Codefi Staking is a validator operator service for institutions seeking to stake on Ethereum. We enable financial institutions, cryptocurrency exchanges, funds, custodians, and family offices to capitalize on the revenue opportunity of Ethereum without the technical and operational complexities of running an independent validator.
Codefi Staking was created by ConsenSys, the software engineering leader at the forefront of Ethereum blockchain development.
With Codefi Staking, institutions can significantly reduce technical risks, increase rewards generation, leverage best-in-class validator key and transaction security, and enjoy easy and efficient validator management.
To get started, a customer must sign an agreement that outlines the terms and conditions. They can then use either the API or the UI to begin staking. With both approaches, the customer must supply the withdrawal public key they want associated with the validators they stake. We offer direct integration with Ledger’s Nano-X BLS implementation.
Once the customer chooses their withdrawal key, they must decide how much to stake. The platform requires this number to be divisible by 32. As of launch, we are integrated with Metamask and Ledger for signing the Eth1 transaction. Codefi Staking allocates and then returns the required payload(s) required to the customer’s Eth1 wallet, triggering those transactions for them to sign and submit.
We are non-custodial and never have control of either the customer’s private withdrawal keys or their ETH. The platform itself was co-created with Microsoft and leverages all the built-in security facilities of Azure. All data is encrypted at rest and in transit. To access the platform all customers and users need to have been set up and enabled 2-Factor Authentication.
The signer infrastructure is segregated from the rest of the platform with minimal access. Validator keys are generated directly into the Azure Key Vault via a multi-party, deterministic process in case of catastrophic loss.
Rewards are paid, by the protocol, directly into validator accounts. After the Merge, transaction priority fees will also be paid to the customers’ accounts whose validator proposed the block. The details of this mechanism will be developed over the coming months.
The protocol only takes into account 32 ETH when determining the amount to be awarded. This is called the ‘effective balance’. It is therefore a more efficient use of Eth to stake multiple validators which will increase the number of duties fulfilled to the protocol and the consequent rewards.
A slashing penalty will be immediately applied to the balance in the validator. The validator will be automatically exited after 36 days. During that period, if the protocol determines that the validator was colluding with others then further penalties will be applied.
Once exited, the validator account will no longer participate in protocol duties and the account ETH balance will be fixed. Once withdrawals are enabled, the ETH balance can be transferred either to a new active validator or to the withdrawal key holder’s wallet. Should a slashing event occur, Codefi Staking will provide a full incident report.
It is worth noting that our track record since December 1, 2020 shows zero slashing and an up-time of over 99.95%.
Our standard offering does not provide insurance. It is worth noting that our track record since December 1, 2020 shows zero slashing and an up-time of over 99.95%.
We charge a percentage of rewards (from 5% to 8%) based on the total ETH staked. The exact figures are agreed with the customer on understanding their staking intentions.
There are a number of risks when staking ETH:
- Protocol / Technical: The Beacon Chain is only one year old but has proven, as a protocol, remarkably resilient. The next big change coming is the Merge in 2022 and this will be another quantum leap with some inherent risks.
- New Key-Types: The keys used on the Beacon Chain and across Eth2 follow the BLS12-381 curve rather than the ones used previously on Ethereum mainnet.
- Slashing: Mismanaged validators can incur slashing penalties. These are especially punishing since, until withdrawals are enabled, the remaining ETH in a slashed validator account cannot be accessed.
- Access / Eth Roadmap: As of launch, no withdrawals are possible. Customers staking their ETH are waiting for withdrawals to be implemented after the Merge.
With Codefi Staking, only the customer has control over their funds since they hold the private withdrawal key. Codefi Staking does generate and control the validator key specifically to respond to validator duty requests from the protocol.
Codefi Staking offers a distinct set of differentiators:
- Each customer’s ETH is always segregated from others and they have full transparency on the validators allocated to them
- The full protocol-level rewards are paid to the customer
- The customer holds their withdrawal keys
- We are architected to minimize slashing risks
- We are integrated with Metamask, Metamask Institutional, and Ledger
- As a ConsenSys company, we work closely with the teams that built Infura, Teku, and the Eth2 Deposit Portal. We leverage our industry expertise to offer the best institutional staking service on the market.
We enable you to participate in Ethereum’s new Proof of Stake consensus layer and earn rewards for doing so, in ETH. Codefi Staking is deliberately focused on providing this service to institutional customers.
Codefi Staking launched on December 1, 2020 and is available now.
Custody accounts are available for use via MetaMask Institutional, and we also offer Wallet Connect as a standard for wallet / custody integration.
Customers will have access to a reporting tab in the web application. For more flexibility, API users have access to a GraphQL endpoint from which customers can craft their own reports based on the full set of data from their validators and the beacon chain.