StakeWise V3 On Gnosis Chain: What To Expect & How To Migrate
StakeWise V3 is now live on Gnosis Chain!
This upgrade from the previous version of StakeWise is a massive advancement in terms of how staking GNO in StakeWise looks, feels, and, most importantly, rewards you for participation in the network.
In this article, we will go over the exciting update in detail and look into all the important changes you can expect as a current StakeWise user on Gnosis Chain — including the migration steps necessary to move your staked GNO and access all the benefits that come with the new platform.
The Big Picture
StakeWise V3 is a wholly different system from the current iteration of StakeWise. To understand the scope of the upcoming changes, here’s a quick recap of the V3 system:
- At the heart of StakeWise V3 is a network of Vaults — staking pools that can be launched by individuals, communities, and companies to stake ETH and GNO on behalf of StakeWise users. No permission is required to launch Vaults, and users are free to choose which Vaults to stake into.
- Every Vault has its own set of validators created using deposits in the Vaults, as well as its own branding, fees, operators, approach to infrastructure, and MEV. Rewards and losses of validators in every Vault are isolated from other Vaults, allowing users to pick specific terms on which their ETH/GNO is staked.
- Stakers in Vaults can make their stake liquid by minting osETH (on Ethereum) and osGNO (on Gnosis Chain), the liquid staked tokens of StakeWise V3. osGNO stands for overcollateralized staked token because only up to 90% of the stake can be liquid with osGNO, while the whole stake serves as backing for it. For example, staking 100 GNO into a Vault will allow a user to mint at most 90 GNO worth of osGNO. User’s whole stake (including accrued rewards) can be unstaked in full once they burn osGNO.
- osGNO appreciates in value over time to reflect the accrual of staking rewards. It can always be redeemed for GNO staked in Vaults at the GNO value it represents. This means that osGNO can be bought on exchanges to be held for staking rewards, or sold to quickly exit from staking. In that, it is similar to DAI or LUSD. StakeWise DAO commission of 5% is automatically deducted from its rewards.
Summarizing V3, it introduces a permissionless network of staking pools, united by access to the same liquid staking token. It is a significant step forward from having a single staking pool in the previous version of StakeWise.
As a result of the upgrade, existing StakeWise users on Gnosis Chain must be aware of the changes to i) the staking process, ii) the tokenomics of staked GNO, iii) the fee structure, and iv) the ecosystem around staked GNO.
The staking process
To simplify the transition from the existing StakeWise Pool to an open marketplace of Vaults, the current StakeWise Pool will be one of the Vaults in StakeWise V3, codenamed “Genesis”. Upon transition, it will maintain the same operator set (Cryptomanufaktur, Finoa, StakeWise Labs); however, it will carry an increased commission — 15% of rewards for operators vs 10% before.
Every sGNO and rGNO token represents 1 GNO worth of stake in the Genesis Vault, meaning that users receive the amount of staked GNO that is equal to the balance of sGNO and rGNO tokens they have migrated (burned). Upon migration, users continue earning staking rewards as usual. The rewards are periodically autocompounded. By default, there is no token to represent the stake in the Genesis Vault, but users can optionally mint osGNO to make their stake liquid.
Actions required:
Migrate sGNO & rGNO tokens to StakeWise V3 in order to be placed in the Genesis Vault on Gnosis Chain and access StakeWise V3 functionality. See the migration guide below.
The migration
In order to benefit from the StakeWise V3 functionality and have their stake placed in the Genesis Vault, existing StakeWise users on Gnosis Chain are expected to migrate from the existing StakeWise Pool to StakeWise V3. Migration means burning sGNO & rGNO tokens in order to receive the corresponding amount of staked GNO in the Genesis Vault.
The migration process is very straightforward:
- Access the V3 app via https://app.stakewise.io
- Switch network from Ethereum to Gnosis Chain
- Connect the wallet that holds sGNO and/or rGNO tokens
- Press on the Migrate button at the top of the page
- Enter the amount of tokens you would like to migrate to the Genesis Vault
- Press Migrate and confirm the transaction in your wallet
That’s it! Once your transaction is finalized by the chain, your stake will have migrated to StakeWise V3.
Find the full instructions on how to migrate your stake here: https://docs.stakewise.io/guides/stakewise-v2/migrate-to-stakewise-v3-on-gnosis-chain
The tokenomics of staked GNO
This part of the StakeWise Pool underwent the most change. With the current version of StakeWise turning into a Vault, the sGNO and rGNO tokens are being phased out. Instead, a user’s stake in the Genesis Vault is not represented by any token and will not be transferable to other wallets, unless they mint osGNO to make their stake liquid (optional). However, even without a token users benefit from the autocompounding of staking rewards in the Genesis Vault and can unstake GNO at any time.
Actions required:
The transition to StakeWise V3 requires users to burn their sGNO and rGNO tokens in order to move their stake to the Genesis Vault. Once there, users don’t need to do anything else and will continue staking as usual.
There is ample time for migration, as sGNO and rGNO tokens will continue to exist after V3 is live; however, they will have no liquidity and DeFi utility going forward.
The fee structure
In StakeWise V2, all users paid a flat fee of 15% on the staking rewards. The fee was then split between the DAO and the node operators.
With the advent of StakeWise V3, users pay only the operator fee by default, known as the Vault Fee. It was increased to 15% in the Genesis Vault. A separate fee, known as the osGNO fee, is charged only once users mint osGNO to make their stake liquid. This fee is set to 5% of staking rewards of osGNO and goes to the StakeWise DAO.
The ecosystem around staked GNO
With the advent of StakeWise V3, sGNO and rGNO liquidity pools on Curve will lose relevance as both tokens are being phased out.
Instead, new pools involving osGNO and SWISE will be incentivized on across various DEXs in the coming days, helping StakeWise bootstrap some strong initial liquidity.
The StakeWise team will leverage liquidity in these pools to build a pipeline of DeFi integrations for osGNO, making sure that the token gets wide adoption as quickly as possible. We recommend that existing liquidity providers and users who have sGNO & rGNO locked in other protocols consider migrating to V3 as soon as possible to take advantage of all the new opportunities.
Actions required:
For a quick transition to StakeWise V3 and osGNO, current liquidity providers will want to remove their Curve LP positions to put sGNO and rGNO tokens back in their wallets ahead of burning them. All users will need to claim any rGNO they have accrued in the Merkle Distributor — this can be done on the Farms page. After that, stakers can burn sGNO and rGNO to fully migrate to V3. Those who want to provide liquidity for the new token and enjoy the benefits of liquid staking will then want to mint osGNO.
Closing remarks
A smooth transition for stakers is of paramount importance. Our energies are focused on ensuring that the migration process is as simple as possible. Formal step-by-step instructions for the migration can be found here to guide all users through the process.
We do not want our existing stakers to have any concerns regarding the transition to a new token model. This means that the team will be on hand throughout the entire period of the actual migration & following the V3 release to answer any questions.
A new era dawns for StakeWise — join the discussion about V3 now: https://discord.gg/StakeWise
