Codefi, the blockchain-powered commerce and finance arm of global blockchain company Consensys, has announced the launch of the Early Adopter program for its new Ethereum 2.0 staking-as-a-service platform.
ConsenSys AG, which is headquartered in “Crypto Valley” (Zug, Switzerland), was founded in October 2014 by Andrew Keys — who is now Managing Partner at Digital Asset Risk Management Advisors (DARMA Capital) — and Joseph Lubin, who is a co-founder of Ethereum and the current CEO of the Consensys.
On 15 September 2019, according to Coindesk, Lubin announced during a press conference at at Ethereal Tel Aviv that Consensys would be entering the DeFi ecosystem with a new product suite called Codefi.
The following day, Lex Sokolin, who — alongside Patrick Berarducci — co-leads Codefi published an article on LinkedIn to explain “why ConsenSys Codefi is the bridge to blockchain-based manufacturing for commerce and finance.”
This is how Sokolin introduced Codefi:
“Codefi is the blockchain operating system for commerce and finance, built to optimize business processes and digitize assets and financial instruments. We are combining elements of enterprise finance blockchain, digital assets and tokenized securities, crypto payments processing, and the emerging frontier of decentralized finance to build a global software enabler for the new financial infrastructure. Think Twilio, for blockchain-based finance.”
He went on to say:
“The product is structured like an API-first enabler, like Twilio or Stripe, with options for private label UI/UX or bespoke build if needed. It incorporates digital assets, blockchain payments, public networks and DeFi, and dynamic analytics as the initial modules.”
Yesterday (June 16), Cosensys published a press release on its blog to announce that it had launched a pilot program for Ethereum 2.0 staking, and that Binance, Crypto.com, DARMA Capital, Huobi Wallet, Matrixport, and Trustology are the first companies to join this program.
Consensys Codefi says that its Ethereum 2.0 staking-as-a-service platform offers “institutional functionality for exchanges, custodians, funds, wallets and other potential customers.”
The aim of this Pilot Program (or “Early Adopter Program”) was “designed to incorporate feedback and feature requests while designing and building the Codefi Staking API ahead of the Ethereum 2.0 launch.” The idea is that “through the completion of the pilot program, partners gain a deeper understanding of Ethereum 2.0 and have the opportunity to be first to market in providing their customers with Ethereum 2.0 staking capabilities.”
Codefi Staking was built using PegaSys Teku, which is “an Ethereum 2.0 client for institutional staking” built by “the team behind Hyperledger Besu, one of the most widely-adopted enterprise clients with 130k downloads.”
Consensys assures us that Codefi Staking will also support “other Eth2 clients to maintain flexibility and 99% uptime for validators, as the development phases of Eth2 further develop.”
Vitalik Buterin, the author of the original Ethereum white paper (published in 2013), had this to say to Coindesk on May 12 about the expected date for the launch of phase 0 of Ethereum 2.0, the phase in which the Beacon Chain — the cornerstore of ETH 2.0’s Proof-of-Stake (PoS) system — goes live:
“My actual stance is that eth2 is ‘on track’ in that there aren’t any unexpected bumps in the road, testnets are coming along, etc, but I defer to the client devs on timelines and if they are now saying ‘Q3’ more broadly then I believe them.”
Ethereum 2.0’s PoS architecture relies on a network of validators (a minimum of 16,384 validators have to be there before ETH 2.0 can launch), each of which must “effectively place a security deposit of 32 ETH in special accounts on the network, as a guarantee they will follow and enforce the network rules.”
Unfortuately, for a private individual, becoming a validator can be both unaffordable, complex, and risky. Tim Lowe, Product Lead of Codefi Staking, had this to say:
“Some of the risks associated with running your own validator include theft or loss of withdrawal keys, incorrect transfer of funds to the Eth 2 deposit contract, and not to mention hardware or internet connectivity failures which result in a loss of validator rewards.
“With ConsenSys Codefi, validator keys are held in a secure vault with online signing capability, and there will be multiple layers of gatekeepers validating transactions preventing unauthorized usage.
“We know the importance of onboarding as many validators to Ethereum 2.0, and for that reason have built a turnkey solution for enabling large exchanges and institutional crypto funds to have an always-on and dependable access point to stake the ETH they hold for their customers.”
One of the first exchanges to become an Early Adopter of Codefi Staking is Binance, the co-founder and CEO of which stated:
“With staking on Binance, users can receive staking rewards without needing to set up nodes, or worrying about minimum staking amounts, time lengths, or any catches. Users deserve the rewards that their coins can earn them.
“With the eventual launch of Ethereum 2.0, we are excited to support staking for all of our ETH holders on Binance.”