🌊Casimir

Jul 29

There will be many AVSs on Eigen Layer but every once in a while here at Eigen hub, we like to dive into some tooling that will help future re-stakers and node operators. One such ambitious protocol that caught our attention is Casimir. This innovative solution aims to decentralize re-stakers and validator sets through smart contracts, making re-staking and node operation more accessible to users with greater benefits. Let's delve into the world of Casimir.

Re-stakers

Currently, Eigen re-stakers face a choice between acquiring 32 ETH to become a solo staker or using liquid staking derivatives (LSDs) providers like Lido or Rocket Pool. However, these options can be challenging for many users, given the high cost of 32 ETH (around $60,000) and the inherent centralization of LSDs. Casimir addresses these challenges and offers several advantages for re-stakers, including:

Natively Staking ETH: Casimir enables users to stake native ETH directly (not LSD tokens) to multiple vetted validators through Distributed Validator Technology (DVT), currently utilizing the SSV DVT network.
Enhanced Security through Distributed Key Generation (DKG): The keys typically used for interacting with a validator are securely distributed to four different validators through RockX DKG CLI, ensuring trustless operation.
Automated Rewards Compounding: This is a personal favorite of mine. Casimir leverages Chainlink's decentralized oracle network to automate actions such as auto-compounding rewards for re-staked ETH.

By leveraging Casimir, re-stakers can stake any amount of native ETH and receive rewards in the same native currency. This distinct advantage allows native ETH holders to participate in core governance changes while avoiding third-party risks associated with LSDs. The auto compounding feature is also a uniquely productive way of increasing gains on ETH interest, as it will be more capital-efficient than human intervention. Moreover, users can withdraw their ETH staked through Casimir at any time.

Cost

While the advantages of re-staking are significant, let's discuss the associated costs. Automatic compounding relies on Chainlink oracles, incurring a LINK fee. However, re-stakers can pay this fee using ETH deposited and from a percentage of rewards automatically. Additionally, there will be fees associated with the node operating service, which are market-determined and should be competitively priced. Node operators are a service that one will always incur on Eigen Layer though, unless you run your own 32 eth Eigen Pod or are currently staking as an operator. These costs are common with decentralized networks, and will in no way be prohibitive to users.

Node Operators

Node operators face similar capital requirements as solo stakers, which can deter average individuals from participating. Casimir, however, opens doors for node operators by allowing them to run nodes on much less than 32 ETH, potentially even with just 1 ETH. Casimir's smart contracts combine the minimum amount of ETH from node operators and combine it with other validators to complete a 32 eth node with each node key sharing to perform validator duties.

Beyond reduced capital requirements, node operators also benefit from:

Lower capital costs:
Instead of 32 eth, an operator could use much less eth in order to participate.
Rewards for Larger Validator participation:
32 eth solo stakers may want to participate as they may be able to run 32 nodes, making one eligible for more Eigen rewards, MEV rewards, and maybe even airdrops.
Building a Transferable Reputation:
For SSVs networks and Casimir to work they must establish trusted node reputations which re-stakers then compare. This reputation could be quite valuable. The node operator ecosystem is in desperate need of a transferable reputation system between the distributed validator systems that are now catching on. So if you are an operater maybe it is time to check some of this tech out! One day there might be a transferable reputation system running for decentralized nodes that all protocol re-stakers can quickly check and you will want to be on it! However, that is a topic for another time!

Casimir presents an exciting opportunity for smaller re-stakers and node operators seeking participation in the Eigen ecosystem. By decentralizing re-staking and node operation, the protocol creates a more inclusive and robust ecosystem opening Eigen rewards for all. For a deeper understanding, you can explore the white paper and engage with the Casimir team on their Discord channel.

Let us know your thoughts below, and fellow node operators, feel free to ask any questions!

Scruffy