say if I switch to Euros update hopefully it's not going to break on the demo time but uh you go to staking reports and if all the numbers should be yeah all the numbers are in Euros actually yeah it's in Euros the sign is different but you can see them in Europe but like the other things we want to add are like things about let's say the base currency is already there API keys if you want Twitter slack telegram exchanges apis other things um or another part is like accounting standards we currently use IFRS right um but like there's Gap there's other ones if you want to use or Price Source we're using coin gecko at this point but there's like other ways of doing like coinbase or other resources and time zone is important for the closing price if in based in Europe you need to change that and um I think that's the main demo yeah that's pretty much um just if anyone has any questions okay it should be on I think yep it's on yeah sorry I'm just a finance guy not well kind of a tech guy but mostly Finance guys so it's just to the fact that you're a public company so your accounting firm you've got an accounting firm that has a sign off on your books can I just ask how long the accounting firm has been with you guys and they're able to get the book signed off because there's been a few public crypto companies especially up in Canada that haven't had good accountants uh but the Bitcoin miners mostly but uh so how's it going and getting your book signed off especially for the annual for uh 2022. uh so I feel like this is more question that our CFO can answer properly with this but I can shed some light on some of these some of the parts I know so we have we don't have extra accounting firm we worked with KPMG account on ey Canada on the auditing on the end the year end and this has worked great on just showing them the platform because before you had to go through Beacon chain and download all the data and have a CSV and there was no on right live data um it helped a lot there's signaling through a lot of like all these processes our access control like the data source where the data is coming from our goal is to be able to like have this that the accountants and anyone that doesn't know what staking is even just be able to like work with this and get the financials like signed off uh we're close to that but we still need a lot of back and forth but uh for sure we can get your contact and get our CFO to get more of the information cool any other questions coming over hi yeah can you speak on like where are you pulling the data from whenever like somebody connects to the to the service do you have like your own validator or like how does it work sure so we have some r d on our in-house data source which for now it's mostly relying on etherscan and Beacon chain API um and some other like rated.

network on some of the validations but we we're running our own nodes we haven't studied that we can chain is also open source uh we we're doing r d on like what are the data sources we can use ideally we need two data source to Independent data source to like validate everything um it's kind of in the making but yeah uh some other questions foreign I think that's it oh we got one hey thanks for that um you've mentioned about uh staking yourself that kind of thing is there any ideas to get a rocket pool implemented back I know they give like extra rewards in the term in terms of RPL and that kind of thing you mean as ether capitals like outside the dashboard or I didn't get the question I can answer that one um so liquid staking is something that we're you know definitely interested in right now we have to kind of meet certain requirements being a public company so there's no plans to go into that area at this time but definitely something we're looking into and doing some r d on for sure yeah and for the dashboard itself there is so as long as you have a public key you can get all the information but with rocketpool and Lido you get the portion of a public key which gets harder to on all of those um some of the parts it gets harder on the risk assessments like I'm really interested in the SSV and DVT and um those but then it's hard like you you want to go through the audit we still got to the point that key management harder wallets how everything's done but then separating them and BLS Keys it's it's quite solved the whole challenge yeah we can't move we can't move fast and break things like typical crypto companies can but I wish definitely something that we're looking into for sure any other questions all right cool um well we're gonna hang out for a bit uh if you want to come up play around with the dashboard upload some keys we're happy to show you it and then we also have swag as well if you want to grab a t-shirt or some stickers yeah they're on the left side somehow that table that somewhere there is there yeah thanks so much for coming [Music] thank you