LEGO: Integration Lido <> Stakeall Finance

[Sarvesh]

Stakeall Finance is a fully decentralised non custodial DeFi platform focused on building DeFi strategies. DeFi strategies are basically series of DeFi actions wrapped in a single transaction. These innovative DeFi strategies opens a new gateway for users to participate in DeFi with better returns and minimal opportunity cost

Where are we currently?

We have launched beta version on Ethereum Mainnet with below mentioned strategies.

Leverage Staking: This strategy allows user to use funds as collateral to borrow from lending protocols, swap them at best exchange rate in desired token and stake it to POS protocols in a single transaction. Platform enables user to compare interest rates and swap amount across various assets.

Read more about this strategy here in below blog:

https://blog.stakeall.finance/introducing-stakeall-finance-1e063b71ee98

Platform currently supports staking of MATIC and GRT. We are working on building ETH staking strategy with Lido.

Lido ETH staking strategies with Stakeall Finance

1. Leverage staking of ETH: This strategy allows users to borrow ETH from Aave by collateralising any other asset like WBTC. Borrow ETH will be staked to Lido protocol and received stETH will be added to liquidity pools like Balancer, Curve or Yearn vaults.

Whole strategy will be executed in a single transaction. This will greatly increase user-experience of staking to Lido.

Below diagram demonstrate the Leverage staking of ETH using Lido Protocol.

Similar kind of strategies will be implemented:

1. Leverage staking of ETH + Add liquidity to curve
2. Leverage staking of ETH + Yearn Vault

2.Swap and Stake Strategy:

This strategy enhances the user experience by allowing user to buy ETH for staking.
Users can use any token to buy ETH from decentralised exchanges and stake it to Lido in one go.

3. Research and Experiment on cross chain staking: Lastly with this grant we would want to research cross chain staking of ETH. This will allow users with ETH on side chains like Polygon, Fantom, Avalanche etc to participate in Lido staking. Idea is to basically bridge back ETH from L1/L2/side chains using crosschain bridges like Connext, hop.exchange etc. Extended part of this research would also include evaluating leveraging(borrowing) part to L2 chain like Matic and Avalanche and move ETH using bridge for staking in Lido.

Proposal
A grant of $35,000 is being requested from the Lido Ecosystem Grant Organization for the development, testing, auditing and deployment work for building ETH staking strategies using Lido.

[PatrickOD]

I think that this is a good initiative for Lido to support. It has the potential to draw additional assets into the Lido Ethereum staking protocol, and also add liquidity on some of the key DEXs offering stETH pair pools.
I also like the idea of encouraging research into cross-chain staking. This part is more vague but in general I do think it is research that would benefit Lido.

Lastly to support this proposal with the requested LEGO grant, it would make sense to further discuss the roadmap for stETH yield strategies prior to deployment. But that’s not an objection to anything in particular in the proposal.

[jbeezy]

@Sarvesh am I correct that to unwind the process Stakeall would use those same AMMs to repay the loan with ETH? I believe Ribbon does something similar behind the scenes.

Agree that the research section is both the most interesting and also the most vague. Being able to capture new ETH on other EVMs would be very powerful for Lido. A shuttle system could be used to run in batches every so often to optimize the gas costs on main net. Possibly by implementing a ‘bonding’ period with the Stackall service.

I support the grant as the cross chain component is very relevant to some discussions about this problem however I would like to see some more clarity on deliverables and timelines.

Some members of LEGO are still on holiday so internal discussions might be delayed bit with additional responses.

[Sarvesh]

Thanks for the feedback @PatrickOD and @jbeezy. Unfortunately can’t edit the original post to add more details on the research section, so adding it below.

1. Here are our initial thoughts on L2/side chain research:

There will be staking pool on l2 chains where users can stake their WETH, which will be moved to mainnet for staking on timely basis. Equivalent amount of stETH will be moved back to L2 pool for users to claim.

Below will be objectives of the research:

1. Analyse and design the pool contract on L2/side chain which should allow users to stake wETH and claim stETH once batch is processed.

2. Analyse different cross chain bridges which can be used to move token across chains. Factors to consider liquidity, fee, time taken, security, trustless etc.

3. Design a sibling pool contract on mainnet which can interact with Lido protocol for staking and unstaking.

4. Finalise on economics that should minimally cover transaction and bridge fee.

2. Unwind Process

@Sarvesh am I correct that to unwind the process Stakeall would use those same AMMs to repay the loan with ETH? I believe Ribbon does something similar behind the scenes.

Yes, the unwind will happen via stakeall platform. We have Aave dashboard where users can manage their position like paying back the loan amount, maintain their health factors etc. In the first version of the strategy, user would need to do two transaction during unwind i,e redeem ETH from Lido and followed by paying back to Aave using stakeall platform. This unwind process will be converted into single transaction in future version.

3. Timelines:

1. Staking Strategies: 6 weeks
2. Research and Experiment on cross chain staking: 4 weeks

[kadmil]

Hey-hey! Thank you for the proposal! Unfortunatelly, I’d say that cross-chain staking is 1) something we really want to focus on in-house; 2) seems to be a thing one can’t really pull off without major and deep protocol tweaks. Sorry to say, but because of this that’s not a proposal we would be going forward with.