Signalling Proposal - Ethereum Staking


The Eagle Ops Guild, hereby submits a financial signaling proposal that the Aragon Association stakes all the 57k ETH with Lido (worth $106.6m at the time of writing). The funds are currently managed by the Aragon Association on the Ethereum chain in the following smart contract addresses:

  • 0xfb633f47a84a1450ee0413f2c32dc1772ccaea3e
    • 28,443 ETH, worth 52.7m at the time of writing
  • 0xcafe1a77e84698c83ca8931f54a755176ef75f2c
    • 29,078 ETH, worth 53.9m at the time of writing

The custody of the requested funds, at least for now, remain with the Aragon Association.

By staking ETH, the Aragon project can contribute to securing the Ethereum ecosystem while also earning yield.

Staking with Lido

The preference for Lido as a liquid staking protocol is not only based on the fact that it is the most battle tested solution with the highest liquidity and TVL. Lido is also a relevant stakeholder in Aragon’s ecosystem as the protocol is built and reliant on Aragon’s secure smart contracts.

Exploration of future staking options

We acknowledge decentralization and diversification is also a relevant metric to consider in the protocol selection. Therefore, we will keep exploring other options to stake ETH in a more secure, battle tested, and decentralized way.

Expectation of staking with Lido

We expect the following returns by staking 57k ETH directly with Lido, given an expected APR of 4% - 6%.

Amount of ETH staked 57,000 ETH
Expected APR: 4% - 6%
Expected year one
return in ETH 2,280 stETH - 3,420 stETH

Risks & Dependencies

As with any allocation, staking ETH through liquidity staking derivatives (LSD’s) such as Lido, carries a certain amount of risk. The team identified several risks and dependencies that should be taken into account:

Smart contract risk

As the functionality of liquidity staking derivatives is dependent on the proper functioning of smart contracts. There is a risk that the smart contracts could have bugs or vulnerabilities that could be exploited by attackers, resulting in financial loss.

We are mitigating this risk by only staking with Lido protocol, which has undergone rigorous code reviews and security audits. We will also closely monitor the development of these platforms and stay informed about any security issues that may arise.

Slashing risk

As validators who participate in the staking process can be penalized if they behave maliciously or negligently, it could result in a loss of funds.

Lido inherently mitigates the slashing risk as it has a selected group of trusted validators.

Liquidity risk

As LSD’s are relatively new financial products, there is a risk that there may not be enough liquidity in the market to buy or sell staked tokens when desired. This could make it difficult to exit a position or could result in unfavorable prices.

This risk is mitigated by the implementation of Ethereum’s latest Shanghai hardfork.

Regulatory risk

As the operation of a liquidity staking derivative, like Lido, depends on regulatory compliance, there is always a risk that regulators could introduce new rules or regulations that could impact the operation of these platforms. This could lead to increased costs or restrictions on the use of these platforms.


Not sure why now is the time to do this?

AA has yet to give any transparency - still waiting on:

40m liability report
btc aa address

This seems to again, be ignoring the problems on hand.

Will be more than happy to consider this proposal when AA wants to give clarity and transparency.

As well as maybe not staking all eth at once - 10 -25k sounds like a better number here.

I am not part of the AA so I cannot give you any more information regarding your questions.

But, generating some yield until or if a decision is made seems relatively sensible. Is there a reason you would prefer 10-25k?



I don’t see any reason why not to do it now. It is just $ being left on the table, the stETH is liquid and can be used for anything, team funding, buybacks etc.

We can always drop the amounts. Transparency issues aside, I don’t have control over those, every day it is not staked it is costing $11,250 (per day). I am looking for the maximum value to be transferred, I honestly thought everyone would be looking at this the same way. Teams - More funds for projects Buy-back proponents - More money for buy-backs.

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I don’t see why this hasn’t been done a very long time ago? But now we decide now is a great time while we wait for a accurate treasury report / treasury addresses / grant report / liability report? Strange to be frank.

As it stands we have received no transparency from the AA so I feel it would be wise to wait for said transparency to then move forward… i think this makes sense.

Why move any more funds and take actions until it is clear what is going on here with the AA.

Again thanks for your opinion. I will still be pushing forward and adding it to vote after two weeks. You will be welcome to vote against it when it is live. If you have anything constructive to add feel free. Look forward to more input.

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As a long term ANT holder, contributor to the Aragon project, and the Ethereum ecosystem, I support this proposal.

Ethereum’s Shappella Upgrade went smooth on Apr. 12, 2023 without hick-ups or large price movements in the last 1.5 months after the withdrawal hardfork.

As these risks have cleared up now, it is the right time for Aragon to participate in the staking ecosystem.
Although generally preferring more decentralized staking solutions, I fully support this proposal - also to strengthen ties with Lido. One key advantage of Lido as a liquid staking protocol is that stETH is not bound to month-long exit periods depending on the exit queue length, as this is the case in solo staking.