
<p>Staking Mondays is a weekly podcast by Staking Rewards that dissects everything staking, from projects to industry leaders and everything in between. <a href="https://everstake.one/" target="_blank" rel="noreferrer noopener">Everstake</a> CEO Sergey Vasylchuk joined us on the November 23 episode to discuss how Everstake is fixing RPC issues with <a href="https://extrnode.com/" target="_blank" rel="noreferrer noopener">extrnode</a>, an open-source load balancer for Solana.</p>



<p>You can find a recap of this great conversation below. You can also find the original video <a href="https://youtu.be/oCNlUE6UWu8" target="_blank" rel="noreferrer noopener">here</a> if you prefer to watch it on  YouTube.</p>



<h2 class="wp-block-heading"><strong>Key takeaways:</strong></h2>



<ul>
<li>Everstake first launched as a validator on EOS but now supports 70+ blockchain networks.</li>



<li>New use cases are entering the validator industry, the highlight being the introduction of RPC nodes and bridges.</li>



<li>Everstake wants to become a guardian or validator of all bridges and dApps that use the RPC Layer.</li>



<li>Everstake launched the <a href="https://mirror.xyz/extrnode.eth/0CtSTTf2HldE-ggDAJWY5_Ig1mg9QlX-ZZXV6l4BhPc" target="_blank" rel="noreferrer noopener">extrnode load balancer</a> to enable devs to share node resources from a cluster of RPC endpoints rather than build their own backups.</li>



<li>The FTX collapse saw thousands of devs leave Solana but Sergey believes this incident will only make the platform “stronger”.</li>



<li>The extrnode load balancer is currently in its trial phase, and developers can download and test it here.</li>
</ul>



<h2 class="wp-block-heading"><strong>What is Everstake?</strong></h2>



<p>Everstake has established itself as a trusted decentralized staking provider catering to over 70 blockchains, including Osmosis, Solana, Ethereum, and NEAR. It provides a high-quality, reliable, and secure staking service to 625,000+ users spread across the globe.</p>



<h2 class="wp-block-heading"><strong>What drove you to start Everstake?</strong></h2>



<p>Everstake started in 2018 when we realized that scalability holds the key to the mass adoption of blockchain technology. Faster transaction times are vital to the widespread use and adoption of decentralized applications because they help create a more satisfying user experience. We started experimenting with Dash as our first staking coin. Then it was EOS, but we soon realized that EOS wasn’t fast enough— EOS could only do two blocks per second at the time. So we decided to provide critical infrastructure and node services for the EOS ecosystem to increase the network&#8217;s throughput and, therefore, its scalability.&nbsp;</p>



<p>The idea was not to obtain a financial reward from staking. Rather, it was to develop a crucial decentralized staking infrastructure and hopefully challenge other participants, such as validators and block producers, to process blocks faster. The community quickly saw the value Everstake was bringing to the EOS ecosystem, and it wasn’t long before people began following our project. That’s how Everstake developed from originally a side project into a business that is now contributing to the security of more than 70 blockchains, including Solana, ETH, NEAR, and more.</p>



<h2 class="wp-block-heading"><strong>How big was your team when you launched Everstake?</strong></h2>



<p>We were a team of three or four people when we started working on Everstake. It was just a group of friends with a passion for blockchain technology working on this side project without knowing whether it would work.</p>



<h2 class="wp-block-heading"><strong>Where do you see the validator industry now, what has changed since 2018 up to 2022?</strong></h2>



<p>We have much more perspective today than before. The validator industry will continue to be highly competitive since everyone can get into staking now. However, providing sustainable staking is difficult since it requires investment in business processes, management and infrastructure. You need to have the highest uptime, provide the hubs, offer customer support, conduct marketing, and other services.</p>



<p>In terms of hosting, we see new emerging use cases as we transition into Web3. We started just with block production, but now we have RPCs and bridges, and there are a lot of things to validate today.</p>



<h2 class="wp-block-heading"><strong>Do you think consolidation in the validator space would help make staking more efficient?</strong></h2>



<p>Yes. Running an efficient staking operation requires an enormous effort from the management side. Managing people and working with the team is much harder than just building the hardware or site.&nbsp;</p>



<h2 class="wp-block-heading"><strong>What value-added services does Everstake provide and why?</strong></h2>



<p>Everstake’s philosophy is to provide value to the community and to remain competitive in the space. Apart from running faster nodes for Layer-1 blockchains, we also want to validate Layer-2 networks. We want to become guardians or validators in the bridges and all these decentralized apps that require RPC nodes to access the blockchain.</p>



<p>RPCs have been singled out as a potential weak link in the blockchain ecosystem because of their inherent vulnerabilities. They are the main point of attack when it comes to hosting dApps. Our experience shows that half of the industry goes down if RPC is down, causing severe consequences to the entire ecosystem.&nbsp;</p>



<h2 class="wp-block-heading"><strong>Can you give us a breakdown of your users/audience?</strong></h2>



<p>Our audience is quite huge—about 700,000 users delegate their tokens with Everstake across 70+ blockchains. We aim to achieve around one million users by next year. And the big advantage for us is retail customers, so we have thousands of small customers who usually start with staking one token, ten tokens, and then it grows to a thousand or more. So, we are targeting retail customers looking for a simpler way to maximize their staking rewards.</p>



<h2 class="wp-block-heading"><strong>Everstake launched the extrnode open-source balancer for RPC nodes. Which issues did you see with the current status of public RPC nodes? What was the problem that brought you to developing extrnode?&nbsp;</strong></h2>



<p>There are many issues. The first one relates to the financial aspect of running an RPC layer. If a dApp suffers a DNS attack or any other attacks, the application will fail to receive a response from the node. To mitigate the attack or restore the service, it would require the app to spin up other nodes or redirect to backup nodes, which requires a significant financial overlay from the developer. Not many dApp devs can afford to run backup nodes, so it becomes crucial to have bootstrapping options.</p>



<p>Secondly, blockchain is becoming bigger and bigger, with terabytes of data added to the ledger every year. As blockchain grows, more players are needed to provide the critical infrastructure to run the networks. We also need to expand the decentralization of these chains to reduce their reliance on centralized hosting providers. extrnode was created to provide extra backup nodes for blockchain infrastructure so that devs don’t have to spend thousands of dollars building their own. The goal is to optimize the cost of running dApps by leveraging the resources provided by various validators.</p>



<h2 class="wp-block-heading"><strong>How does extrnode stand out from the other solutions such as Anchor or Pocket Network?</strong></h2>



<p>Each project, validator, or participant of extrnode technically maintains its own node and uses it as a primary one. But what makes us different is that we allow our participants to share our node resources instead of having to spin up their nodes when they need backup or extra resources.</p>



<p>So, for example, if your application uses a hundred requests per minute, and sometimes you receive not a hundred but 150, send these 50 extra requests to extrnode. Other participants will share this load, and you will pay only a few extra dollars for the service. So, extrnode provides a backup to your primary nodes, helping to maintain 99.99% uptime.</p>



<h2 class="wp-block-heading"><strong>You launched the extrnode load balancer on Solana. Was there a specific reason you decided to start with Solana?</strong></h2>



<p>There were many doubts about Solana&#8217;s capability to support such a system, but we decided to experiment with it anyway. So we published a list of publicly-available RPC nodes for Solana and later wrapped it into a balancer to make it easier for the community to use.</p>



<h2 class="wp-block-heading"><strong>Could you just give us your thoughts on the current situation on Solana after the FTX collapse?</strong></h2>



<p>From a development point of view, we don’t see any significant drop in DeFi projects on Solana right now, but this may change. Now we have about 1,800 validators versus 3,000 pre-FTX collapse, which suggests that Solana suffered some reputational damage. We believe this incident will make Solana stronger, but we need to survive during this depression.</p>



<h2 class="wp-block-heading"><strong>Is running a Solana Validator node feasible for smaller players given the current price of Solana?</strong></h2>



<p>If you have some incentive other than money, don’t be afraid, you will find a way to survive. If you have just an economic model to become a validator, or if you need to have initial investment, just don’t do it.</p>



<h2 class="wp-block-heading"><strong>Do you think there is a point at which Everstake can become too big and therefore create a centralization issue?</strong></h2>



<p>No. There is some type of issue with the exchanges that hold a significant number of client assets under their custody. But this is not the case with us validators since users can re-delegate their assets anytime. Also, users can vote to have any validator they don’t like to be removed from the ecosystem.</p>



<h2 class="wp-block-heading"><strong>Everstake was launched during a bear market. What are the benefits of launching during a bear market?</strong></h2>



<p>Unlike bull markets, projects that launch during a bear market do that with a purpose. Our purpose was to make blockchains faster, and the bear market gave us time to build. This also explains why Everstake doesn’t have a token, as we are purposely driven to build the critical infrastructure that chains need.</p>



<h2 class="wp-block-heading"><strong>When can we start using extrnode?</strong></h2>



<p>We’ve already published our open-source load balancer for Solana, and you can start deploying it using Docker or directly on your infrastructure. We will also deploy publicly available node hosting on our site for experimental purposes only.<strong>&nbsp;</strong></p>



<h2 class="wp-block-heading"><strong>Is there some documentation that you can point people to read up on this?</strong></h2>



<p>Yes, we are working on the documentation. Just a few of us are working part-time on this social experiment, but we plan to invest more energy and resources if it takes off.</p>



<h2 class="wp-block-heading"><strong>What’s the company’s structure?</strong></h2>



<p>We are self-funded, profitable, and sustainable. We are fully operational and try to remain independent as long as possible. We may decide to raise money in the future, but it will only come from professional and share-minded people in the industry.</p>



<h2 class="wp-block-heading"><strong>Do you hedge your token price risk of the networks you validate?</strong></h2>



<p>If you have some assets, you technically could develop some strategy with hedging, but if you have 70+ blockchains and half of them are illiquid, there is not much room for hedging. If we select a project to support, we consciously see this as a<em> </em>benchmark for the next one to three to five years.</p>



<h2 class="wp-block-heading"><strong>How do you manage to pay salaries of over 125 employees?</strong></h2>



<p>We have a reserve. From every profit we generate, we put 10% into the reserve fund. This bear market hit us hard, and we put a considerable portion of our reserve into supporting our efforts in Ukraine. But we respect our customers, we respect our partners, and we make responsible decisions and try to create a balance between being responsible partners and being cash-positive.</p>



<h2 class="wp-block-heading"><strong>What would you suggest for someone who wants to work at Everstake?</strong></h2>



<p>Most of our employees come to us with less professional knowledge and experience, but they greatly desire to be in this market. They were already creating value for various communities like Cardano, Solana, and Tezos, and that’s how Everstake noticed them.</p>



<h2 class="wp-block-heading"><strong>What’s <strong>extrnode</strong></strong>&#8216;s<strong> roadmap for 2023?</strong></h2>



<p>The next steps for extrnode will depend on how many people use the extrnode load balancer. If we see substantial growth in the number of requests for extrnode, we may decide to charge a fee (e.g., 10%) to make the operation sustainable. We’ll share the rewards with anyone who wants to join this network and will see how it works. We see extrnode as a near-future tool for keeping smart contracts transparent on-chain and delivering an automated service for rerouting requests around the network.</p>



<p>We also plan to participate in liquid staking in Solana and Ethereum, but only as an infrastructure provider. In the long term, we plan to onboard more blockchains and continue to build extrnode as an infrastructure component of Everstake.</p>



<h2 class="wp-block-heading"><strong>How do you manage to support 70+ networks with all the governance that is required?</strong></h2>



<p>This is another reason we try to hire people inside the blockchain community who understand how the ecosystem works. We also have a decentralized decision-making system where managers of the networks we support discuss proposals with that community and vote. Staking is about governance after all. It’s about the votes. People delegate you the right to make a decision, and you have to make a proper decision because if you don’t do it, you go against the network.&nbsp;Check out the open-source extrnode on the Everstake website or follow them on <a href="https://discord.gg/PqrbhKNpA5" target="_blank" rel="noreferrer noopener">Discord</a> and <a href="https://twitter.com/everstake_pool" target="_blank" rel="noreferrer noopener">Twitter</a> to stay up to date with their latest developments.</p>


Staking Mondays Recap with Sergey Vasylchuk of Everstake