GM to all StakeWise folks! It’s time for a small technical update in connection to Shapella.
The Shapella upgrade brought partial and full withdrawals to Ethereum PoS, a widely anticipated yet still truly pivotal change to the staking mechanics. Here is everything you need to know about how it affects the different StakeWise products, and what (if anything) you can do to take full advantage of it.
The possibility of partial and full withdrawals on Ethereum do not spell many immediate changes for the StakeWise Pool product. This is because the withdrawal & compounding functionality enabled by Shapella will be introduced together with the StakeWise V3 release on mainnet, estimated to be just weeks away. However, another important change must be implemented in connection to Shapella.
A portion of the StakeWise Pool validators were created with 0x00 withdrawal credentials using a trustlessly shared withdrawal key, which must now be rotated to the 0x01 withdrawal credentials to further minimize trust in the StakeWise platform. The rotation of withdrawal credentials will be executed by the holders of the Horcrux, a cryptographically encrypted, distributed withdrawal key, subject to approval by the StakeWise DAO.
We invite all StakeWise DAO members to familiarize themselves with the forum post about the rotation procedure and express their opinion in the Snapshot vote below:
StakeWise DAO Snapshot vote: https://vote.stakewise.io/#/proposal/0x42a27ead072c308dc70ddc2f348bb3f0ae97120f91208c7cd34f9dd59dd365bf
Why is the rotation of withdrawal credentials to 0x01 address needed for StakeWise Pool?
StakeWise Pool must support partial and full withdrawals, to facilitate redemption of sETH2 and rETH2 tokens into ETH staked in the Pool. While the ability to redeem tokens for ETH staked in the Pool will be shipped with a delay (related to StakeWise V3 development), it is essential StakeWise prepare for this as much in advance as possible.
Partial and full withdrawals require validators to have an execution layer address, known as the 0x01 withdrawal address, to be set. Owing to the timing of the creation of some StakeWise Pool validators (February 2021 — April 2021), their withdrawal credentials are currently using a 0x00 withdrawal address standard. Hence, the existing withdrawal credentials must be changed to a 0x01 withdrawal address before they can benefit from partial and full withdrawals.
The introduction of withdrawals and partial withdrawals functionality on Ethereum means that our Solo users can start receiving liquid ETH rewards from staking (including those rewards accumulated until this time) or exit their validators to fully unstake ETH to the chosen address.
If you are a Solo staker in StakeWise and want to enable a partial withdrawal (receive liquid rewards) or a full withdrawal (receive your full validator’s balance) of ETH from your validator(s), please follow this guide created by the StakeWise team:
After completing the steps in the guide, you will have enabled partial withdrawals for your validator to the address you specify. In order to fully exit your validators from the network and stop using the StakeWise Solo service, follow the quick instructions here:
The terms of service for Solo validators remain unchanged at 10 DAI per validator per month.
Why do I need to do the rotation of withdrawal credentials?
Partial and full withdrawals require validators to have an execution layer address, known as the 0x01 withdrawal address, to be set. Owing to the method of creation of all StakeWise Solo validators (February 2021 — September 2021), their withdrawal credentials are currently using a 0x00 withdrawal address standard. Hence, the existing withdrawal credentials must be changed to a 0x01 withdrawal address by Solo users before they can benefit from partial and full withdrawals.