[STAKE] MIP6 Collateral Onboarding Application

1. Who is the interested party for this collateral application?

xDai Chain team https://www.xdaichain.com/media/xdai-dev-team

2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

The xDai chain is a stable-payments L2 sidechain, providing fast, secure transactions with full interoperability and compatibility to the Ethereum Mainnet. It features a dual token model, where xDai is the native and stable transactional token bridged from a stable token (Dai) on Ethereum, and STAKE is the underlying Ethereum mainnet asset providing security and governance capabilities. This collateral application is for the STAKE token.

STAKE is a multi-chain ERC20-based staking token. It resides on the Ethereum mainnet and is bridged to the xDai chain via OmniBridge to provide network security. It supports Delegated Proof-of-Stake consensus (POSDAO), secures the payment layer and prevents malicious activities. Though initially designed for xDai, it can also be implemented in other blockchain networks for staking and governance.

STAKE is also designed as a governance token, providing chain and bridge validators the opportunity to vote on network parameters such as fees structures and staking minimums. There are plans to extend this capability to allow stake-weighted voting on transaction priority and micro-governance decisions. These efforts are evolving as public staking launches on the xDai chain.

While STAKE is the security and governance token for the xDai chain, the xDai native token is used for stable and predictable transactions, payments, and fees. It is bridged from Dai, meaning all xDai users are essentially Dai users. As of 2020-12-03T21:00:00Z, there is more than 2M Dai locked in the xDai bridge contract and circulating as xDai on the xDai chain.

In November 2020, xDai transactions nearly doubled Dai transfers.
Total Dai Transactions: xDai: 1,100,784 Ethereum: 572,396
Average Dai tx/day: xDai: 36,693 Ethereum: 19,080

3. Provide a brief history of the project.

xDai stable chain was created in October 2018 with its xDai stable coin. The idea was to build a stable blockchain with a native stable coin that could be bridged directly to a sidechain, eliminating high transaction costs and volatile prices and remove the additional gas token.

More than 2 years later, the xDai chain is currently secured by 12 nominated validators, consisting of known and respected projects within the Ethereum ecosystem including the Maker Foundation, Giveth, Gnosis, Shapeshift, and Protofire. These validators are participating in a delegated Proof-of-Stake consensus where they provide STAKE to secure the chain, but do not currently have delegators and are not subject to a rotating validator set. This will change when public POSDAO (Proof of Stake Decentralized Autonomous Organization), a new consensus algorithm, gives all STAKE holders an equal opportunity to participate and benefit from the consensus process.

The xDai chain has seen rapid adoption from projects throughout the Ethereum ecosystem as recent high gas fees and congestion have made it difficult to transact on Ethereum. As a compatible L2 solution, developers can quickly deploy their infrastructure to xDai with minimal changes. While some projects have migrated completely, others have chosen a hybrid approach, moving some resource-intensive operations to xDai while keeping others on Ethereum.

The result is an interoperable infrastructure where xDai extends and augments the Ethereum operating space with a low-cost, stable transactional environment.
With Eth2 on the horizon, xDai has plans to continue providing scalability during the multi-year transition. Once realized, xDai will be prepared to be integrated into the Eth2 infrastructure. STAKE will continue to have a valuable role as a governance token with plans to incorporate transactional sequencing capabilities and more.

Read more:

4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

STAKE address on Etherscan

Resources:

5. Link any available audits of the project. Both procedural and smart contract focused audits.

6. Link to any active communities relating to your project.

7. How is the applying collateral type currently used?

STAKE token supports Proof-of-Stake consensus, secures the payment layer, prevents malicious activities, and allows block producers to receive their staking incentives. It will also provide stake-weighted governance voting privileges for holders. It’s not implemented in everyday user transactions.

Users can also participate in staking on the Ethereum mainnet through the EasyStaking application. This serves to limit supply and provides emissions for those who lock STAKE into EasyStaking. It also incentivizes STAKE liquidity providers on Uniswap.
As of 2020-12-03T21:00:00Z, 1.298M STAKE with a value of over 13M in USD are staked in the Easy Staking protocol on Ethereum.

More information on EasyStaking.

8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

POA Networks, Ltd., a private limited company incorporated under the laws of Cayman Islands, with company number 327912

9. Where does exchange for the asset occur?

Exchange for the asset occurs on Balancer, Uniswap, Honeyswap, Mooniswap, BitMax, Poloniex, Gate.io and other exchanges.

Read more:

10. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

The token constitutes a VFA in terms of Maltese law. Please contact [email protected] to request access to the document. Quote from the lawyers:

Unfortunately, our legal opinion is not meant for widespread disclosure and therefore we would not be able to accommodate its publication for the broad public.

11. (Optional) List any possible oracle data sources for the proposed Collateral type.
Coingecko, CoinMarketCap, Uniswap LP pool?


20 Likes

The xDAI chain is one of the major users of DAI.

It makes sense to build this bridge!

6 Likes

Would like to be one of the first users for this collateral if it passes!

And indeed, it makes sense as more DAI gets utilized on the xDai sidechain.

3 Likes

xDAI has been very valuable to onboard new users and get them familiar with DAI through apps such as the BurnerWallet.

Gnosis and dxDAO are currently porting Omen prediction markets to xDAI making prediction markets more accessible and possibly driving new demand for DAI used in prediction markets.

I am in favor of onboarding Stake!

4 Likes

We have seen a solid amount of adoption + discussions in the DeFi scene about xDai and a clear upwards trajectory of usage.

xDai is an extremely valuable platform and a great example of the utility of stablecoins such as DAI.

I would love to see Stake listed as collateral.

3 Likes

STAKE is highly inflationary. 15% yearly. It is like having a credit card debt.

It is not a critique for the tokenomics. This model forces STAKE holders to use one of two options. STAKE it in easy staking or put it in to the Uniswap STAKE/WETH pool. That is good tokenomics.

Please consider to use the Uniswap STAKE/WETH pool tokens as collateral. This pool gets STAKE inflation payouts directly and automatically in to the holding wallet. This should reduce collateral risk by a huge margin.

I would be very keen too, particularly if we can use of the Uniswap STAKE/WETH LP tokens as collateral.

3 Likes