Signalling Proposal - Ethereum Staking


The Eagle Ops Guild, hereby submits a financial signalling proposal that the Aragon Association stakes all the 50k ETH with Lido and Rocket pool (worth $94m 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 & Rocket pool

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. The 2nd suggested LSD, Rocket pool, is also battle tested as it concerns the 3rd largest LSD at the time of writing that is significantly more focused on decentralized staking.

Exploration of future staking options

We acknowledge decentralization 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 40.00k ETH directly with Lido, given an expected APR of 4% - 6%.

Amount of ETH staked 40,000 ETH
Expected APR: 4% - 6%
Expected year one
return in ETH 1,600 ETH - 2,400 ETH

Expectation of Rocket pool allocation (20% of 10k ETH)

Conducting the liquid staking option, by staking 10k ETH directly with Rocket pool, with an expected APR of 3% - 5%

Amount of ETH staked 10,000 ETH
Expected APR: 3% - 5%
Expected year one
return in ETH 300 ETH - 500 ETH

Risks & Dependencies

As with any allocation, staking ETH through liquidity staking derivatives (LSD’s) such as Lido or Roket Pool, 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.


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.


Hi Alex,

Thanks for the proposal. I agree with @mheuer that with Ethereum’s Shappella Upgrade this move is now greatly de-risked.

Before moving this to AA Committee vote, I would love to better understand:

  • stETH vs wstETH: considering that the wrapped version of stETH has higher interoperability across DeFi protocols, I believe it may be interesting to keep convert to wstETH instead of keeping stETH. Thoughts?

  • Concentration: I assume that the main reason for concentrating in Lido is simplicity and security. Also, due to the fact that Lido is built on aragonOS. However, from a risk management perspective, it also increases protocol risk. Could you provide some clarification as to what is the rationale for such concentration, and your thoughts on future steps to diversify risk?

Please note that as Luis commented here, there’s an active proposal being voted at AA to consolidate some of the the current portfolio of non-native assets to wstETH, so the final amount of ETH available to stake may be higher.


Liquid Staking is a good idea, however, going all in on Lido’s stETH flies in the face of Ethereum’s and Aragon’s goals of supporting decentralization. Lido is poised to take 33% of all validators soon.

Any movement of funds to liquid staking should be made to a diversified portfolio of LSTs as vetted by the DAO. At the moment, this would be stETH and rETH. In the future, it would also include others (swise, stader, etc.) as they become vetted.


@Joan_Arus and @mheuer are both raising valid points that should be considered, so here is my personal take (not financial advise):

stETH vs. wstETH:
wstETH opens a significant amount of opportunities in the DeFi space, where you can yield an additional APR (i.e. 1-5%, depending on the risk) on the staked ETH.

This additional smart contract iteration (wrapping stETH to wstETH) adds additional smart contract risk, which could be perceived as an acceptable risk as this is battle tested.

However, wrapping stETH does only make sense if you then also utilize the wstETH in the DeFi ecosystem. As previously mentioned this would result in an additional yield but also expose the staked ETH to more risk (DeFi exploits such as hacks, smart contract exploits, etc.).

As proven over the years, maintaining a conservative risk exposure with the Aragon Treasury seems to be a successful strategy, given the incremental growth from 25M to 200M.

Therefore, I advocate for implicating the same successful strategy regarding the ETH staking, which is yielding 4-6% APR on ETH. Which can now be deemed as an acceptable risk now that the Shappella update has been successfully implemented.

Concentration of LSD
Aragon should acknowledge these fair points regarding centralization by considering more decentralized LSD’s. However, as it is in Aragon’s best interest to start staking ETH as soon as possible (since the risk is deemed acceptable after the completion of the Shappella update). So it would make sense to start with the most battle tested (highest TVL) and closest aligned LSD (Lido is built on Aragon’s secure smart contracts). I would also like to emphasize (as stated in the proposal) that Aragon should keep exploring other LSD’s that are deemed secure, battle tested, and decentralized


rETH is battle tested
APR wavers back and forth, sometimes rETH is higher, sometimes stETH
Rocket Pool is fully aligned with Ethereum values and has voted to self-limit
Lido has significantly more tail risk
rETH is not a rebasing token and doesn’t require wrapping
Alarm bells are ringing in the Ethereum ecosystem on Lido’s aims to capture as much ETH as they can. Aragon should not find themselves on the wrong side of this issue, rather they should be a leader in protecting Ethereum.

EDIT: A few minutes after this post, Danny Ryan tweeted this warning:

The risks associated with increased Lido dominance are well documented and things have only gotten worse following the Shanghai upgrade. As a DAO that prides itself on decentralisation, Aragon should seriously consider alternatives rather than simply staking with Lido given it is a “relevant stakeholder” in the ecosystem. Below I have outlined the case for allocating capital to StakeWise specifically, but this should be seen as one part of a diversified allocation of Aragon’s staked ETH capital.

  • StakeWise has been live on Mainnet for over 2 years now, launching a few weeks after Lido. The protocol is battletested, has a proven track record of safety and security, and has provided stakers with the highest staking yields in the run-up to withdrawals due to its unique tokenomics model.

  • StakeWise is about to launch a major upgrade (V3) that will introduce a brand-new model to liquid staking and look to solve key issues seen across the ecosystem (decentralisation being a key one).

  • StakeWise V3 will give Aragon the ability to create a bespoke staking solution, such as cherry-picking their preferred node operators, locations, EL/CL clients, and MEV relays. Another DAO who currently stakes with Lido is exploring this route and will save significant costs compared to staking with Lido - Aragon can do the same.

  • Aragon would be able to hold an LST, osETH, that is highly diversified and decentralised, aligning with its ethos.

  • V3 unlocks other interesting opportunities, such as allowing Aragon DAO to stake on its own infra and even receive ETH delegations in a fully trustless, non-custodial manner. By offering staking as a service leveraging the V3 architecture as a white-label liquid staking solution and adding an extra revenue stream for the DAO.

To conclude, Aragon DAO should consider alternatives to Lido, not just because it would help the ETH ecosystem, but because these alternatives would directly benefit Aragon over and above what Lido can offer. Partnering with StakeWise DAO could also open up further avenues for collaboration, such as StakeWise leveraging the Aragon DAO products given the DAO is yet to partner with anyone in this space.

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Just to be clear, Lido isn’t simply a “relevant stakeholder” ALL staked ETH through LIDO is protected by AragonOS contracts, that’s $13 billion roughly. It is the largest user Aragon has and it’s essential for Aragon AND Lido that they migrate to the new protocol when possible. Thus I perceive our relationship with them as a huge priority. I’m not devaluing the question of dispersing our ETH later more strategically while still leaving a large amount governed by Lido and thus partially, Aragon itself.

The proposer does mention this will be discussed after. I believe the point is to quickly deploy these assets to gain rewards while other options/plans are discussed. Over $11,250/day is lost otherwise. Therefore i’d personally like to see it up in the delay app for vote. This amount basically covers the entire product budget for Aragon!

If anyone has opinions on DiVa, which is moving to Mainnet soon, I’d love to hear it!

Really love seeing everyone in here participating!


Yes, I am all for distributing it to other LSDs, originally we had a portion in rETH. I tried to keep it simple for the first staking proposal. Happy to do a 75/25 split to stETH to rETH . Then other teams can post suggestions for a portion of the ETH. Of all the projects to be staking on, Lido being the largest user of Aragon, is an excellent signal that we back our products.


Of all the projects to be staking on, Lido being the largest user of Aragon, is an excellent signal that we back our products.

I feel like this is the opposite of the image Aragon should be pushing. Ethereum is trying to avoid having the biggest players grow unchecked and garner even more control of the chain. Maybe just my opinion, but I hope we all see the cycle this sort of thinking leads to.

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Disclaimer - I am a Community Advocate for Rocket Pool

There appears to be wide consensus on this post that a diversity of stake is a relevant and valuable goal for AragonDAO, as the health of Ethereum is crucial for the health of Aragon. I would like to advocate for a diverse approach focusing on 2 elements - the most liquid and the most decentralized.

Currently, these two leaders are clear. stETH or wstETH is the most liquid LST and rETH is the only LST with a battle-tested permissionless validator set. For a more detailed analysis on the tradeoffs, see the site.

I would personally advocate for a more 50/50 split given stETH is at the 33% threshold for consensus danger that has been outlined by Danny Ryan of the Ethereum Foundation, however, I would strongly urge the AragonDAO to include at least some rETH in their final decision as it can easily handle the demand and the entire Ethereum network will be better off for it.

AragonDAO can lead by strong example.

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There is discussion on this post that there should be a reasonable degree of diversification across LSTs – despite capital inefficiencies, hence a real cost on the Aragon DAO, and despite Lido being a key stakeholder within Aragon DAO by virtue of being the largest user of Aragon.

One approach of determining the split across LST protocols is relative to current ETH TVL of respective LSTs. If only considering between Lido and Rocketpool, that would mean a split of c.90/10.

There are a few candidates that can be taken into consideration: Lido, Rocketpool, Stakewise, new up-and-coming LST protocols etc.

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Hello! Welcome to the Aragon forum.

Disclaimer: I am not in the Aragon Association, I contribute to the project as Head of Growth in the Growth Guild.

I do not disagree that staking amongst varying (top level and secure) services is advantageous to decentralise the ethereum network. However, to benefit all parties including ethereum, this should be a well thought out process/collaboration. It is essential that ALL parties have aligned incentives to mutually secure each others protocols.

Agreed! As well, it’s important to note that, vice versa, Lido secures the governance of all staked ETH on Aragon contracts. Thus Aragon is a crucial part of the health of the Ethereum ecosystem. What you are missing in your proposal is that Aragon’s health is important to Ethereum as well. Why is this important?: the incentive alignment between us, major staking providers, and Ethereum requires circular incentive alignment for the security and health of all 3 parties to have long-term success.

If Rocket Pool would like to have Aragon stake some of its ETH through its protocol we should create this alignment, as Aragon has with Lido.

A few suggestions include working with Rocket Pool on launching their onchain DAO on Aragon (currently I see Rocket Pool governs offchain using Snapshot? Would love to know more about this!) and/or a token swap between the two parties. Both together being the most incentive aligned and most advantageous.

We would be thrilled to have this conversation and explore these 2 options to secure Aragon, Rocket Pool, and Ethereum so all parties are long-term aligned and successful!

Thanks again for entering the discussion!


This completely ignores the risk part of the equation, though. Risk due to the threat Lido now poses to Ethereum and the much larger risks stETH poses due to lack of backing collateral.

If you have not read Danny Ryan’s paper, now linked twice in this thread, please do. A treasury investing purely on a slightly larger and moving APR while ignoring tail risk is not doing due diligence.

EDIT: Actually, to make my intentions very clear and speaking only for myself. I would prefer Aragon divest all stETH holdings more than I would want them to go 50/50 stETH/rETH, but I feel that is very unlikely, so at least diversifying is better. I also hold NO rETH.

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The health of the overall network must be the highest priority. 25% to 45% to rocketpool seems fair while other protocols mature.

Also, please diversify at the client level. Too much dependence on GETH is risky.

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