The EBA has joined forces with its member Staking Rewards to help to foster and strengthen the staking ecosystem within the European Union with Staking Rewards’ Verified Staking Provider (VSP) initiative. The program has attracted a diverse set of providers who applaud the program’s rigorous verification process and the increased visibility it provides for their services. We spoke with Christoph Matthias, Product Owner VSP at Staking Rewards about the goals, process, challenges for the industry, and future plans for the program.
🎤 Christoph, according to the Staking Rewards 2022 Ecosystem Study, trust is a crucial factor for the industry. Could you elaborate a little on the study and how these findings tie into the VSP?
The Staking Rewards 2022 Ecosystem Study highlights the crucial role trust plays in the cryptocurrency industry. The study examined the impact of several negative events that occurred in 2022, resulting in the loss of significant amounts of money for many individuals. These events eroded trust in various crypto products, and the need for trustworthy staking providers became even more apparent. While a staking provider may appear trustworthy at first glance, there may be underlying issues that users are not aware of. This underscores the importance of having an impartial tool like the VSP to evaluate providers’ trustworthiness and ensure that users can delegate their assets to trustworthy providers.
To address this issue, the VSP was developed to restore trust in the industry and provide users with a straightforward tool to help them choose a suitable staking provider. In a recent user survey conducted by stakingrewards.com, with 1700 participants, more than 31% of users were found to be delegating to a non-custodial provider. Interestingly, approximately 34% of these users were new to the cryptocurrency space, underscoring the importance of providing trustworthy options for these newcomers.
The VSP provides an effective solution for users to find a reliable staking provider and rely on the fully independent and impartial expertise of stakingrewards.com. By leveraging the platform, users can confidently delegate their assets to staking providers, knowing that they have been vetted and deemed trustworthy by the VSP. This approach promotes transparency, security, and trust within the staking ecosystem, ultimately leading to a healthier and more robust industry.
🎤 Please take us through the verification program. How can a provider get verified?
The verification program is a crucial aspect of the VSP, designed to ensure that staking providers listed on the Staking Rewards platform are reliable and trustworthy. To apply for verification, providers can complete the Get Listed form. The platform does not discriminate based on the size of the provider, but rather prioritizes ensuring reliability and maintaining high standards of quality.
Once the provider submits the form, the next steps involve jointly signing an NDA agreement with StakingRewards regarding sensitive data and signing a service agreement with the provider. StakingRewards then sends the provider a Verification Form to assess their business operations and security setup, ensuring that they can vouch for them in good conscience.
The due diligence process includes reviewing on-chain performance data as well as the responses provided by the provider on the Verification Form, evaluating their business practices, security measures, and overall trustworthiness. Based on this evaluation, Staking Rewards assigns the SR Rating to the provider, with a passing rate of 70%. Providers who pass the verification process will be deemed verified on the Staking Rewards platform, and their profiles will feature a Verified Badge, serving as a trust anchor for the community of 400k unique monthly investors.
In summary, the verification process is a rigorous and comprehensive evaluation of a provider’s business practices, security measures, and overall trustworthiness. The process is designed to ensure that only reliable and trustworthy staking providers are listed on the Staking Rewards platform, promoting transparency, security, and trust within the staking ecosystem.
🎤 A lot of work seems to have gone in the development of the scorecard. How did you determine the verification criteria?
The verification criteria for the Staking Rewards scorecard were determined through extensive research and analysis of the staking industry, including consultations with industry experts and stakeholders. The scorecard was specifically designed to evaluate PoS providers and includes a list of evaluation criteria with corresponding weightings and best practices for effective use.
The criteria cover various aspects of business operations, delegator protection, reliability, and security setup, with a total of 1000 points available. The evaluation process is structured and objective, enabling informed decisions about which provider best fits an individual’s needs.
The scorecard provides valuable insights into a provider’s general information, legal entity, jurisdiction, terms of service, external investments and partnerships, foundation delegations, and public team. It also assesses the provider’s delegation protection, resilience to market downturns, reliability based on on-chain metrics, validator maintenance, and security setup.
Overall, the scorecard is a useful tool for PoS providers seeking to improve their practices, as well as business owners seeking to evaluate potential providers. By using a structured and objective approach to evaluation, the scorecard promotes transparency, security, and trust within the staking ecosystem.
🎤 How many verified providers are there and what are the experiences with the program so far?
As of now, there are 46 Verified Staking Providers (VSPs) that have been verified through the Staking Rewards’ Verified Staking Program. This program has attracted a diverse set of providers, ranging from established providers to newer entrants in the staking industry. The experiences with the VSP program have been positive so far, with providers expressing satisfaction with the program’s rigorous verification process and the increased visibility it provides for their services.
One of the goals of the VSP program is to strengthen collaborations between StakingRewards and the verified staking providers. The program has also helped providers integrate their services into block explorers, making it easier for users to find and utilize their staking services.
🎤 Looking ahead, what are your plans for the program?
Looking ahead, we have several plans for the Verified Staking Program (VSP) to continue improving and expanding its reach.
One of our primary objectives is to continually enhance the robustness of our methodology and add further granularity and depth to the verification process over time. These ongoing iterations are designed to facilitate the onboarding of additional providers into the program, encompassing both established players in the industry and emerging newcomers. By increasing the number of verified staking providers, we aim to provide a more diverse range of options for businesses and individuals seeking to stake their assets.
We recognize that trust is a fundamental concern for staking users, and our goal is to establish a reliable and impartial framework that promotes transparency and accountability within the industry. Through the VSP, we aim to offer a comprehensive assessment of each provider’s trustworthiness, enabling users to make informed decisions about where to delegate their assets. We believe that by expanding the number of verified staking providers, we can offer users a broader range of options while maintaining our commitment to rigorous verification standards.
Another focus for us is to expand the integration of VSPs into more block explorers, and to support staking on more chains. This will make it easier for users to find and connect with verified providers, and to stake their assets on a wider range of networks.
To support these efforts, we are also planning to create a dedicated landing page for the VSP, which will provide more information about the program and its benefits. This will include details about the verification process, the criteria used to evaluate providers, and the advantages of working with verified staking providers.
Finally, we are also planning to develop more tooling and resources exclusively for VSPs, which will help them to improve their operations and provide better service to their clients. This will include educational resources, best practices guides, and other tools to help VSPs grow their businesses and provide value to their users.
Overall, we are committed to making the VSP the premier program for verified staking providers, and to helping businesses and individuals make informed decisions about which providers to work with. We are excited about the future of staking and are looking forward to continuing to improve and expand the VSP to meet the needs of the growing ecosystem.
🎤 In your opinion, what will be the next challenges for the staking industry and how do you think they should be addressed?
As the staking industry continues to grow and mature, several challenges are expected to arise. One of the most significant challenges is balancing decentralization while making the staking experience safer and easier for everyone. The Verified Staking Program (VSP) has been developed to support decentralization and educate providers on the importance of maintaining a decentralized network. Providers should embrace the VSP and focus on building decentralized infrastructure while also prioritizing user experience and security to ensure that staking remains accessible and appealing to a wider audience. Delegators should also be aware of the potential risks of centralization and support smaller providers to promote a more decentralized network.
Another challenge that must be addressed is the uncertainty around regulation. With a lack of legal framework, providers must remain vigilant and proactive in complying with existing regulations and adapting to any new regulations that may be introduced. In addition, industry players should work together to create a self-regulatory framework that can provide guidance and best practices for providers to follow. Collaboration among industry players and active engagement with regulators can help foster a stable and supportive regulatory environment that promotes innovation and growth.
In conclusion, the staking industry will continue to face new challenges as it grows and evolves. However, by embracing new technologies, collaborating with other players in the ecosystem, prioritizing decentralization while making the staking experience safer and more accessible for everyone, and proactively engaging with regulators to create a stable regulatory framework, providers can successfully navigate these challenges and continue to drive growth in the industry.