Faro is a liquid staking protocol for decentralized, layer-2 zk-rollups.
Check out our BUIDL: https://dorahacks.io/buidl/3516
Value Added
ZK-Rollups (zkEVMs) will eventually decentralize their sequencers/provers, and implement a consensus mechanism that enables staking. Faro is building a liquid staking protocol targeting users who don’t meet the minimum staking requirements or heavy hardware requirements required to stake on these rollups, with the additional flexibility of providing immediate liquidity in the form of a staking derivative token. Faro will enable users to stake on Layer-2s (rather than alternative Layer-1s) for the first time and allow them to secure the networks security in a capital efficient manner.
Layer-2 networks decentralizing over the coming year will unlock a foreseeable revenue model for the community in the form of staking rewards: Faro’s staking pool initially applies a 10% service fee (as a percentage of the total rewards from a user’s staked principle) by minting a proportional amount of a derivative token (associated with that ZK-Rollup). This fee is evenly split between the node operators (who run the staking services) that we’re partnering with and our DAOs treasury. Long-term growth is contingent on (1) growing initial market share in the L2 sataking space by being amongst the first liquid staking pools to launch, and (2) partnering with more established staking providers.
As Layer-2s grow in adoption and the TVL and user-activity moves from alternative L1s to these zk-rollups, early adopters in the community of liquid staking protocols such as ours will be compensated nicely in the form of initially high APRs on these staking networks.
Funding
We are requesting a $100K commercial grant split in the following way:
i. Upfront ($30k)
The initial 30k fund will be used to kickstart the project and fund our initial operating costs, including: a professional development environment, our website’s domain name and frontend design, lawyer fees associated with setting up the legal BVI / Singapore legal entities and preparing for fundraising rounds, and the legal entities themselves.
- $10k - Domain name (website / frontend)
- $10k - Professional development environment
- $5k - BVI (British Virgin Island) Entity
- $5k - Singapore Entity
ii. Milestone 1 ($40k)
We’re targeting our first milestone to be complete in an estimated 5-6 months. Achieving the first milestone is firstly dependent on waiting on the ZK L2s to publicly release a specification sheet / implementation of their staking smart contracts. The first milestone will mark the launch of our minimal viable project (MVP) and first beta testnet for the community to interact with.
- Launch MVP
- 1st beta testnet
iii. Milestone 2 ($30k)
We’re targeting our second milestone to be complete around 3-6 months after our first milestone. This timeline is out of our control, as we’ll be waiting for the ZK L2s to decentralize their entire stack (i.e. sequencers, provers, and consensus mechanism). By the end of the second milestone, we’ll be performing multiple independent smart contract audits after the permissioned testnets are made available. Additionally, we’ll start our marketing campaigns around the time the MVP launches, which will incur additional costs. We’ll also be opening sourcing the codebase in preparation for the mainnet launch alongside the decentralization of these zkEVMs. This will be funded from the funds secured ($40k) after the completion of the first milestone.
- 2nd beta testnet
- Open-source the codebase
- $20k - Legal expenses
- $15k - Smart contract auditing
- $5k - Marketing: KOL, media, community management
The last funding (after reaching milestone 2) will be used for additional expenses incurred by marketing and lawyer fees before mainnet launch.
- $20k - Lawyer Fees
- $10k - Marketing: KOL, media, community management
Between milestones 1 and 2, we will also extend early access invitations to the DoraHacks community.
Marketing
- Twitter Spaces (AMAs)
- Medium article on staking/liquid staking on ZK L2s