Climate change is not a new phenomenon and no country is spared from its pangs. Governments & institutions have been slow in tackling it and the results are for everyone to see. The devastating hurricanes in the Atlantic, the extended droughts in the West, and the horrific floods in South Asia are all examples of the increased intensity of natural disasters due to climate change. Though there has been a gamut of initiatives that have promised to fight climate change, one of the most promising ways has been the use of carbon credits.
Carbon credits are a type of environmental commodity or certificate that companies and individuals can trade that represent carbon dioxide that’s kept out of the atmosphere by some act of conservation like reforestation. By putting a price on carbon emissions, carbon credits can help to internalize the costs of climate change and encourage businesses and individuals to find ways to reduce their emissions. Additionally, carbon credits can be traded on a market, which allows for the flexibility to find the lowest-cost emissions reductions and to reward those who are able to achieve the largest reductions. But the carbon credit market has long suffered from issues like lack of transparency, double counting, and/or creative accounting.
Tokenizing these carbon credits on the blockchain is obviously a better solution since the credits can’t be sold/traded once they’re retired, the data is publicly verifiable, and immutable too. That’s why Chorus One collaborated with Regen Network, a platform that originates digital carbon assets unlocking regenerative finance in the world of web3 to offset our carbon footprint for the years 2021 and 2020. We run and operate nodes for Proof-of-Stake networks that are extremely energy-efficient compared to, say, Bitcoin, but that’s not the end of it. We calculated our approximate CO2 emissions for the last 2 years by estimating our team’s device usage, travel to company retreats and conferences, emissions by the data centers we utilize, etc.
This also contributes to the Cosmos ZERO Carbon Campaign, an Interchain Foundation initiative for the entire Cosmos ecosystem to achieve net-zero carbon emissions for their network validator node infrastructure and operations.
CosmosZERO is the first all-ecosystem governance process, and not only keeps Cosmos at the cutting edge of competitive advantage with protocol governance leading the way across the ecosystem to offset our carbon but also is helping usher into the IBC ecosystem the new asset class of interchain carbon credits, which many believe will be uncorrelated with the crypto cycles —
Gregory Landua, Co-founder, Regen Network
We arrived at a total of 130 tons and used the Regen Marketplace to retire an equivalent amount of CO2 via The Mai Ndombe REDD+ Project and The Kasigau Corridor REDD Project. Regen Marketplace was recently launched and allows individuals and institutions to buy, sell, and retire on-chain ecological assets in a few clicks. You can view Chorus One’s portfolio of retired eco credits here.
We hope to encourage more organizations to retire their carbon offsets on-chain. At the end of the day, we have to remember that this planet is the only one we have and we have to do our part to protect it.
We are excited to announce that we have onboarded XPLA network as validators. XPLA (“Explore and Play”) is a proof-of-stake, Cosmos-based, gaming-specific L1 developed by Metamagnet in collaboration with its primary partner, the Com2uS Group, one of Korea’s leading public gaming companies. C2X, a blockchain gaming platform, was also created by Metamagnet. While C2X will remain as a gaming platform, XPLA intends to be a gaming mainnet that serves as a center for any third-party studio to make games and create media content. Game developers can quickly transition their Web2 creations to Web3 using the XPLA SDK.
With the advent of the Blockchain industry, applications that use NFTs have taken over the planet, some of which are money grabs and, in the worst instances, frauds. Because of these uses, the NFT market may pose significant dangers to both users and investors. The XPLA chain was created to address these issues and to establish the benchmark for the long-term, sustainable development of blockchain applications. XPLA chain is designed to be a platform that may embrace the blockchain media content ecosystem, with a focus on gaming, content, and entertainment that will continue to progress in the future.
Tendermint serves as the basis for XPLA, also powered by the Cosmos SDK and a PoS algorithm. The XPLA chain is designed to support not just the Cosmos ecosystem but also the Ethereum Virtual Machine (EVM), which will boost XPLA chain ecosystem usage by enabling Ethereum-based blockchain and dApps. Validators like Chorus One operate full nodes, contribute to consensus via vote broadcasting, validate new blocks on the blockchain, and participate in blockchain governance. Validators may vote on behalf of delegators, and their voting power is weighted according to the total amount staked. The validators and delegators will earn a portion of the transaction fee as compensation for new block verification and will participate in the mainnet operation with the shared objective of developing the ecosystem by managing the mainnet node. The top 130 validators enter the active set.
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Token distribution: The maximum supply is $2Bn XPLA tokens. Refer to the whitepaper for a detailed overview of the tokenomics.
Inflation rate: 0%
Slashing: Pledged tokens can be slashed.
Chorus One Commission: 7.5%
Re-Staking: You need to withdraw rewards and re-stake them with some frequency if you want to make use of compounding returns hence additional delegation is needed for compounding.
We are excited to announce that we have onboarded Teritori Network as validators. Teritori is a multi-chain hub aimed to link IBC and non-IBC communities, trade services and NFTs, start new projects, and expand current ones. To facilitate trade, Teritori allows users to affirm their Web3 identity & protect their reputation. The center prominently contains daily-use dApps such as an NFT launchpad, a marketplace, and social features for people and communities: Innovate, Trade, and Organize. The network will also include a DAO tooling suite, a job board, and a multichain dApp store.
Following the bull run, the Teritori team examined the ecosystem and addressed existing concerns: despite the desire to decentralize everything, most of the technologies we use on a daily basis remain centralized, resulting in scams and security vulnerabilities. Builders, on the other hand, have struggled to locate the people to execute the right job in their projects. Because the majority of our interactions are driven by community approval, protecting our identity and reputation has become critical. Teritori also plans to introduce Berty Protocol to offer a decentralized alternative to the existing Web2 communication tools we all use on a daily basis. With the transparency that’s provided in tool sharing and identity verification, Teritori seeks to solve these pain points.
Teritori is based on the Cosmos SDK chain and the governance/utility token TORI. TORI is initially very inflationary. The Teritori DAO and TORI holders will be able to vote on the blockchain’s future direction as well as the next features/dApps to be added to the ecosystem. 40% of tokens released per block will be in the form of staking incentives given to validators like Chorus One and delegators who assist to protect the chain. Validators and delegators are critical to the Teritori network’s security. At genesis, there will be 100 validators according to their stake. Additionally, Teritori is monitoring the latest developments on GNOLand in order to be among the first projects to deploy the dApps on this new ecosystem when live.
Validating Rights: The weight of validators is determined by the amount of staking tokens bonded as collateral.
Token distribution: Similar to Bitcoin’s ‘halving’, issued Tori tokens are reduced by ⅓ every year. 200M Tori tokens were issued at mainnet genesis.
Inflation rate: 126.59%
Staking APR: 491.40%
Slashing: Pledged tokens can be slashed.
Chorus One Commission: 5%
Re-Staking: You need to withdraw rewards and re-stake them with some frequency if you want to make use of compounding returns hence, additional delegation is needed for compounding.
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?
