Liquid Staking - Ethereum

Liquid staking on Ethereum with Tranchess

What is liquid staking?

Liquid staking function allows users to earn staking rewards without locking assets, self-maintaining staking infrastructures or meeting the minimum staking requirements which can be high for retail users. Users can deposit tokens and receive tradable liquid tokens in return. The smart contract stakes these tokens using elected staking providers, and distributes the staking rewards back to users in the form of tradable liquid tokens or an increase of fair value of the liquid tokens.

What is qETH?

qETH is the liquid token of Tranchess liquid staking. After users stake their ETH with Tranchess, they receive qETH as the liquid token. The amount of qETH is constant unless users stake/unstake more ETH. The staking rewards will be accumulated as fair value of qETH and eventually reflected as an changed amount of ETH when users swap their qETH to ETH.

In addition to collecting the Beacon Chain staking rewards, users can also provide liquidity in the Tranchess qETH/ETH pool on Balancer, where LP providers receive CHESS rewards and veBAL incentives.

qETH can also be used in the greater Ethereum ecosystem for different DeFi protocol collaborations. Tranchess would soon release more joint-collaboration features in the coming weeks. Stay tuned!

Do I receive CHESS as a liquidity provider for the qETH/ETH pool?

The qETH/ETH pool will be allocated with a certain amount of CHESS emission on a weekly basis, the specific percentage depends on weekly governance voting on Tranchess. The allocated CHESS would NOT be distributed directly to LP holders, instead, in order to maximize LP holders' benefit, the allocated CHESS will act as incentives for auraBAL holders and join the weekly bribing mechanism on Hiddenhand. Bribing with CHESS incentivizes auraBAL holders and gains a higher BAL allocation to the qETH/ETH pool, which will be distirbuted to all liquidity providers of the pool.

Is there a minimum amount of ETH required for liquid staking?

There is no minimum amount of ETH required to stake with Tranchess. However, given it's an on-chain transaction, we would advise our users to check the relevant transaction fee to make sure it can be covered by the staking rewards.

How can I convert my qETH back to ETH?

After clicking Unstake ETH, you will see two ways to convert qETH back to ETH:

1. Withdraw. Withdrawing from the validator staking node might take a few days depending on the waiting time of the exit queue on the Beacon chain and the demand of staking and unstaking qETH amount. A detailed explanation can be found here in this medium article.

2. Swap their qETH back to ETH on the Balancer liquidity pool, where users will be redirected to Balancer to complete the swap.

Why is there congestion on the Ethereum network to activate new validators?

After the successful Shanghai Upgrade, the Ethereum chain is currently experiencing another round of high demand for ETH staking, with new validator nodes created every day. The Ethereum chain produces 225 epochs every 24 hours, and each epoch processes a limited amount of new validators, depending on various factors such as the status of the chain, the total number of pending validators, and so on. Currently, each Epoch processes around 8~9 validators, and there are over 90k pending validators waiting in the queue at the moment; Not including the validators that are newly created as you are reading this, resulting in an extended waiting time of over 40 days for new validators to be activated.

Most of the figures above represent only the current situation and are subject to change in the future.

Can I self-stake my ETH without using any liquid staking protocols?

You certainly can. However, staking on Beacon chain requires technical expertise, complex and expensive infrastructures and regular maintenance. Fail to meet the above requirements could result in slashing penalties, offseting the staking rewards one collects. Additionally, it requires a minimum of 32 ETH deposit to run a self-staking node, which would be locked on Beacon chain and cannot be withdrawed until further ugrades take place on Ethereum, which might take indefinite time.

Staking with Tranchess effectively avoids the above hassle. Users can stake any amount of ETH they prefer and receive the staking rewards without worrying about the lock-up period of Beacon chain or setting up the complex technical node operation.

Is there any fees associated with liquid staking on Tranchess?

There's a 10% fee on users staking rewards which is split among node operators, Tranchess treasury and weekly rebate for veCHESS holders.