Interview with Wolfgang Albrecht of Staking Facilities
We asked Wolfgang’s opinion regarding several topics such as decentralization, incentivisation, challenges and upcoming protocols in context of our Staking Ecosystem Case Study.
Staking Facilities operates secure, reliable and performant Proof of Stake infrastructure based in Germany. Its goal is to provide easy access to new pools of profitability.
SR: How do we ensure and incentivize further decentralization within the staking ecosystem?
WA: A big part of it is educational work. Staking token holders need to recognize their responsibility to support smaller validators for networks being able to sustain a healthy and decentralized validator set. It’s a community effort, and we see positive signs pointing in the right direction.
Another path is implementing incentives at the protocol layer. The Polkadot NPoS staking scheme being a prominent example – rewards are divided evenly across all active validators, and each validator splits rewards pro-rata between delegators. Consequently, the smallest validator in the active validator set is the most profitable, pushing delegators to the smaller ones. It’s not a cure for all decentralization related problems as the same entity can spin up multiple validators, but it’s an interesting approach going in the right direction.
SR: What are the biggest challenges for Proof of Stake and Staking, that we still have to overcome or may still face?
WA: The biggest challenges seem to revolve around building the decentralized systems we aim for. While most protocols have the technical ability to support a sufficiently decentralized validator set, in practice distribution of the underlying staking token turns out to be the limiting factor. Spreading out the staking tokens as much as possible under the current regulatory environment is a tough challenge for new projects. Once tokens are tradable, being listed on a large number of exchanges, and having liquid trading pairs helps tremendously.
SR: What do you consider to be the most important aspects to attract delegators to your staking service?
WA: We are offering a broad range of high-quality projects paired with an innovative product suite making your life as a delegator as easy and convenient as possible.
Staking Facilities deploys industry-leading best practices to ensure a highly secure validation infrastructure. Our advanced monitoring system detects network anomalies quickly, allowing us to respond to incidents immediately. Nodes in different geographical regions guarantee the continuous operation of our service. We run our own bare-metal hardware in our own server racks.
SR: Which upcoming protocol projects are you most excited about and why? Is there a protocol no-one is paying attention to but should?
WA: DFINITY because they are moving away from the idea of building ‘just’ another high-performance blockchain and are instead aiming for a decentralized cloud computing platform – trying to occupy whitespace instead of pursuing more crypto infighting. DFINITY is quite a black box for now, but recent live demos and communications spark confidence that they have lots of technical substance behind their claims.
Polkadot because the team behind it has strong expertise in building high-quality blockchain software. Polkadot is a complex but powerful system that will be the foundation of a vibrant ecosystem offering great flexibility and ease of use.
Lastly, Solana. Leveraging key innovations in multiple areas such as data propagation and networking, run-time parallelization, and the underlying ledger data structure Solana aims to scale a single blockchain (no sharding!) and make it insanely fast. Bypassing the complexities and UX horrors that come with sharding and other layer-2 solutions Solana is a uniquely different approach offering a near perfect developer and user experience.
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)?
WA: We have a beta version of our staking dashboard up and running. You can check out a demo here: https://stakingfacilities.com/dashboard – The aim is to bring transparency and analytics to your personal staking operation. E.g., it offers data export of all your staking rewards with historical prices of every payout – helping tremendously with stuff like tax reporting. For now, it supports Tezos and Cosmos will be added in the next two weeks. We have some exciting ideas about governance related products, stay tuned!
SR: What do you suggest will increase awareness amongst people about staking and earning interest on crypto-assets?
WA: Staking and it’s visibility will be naturally growing with all the major PoS based networks going live in the next months and years. Since holding staking tokens and not staking them incurs a significant cost (it’s a tax on not helping to secure the network) every investor and business will need to get familiar with the concept of staking. Consequently, products and services around it will inevitably be a major topic over the coming years.