Interview with Vlad Makarov of Everstake
We asked Vlad’s opinion regarding several topics such as decentralization, incentivisation, challenges and DEFI in context of our Staking Ecosystem Case Study.
Everstake helps institutional investors and regular token holders to profit off their crypto assets. They operate in a wide range of Proof of Stake blockchains, providing our customers with numerous options to choose from. Pick the most promising projects, delegate with Everstake and make 5%-20% annually.
SR: How do we ensure and incentivize further decentralization within the staking ecosystem?
VM: We believe that the possible solution would be to oblige staking services maintain a certain proportion of the funds that they stake for themselves and the funds that users delegate them. In this manner, the maximum size of a staking pool would be limited to the number of coins it possesses. This solution might not eliminate the problem, but it has good chances to enhance decentralization.
SR: What are the biggest challenges for Proof of Stake and Staking, that we still have to overcome or may still face?
VM: In our opinion, we, as a community, have two significant challenges to work on: incentivization schemes and mass adoption.
Incentivization schemes. Many PoS and PoS-based blockchain networks use inflation as the primary mechanism for staking incentivization. For users who do not participate in staking, this would mean that their share in the system dilutes as new coins/tokens are emitted.
Mass adoption. We have to face reality and be honest with ourselves – the blockchain technology has not been mass adopted yet. Therefore, we have no idea how regular users will be comfortable with the whole concept of staking. Also, we have lots of work to do to improve the user-friendliness of the blockchain technology in general. We do not think that dealing with public/private keys is something that users want to do in their everyday activity.
SR: What do you consider to be the most important aspects to attract delegators to your staking service?
VM: We premise our marketing strategy on the quality of our communication with clients and value-added services. We believe that staking service firms are the focal points that accumulate all the latest information about the blockchain networks they operate in, we aim to become to our users, something like Bloomberg has become to investors.
SR: What is your preferred terminology for rewards by staking? ROI, Staking Yield, Reward Rate, Interest Rate, Annual Percentage Rate?
VM: Staking Rewards/Yield. “Interest Rate, Annual Percentage Rate” come from the banking industry and refer to a type of earnings of entirely different nature.
SR: Currently around $6 billion is locked in Staking. Can you ballpark this value in one year? Currently around $0.5 billion is locked in DEFI. Can you ballpark this value in one year?
VM: The value of coins/tokens locked in staking depends on two factors: exchange rate and staking ratio. While the prediction of the former is deemed hardly possible, we believe that the latter will tend to fluctuate around 40%-60% depending on how often coins/tokens are used in everyday life. The product of these two values is the predicted value of the staked coins.
As far as we know celsius.network alone has $200 million in assets, so how did you calculate the figure of assets locked in DEFI? (Editor’s note: Locked in DEFI calculation does not account for the platforms like Celsius and SALT because they use crypto collateral to centrally issue fiat loans, which does not fit into the “pure” DEFI space. But you do have a point, if open the definition to include various financial products where crypto is used as colateral, we will end up with a number vastly higher than $0.5 billion)
SR: Which value-added services or products are the main focus for you at the moment? (e.g. insurance, governance dashboards, staking mobile wallet, custodial services, open source contributions, community meetups etc)?
VM: Staking mobile wallet, open source contributions, community meetups, data provision.