It’s no secret that institutional interest in staking is on the rise and one could argue that Ethereum’s recent move to Proof-of-Stake was a major boost in this regard. Due to the highly technical nature of running validator operations, institutions generally partner with staking providers like Chorus One to manage their node infrastructure. This is a crucial step as the node operator is not only expected to have protocol-specific failover strategies and all regulatory compliances but also be well versed with on-chain matters.
New staking entrants are often left with the question of what factors to prioritize when partnering with a node operator. Security, commissions, compliance or all of them?
To simplify these matters, we’ve made a list of 10 factors that any fund manager or institutional investor should consider when speaking with a staking provider. These are by no means exhaustive but are some of the most common questions we face when speaking to any institution. Ultimately your choice of a staking partner should encompass POVs from your colleagues in the legal, security, and finance teams too.
The staking provider’s fees should be based on the protocol rewards earned and not on your total staked value. Consider the two scenarios listed out below:
If the staking provider’s fee is based on the total value of your staked assets, there’s a high chance that you’ll end up paying a higher fee. The fee percentage might seem lower when compared to other providers but as they say, the devil is in the details.
“Picking the right staking provider will have a big impact on fund yields. Fund Managers need to weigh rewards and many other factors like counterparty risk and MEV policies,” says Neal Roche, Chorus One’s Business Development Manager working with institutional clients.
You ideally want your staking provider to have equal skin in the game too and charging a fee on the protocol rewards rather than value of staked assets is one way to do that. Needless to say, Chorus One always follows this rule.
MEV stands for Maximal Extractable Value and refers to the additional rewards a validator can make by reordering, adding, or removing transactions from a block. In the last 12 months, MEV has been extensively discussed and various protocols like Skip and Jito exist today that are fully focusing on this subject. A validator participating in MEV can boost their share of rewards that are indirectly also transferred to their delegators. For an institution looking to stake, it’s a no-brainer to partner with a staking provider that runs relays like MEV-Boost to earn additional rewards.
At Chorus One, our team is fully invested in the MEV space and wants to create as much transparency around this subject as possible. Our Research Team has written extensively about MEV on our blog and we’ve even released a MEV bot on Twitter that delivers MEV extraction updates from Osmosis every day. You can also check out our Ethereum MEV dashboard and Solana MEV dashboard on Dune Analytics.
Fund managers usually like to diversify their assets into a couple of networks and hence like to work with multi-chain providers. Owing to the fast-paced nature of this industry, staking providers that onboard newer networks quickly are preferred. Major node operators like Chorus One work with over 30 PoS networks including all major Cosmos chains, Solana, Avalanche, NEAR, Tezos, etc. and are also involved with the testnet/incentivized testnets for multiple networks at the same time.
Another key piece of the stack that will influence your time-to-deploy-funds. The last thing you want when you want to stake more or withdraw your assets is needing human intervention on the other side of the operation. You shouldn’t need to delay your transactions, because your staking provider is on leave. This is why it’s wise to evaluate if you can automate your staking procedure through an API.
This is exactly what OPUS is. You have FULL control over your validators and can increase allocation/withdraw assets whenever and wherever you wish. Your stake stays backed by Chorus One’s secure infrastructure with 24/7 supervision from our team.
This is arguably the most critical factor and one that separates the crypto natives from the hobbyists. Staking is non-custodial but if the node operator’s security practices are not up to the mark, your assets are at risk.
Governance is both a power and a responsibility. The power to shape a network’s future and the responsibility of an educated vote. Deploying capital in different networks also means looking into proposals, analyzing them and casting votes. Ideally, your validator should be actively voting on these proposals as some of these could involve things like incentive updates and inflation reduction which impact you directly.
Chorus One works with 30+ networks and we take on-chain governance very seriously. Our Research Team looks into every proposal, discusses it rigorously, and then votes for them. We even release the rationale behind votes on our social media channels every week.
An equally important aspect is the protection a staking provider offers against being slashed and other similar penalities. Penalties differ from one protocol to another, but in essence stakers can lose rewards or, in the worst case, stake if the staking provider is slashed. Chorus One AG is a privately owned Swiss company with a strong balance sheet and over four years of staking experience with institutional clients. With over $750 million in AUM, we offer a standard SLA of 99% uptime and a “no slashing” guarantee to our clients. We have never had a node slashed and even offer Ethereum node slashing insurance as an option to our clients.
Validators with an in-house Research Team closely study almost all the networks and hence they’re also the first ones to spot the high-potential ones among the array of new networks launching everyday. Since they will be the ones maintaining the infrastructure, they’re also some of the most knowledgeable teams a network could speak to. A few months back, we announced Chorus Ventures, a $30M initiative to invest in some of the most interesting PoS and interoperability networks, and middleware protocols. To date, we have made over 30 investments including Celestia, Quicksilver, Osmosis, Agoric, Uqbar, Lido, Anoma among many others. We continue advising and investing in projects with a crystal-clear focus and a passionate team. Our exclusive research is also shared with our clients to help them shape their investment strategies better.
So there you have it. The ten most important points that should be on your mind when partnering with a staking provider. What other points would you mention here?
The easiest way to stake your $Hash to a validator is by using the Provenance Blockchain Explorer.
If you have a Provenance Blockchain or Figure Wallet, navigate to the Provenance Blockchain Explorer and click the "Connect Wallet" key in the upper right-hand corner and select your wallet type:
Once your wallet is connected, the Explorer will show the wallet address is in use and the Key will change to a User profile icon:
With your wallet connected, click the Staking menu option to display the list of Validators:
The Validator list shows the Validators that are available to Delegate to. Clicking the Moniker or Address column for the Validator will show details about the Validator. These details are important when considering a Validator as they demonstrate the Validator's shares, commissions, and delegators:
From the Validator List, click the Delegate button next to the Validator you wish to stake with:
Explorer will display important information about the selected Validator and provide an input to enter the amount of Hash you wish to delegate:
Once the Delegate button is clicked, Explorer will prompt you to sign the transaction with your wallet. Once signed and submitted, the delegation will show in the Provenance Blockchain Validators List:
How to Manage Your Delegations from Explorer
Once you have delegated Hash to a Validator you can undelegate or redelegate your Hash. When you undelegate, your Hash will not be available for 21 days. You can redelegate to a different Validator at any time.
From the Staking menu the My Validators list shows the Validators you have delegated to. Click the Manage button to adjust your delegations:
Your rewards for a given validator are immediately claimed when you change your delegation against it, which is reflected in the transaction log.
To get started with everything, you will want to go to https://wallet.near.org/. If you have already created an account and you don’t want to connect a new Account to that existing one, then you can open up an incognito browser. If it’s your first time it will bring you to this page below:
Assuming you are planning on creating an account, you will want to select the blue box on the left — Create Account. The screen below is what will pop up:
This is where you have the opportunity to create a NEAR Account. You pick your account name and then click Create Account
You cannot change your account name once you have claimed (although you can buy and sell it).
In the next step, you need to choose your security method. Note: This can be changed after the account is created, but you should still select the one that is going to be most secure (i.e. use a Recovery Phrase or a Ledger Nano S or X).
After you click Continue you are shown the passphrase. It should be 12 words long.
Store the mnemonic (passphrase) very securely. Anyone with the phrase can access your account and transact!
To make sure you have got the seed phrase correctly recorded, you will be prompted to input one of the words at random.
After you do that, you will be brought to the Account Verify screen. You will need to either fund it or use an email/sms to verify your account.
If you use email you will be taken to the next screen to enter the 6-digit verification code.
Here is where things can get a little tricky. NEAR is built around an Account model, where users have human-readable ID’s. In order to get that ID though, you need to fund your account with 0.1 NEAR.
So here is how you get the ID you selected earlier on in the process:
Once you receive the near you will see an Account Funded screen. Congratulations your account is funded and that account ID is yours forever (or until you decide to sell it)!
Now that your account is funded you click Continue to Account to get onto the wallet home interface.
Once you are on the home interface there are different options available on the top left of the bar. On the right column, you can see your different security permissions. You can enable Email and Phone access on top of your seed phrase for quicker access.
You can also Enable 2 Factor Authentication from your email. In general, 2FA is highly recommended, as it means that even if your account is compromised, no action can be taken without first confirming that action with a special code sent to your email.
You might want to connect other existing NEAR Accounts you have set up to the wallet interface. This will allow you to navigate quickly between accounts. On the top right corner, you can either click import or create new account
If you want to Import an existing account you just have to click the recover seed phrase box and input that account’s seed phrase.
You are now set up with your NEAR Account and ready to stake.
From the moment your account has been funded the sole method of receiving and sending NEAR and any token from the wallet is via your newly created Account ID. DO NOT ever use the one-time funding address again.
This next part will go into the details on how to stake and unstake from the NEAR wallet. Go to the Staking tab on the top left of the screen. Click on it and you will get a screen as displayed below.
This is the first step in staking. You will want to click the blue button Stake My Tokens. Once you do that, you will be prompted to Select a Validator from the list of NEAR Validators.
Select chorusone.poolv1.near and click Stak with Validator. Then you are asked to input the amount that you would like to stake. If you want to stake everything in your wallet click Use Max’ Note as explained in the photo below, there is always 0.35 NEAR reserved for Fees.
Select the amount you would like to Stake:
Once you have entered an amount, you must then confirm your stake as depicted in the picture below. All you have to do is click ‘Confirm’.
You will see the following screen upon successful staking!
Congratulations you are now staking on NEAR Protocol! You can check in on updates and rewards from the Staking tab of the wallet.
Your account will start earning rewards upon staking and after some time you will be able to withdraw them. Your earned rewards are automatically restaked. If you want to unstake you have to select the ‘Unstake’ on the right hand side.
This will then prompt you to select which validator you would like to unstake from. Unless you are staking through multiple different validators there should only be one option.
The following screen will then prompt you to input the amount of NEAR you wish to unstake. You can then choose to either unstake just your earned rewards or more if you like.
Finally, confirm that you are ready to unstake that amount of NEAR that you entered.
The tokens become available on the 4th epoch after release which is usually between 52–65 hours in time.
After hitting confirm you will then get the Success message. Shortly after, the staking tab of your wallet, will reflect your tokens pending release and eventually they will become available for you to withdraw. Once they are available to withdraw you can simply select Withdraw to have them deposited back into your wallet.
NEAR Wallet can also be used to connect to existing dapps on NEAR. Just head over to a NEAR Dapp. You can check out the different dApps at Awesome NEAR. Look for the ‘Sign in with NEAR Wallet Option’. Give that a click.
It will then take you to this screen in your wallet. Note that if you have multiple accounts connected through the wallet you can decide which account you would like to allow the Dapp to access.
Once you click Allow you are good to go, and your Account will be automatically connected to the dapp going forward
Make sure to review the Dapps before allowing them access to your account. Malicious apps may try to steal your funds!
“Sometimes a bull market, sometimes a bear market, always a builder’s market” — Sahil Lavingia
Chorus One was incorporated in 2018 when Proof-of-Stake was still in its nascency. But as all of us have seen, it’s now proven to be more secure, decentralized, and energy-efficient than Proof-of-Work. The maturity and adoption of PoS brought in increasing institutional interest as the low-risk profile of staking acted as a conducive entry point for many institutions who were testing the crypto waters. We covered more on this topic in an article some weeks back. Chorus One has been helping institutions get PoS exposure through our white-label and research services and today we’re extremely excited to announce the launch of OPUS — a multi-chain staking solution that will significantly speed up and scale an institution’s staking operations. The needs of any institution vary quite a bit and there aren’t many enterprise-ready staking solutions catering to them all. OPUS was designed after months of research and conversations with our existing clients and other crypto-friendly companies, keeping their needs at the center.
“Cryptoassets are becoming an integral part of the world’s financial system. They open the possibility for a more efficient and innovative economy. Staking cryptoassets allows participating in this revolution and earning strong returns with minimal risks. At Chorus One, we are grateful to be able to support institutions of all kinds to safely and effectively participate in the Proof-of-Stake economy.” — Brian Crain, Co-Founder and CEO, Chorus One
OPUS also follows industry-leading security standards and access to MEV rewards, the latter now being an important factor post the Merge. Here’s a quick overview of OPUS’ primary features -
Security is of paramount importance and one that’s non-negotiable. Hence, OPUS follows a range of security practices like authorizations/authentications using Open ID Connect (OIDC), double signing protection to prevent losses, and all private keys being stored in FIPS 140–2 compliant vaults. OPUS is also non-custodial meaning customers remain the sole possessors of withdrawal keys.
Every client would have a dedicated infrastructure with multi-region redundancy that would also allow them to increase or decrease validators as and when required, depending on the protocol. This is also supervised round-the-clock by our DevOps team for issues and real-time updates can be enabled on Telegram or Slack.
OPUS is designed to be chain-agnostic. Starting first with Ethereum, this will soon expand to other networks so you can use the same interface to interact with multiple networks.
MEV-Boost queries and outsources block-building to a network of block builders. The validators that run MEV-Boost on their nodes will earn maximum rewards that then increase the rewards of all OPUS users too. Since the rewards generated by the non-MEV-Boost validators would be substantially lower, it would be prudent for institutions to partner with solutions that already enable MEV rewards.
That’s not all. We have many exciting features in the pipeline that will be rolled out in the next few weeks. If you’re interested in exploring OPUS and knowing more, drop an email to staking@chorus.one
