Dear Reader, CF Benchmarks launched the CF Ethereum Staking Reward Rate (ETH_SRR) in response to the growing demand for a reliable and daily realized Ethereum (ETH) staking reward rate. The inaugural CF Staking Series benchmark aims to precisely measure the economic incentive structures linked to Ethereum’s Proof of Stake (PoS) blockchain.
Furthermore, Ethereum staking rewards from the likes of the consensus layer (block rewards, attestation rewards), execution layer (transaction fees), and Maximal Extractable Value (MEV) are taking the talk of investor interest, according to CF Benchmarks in a blog post. These rewards, however, come with associated penalties known as ‘slashing’ for validators breaking blockchain rules.
This signals that the institutional adoption of ETH is in effect. Ethereum’s share of PoS protocol dominance hit 79% in Q3 2023, solidifying a PoS market stake in the total crypto asset market capitalization. Large participants risk issues with third-party data reliance, impacting reliability, accuracy, and representativeness in their operations, raising significant concerns.
Moreover, ETH_SRR employs a multi-contributor technique backed by validated Staking Service Providers meeting Benchmarks Regulation standards. These institutions play a crucial role in supporting the initiative. This reduces the risk of insufficient market representation from relying on a single data source.
Unlike some reward rates that use gross network reward rates, the ETH_SRR avoids potentially including data from ‘slashed’ contributors, hence having a higher accuracy. Additionally, the benchmark side-steps the riskiness of depending on potentially dangerous Decentralized Finance (DeFi) protocols. These protocols can leave participants vulnerable to bugs, exploits, and non-compliance with KYC/AML regulations.
The CF Staking Series, expressed through the CF ETH Staking Reward Rate, is the first regulated benchmark for PoS protocols. It relies solely on input data from eligible Constituent Staking Service Providers, ensuring transparency. This approach provides a representative indicator of daily realized rewards in the staking ecosystem.
CF Benchmarks Works Towards Preserving Market Integrity
CF Ethereum Staking maintains market integrity and data reliability with a curated pool of professional validators, ensuring robust reward rates. Any validator that doesn’t support standards dynamically will be excluded from a subset, reinforcing the aim towards transparency and accuracy at every benchmark step.
Furthermore, The CF Ethereum Staking Reward Rate is a regulated benchmark, an EU-BMR-compatible benchmark, and part of the UK Benchmarks Regulation (BMR) framework. Ensuring a robust framework for financial product providers will facilitate non-custodial staking on the Ethereum blockchain. The support comes from institutional-grade Constituent Staking Service Providers.
Named Kiln, Staked, Figment, and Blockdaemon were the four participants of the inaugurating CF ETH Staking Reward Rate. According to the announcement, these account for 145k validators, or nearly 16.5% of the entire staked ETH capitalization.
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Meanwhile, in August, CF Benchmarks agreed with CME Group Inc. (NASDAQ: CME) to deliver Bitcoin (BTC) and ETH reference rates. CF ETH Staking introduces a transparent benchmark for PoS protocol evaluation. It ensures reliable staking reward rates with regulatory compliance.