Nexus Network
Introduction
The rollup-centric roadmap of Ethereum is resulting in the advent of both general purpose and application specific rollups. The rollups use ETH as gas fees and a critical component of economics resulting in the locking of ETH in the native rollup bridges. As of today, 2.1 Mn+ ETH (USD 4.4 Bn+ in value) is locked in these bridge contracts and the number is only expected to rise going forward.
The Problem
A large supply of ETH is locked in the bridge contracts for rollups. This ETH is not being used for staking which is the central pillar of PoS Ethereum architecture. Staking ETH is the safest way to deploy assets and results in real, sustainable returns while securing the Ethereum network. This can become a big challenge for Ethereum security as more and more ETH gets locked in the rollup bridges
Key Stakeholders Affected
Ethereum network
Ethereum requires a large, active, and reliable validator set to ensure the security of the network. Locking of ETH in Layer 2 bridges can become a significant drag on the security of the network. The network is also facing a challenge of node operator centralisation, from both centralized staking pools run by large exchanges and large liquid staking products with centralized node operators.
Layer 2s
Layer 2s do not have an inherent revenue model to bootstrap their operations and rely on funding/governance tokens. This can lead to challenges for the long-term sustainability of the rollup. Revenue from charging transaction fees on the Layer 2 is expected to decrease over time as the rollup market becomes more competitive with the launch of new optimistic and zk-rollups
The Product
Nexus Network: “Economic Layer for Rollups”
Nexus Network envisions becoming the economic layer for rollups. Using our pluggable staking infrastructure, rollups can earn revenue from the idle assets locked in the bridge contract on Layer 1. Rollups can stake the ETH locked in their bridges within minutes and earn a continuous stream of stable staking returns. Nexus Network leverages Distributed Validator Technology (DVT) and Distributed Key Generation (DKG) for staking. DVT minimizes validator centralization and slashing risks and DKG ensures no single entity owns the complete validator key, hence enhancing security.
Nexus Network has started working with ETH but also has a similar solution ready for DAI that can leverage the sDAi contract by Maker DAO to earn stable yields.
The solution is completely non-custodial with Nexus Network never getting access to rollup ETH or DAI. Other important features include -
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Pluggable staking infrastructure - Rollups can integrate with Nexus Network by making small changes in their bridge contract
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Customisable staking limits - Rollups can stake anywhere between 0-100% of ETH locked in their bridge to Nexus Network which can be changed in one smart contract call
3, One stop validator management - Nexus Network takes care of validator selection and monitoring and does not put any additional responsibility on the rollup team
Here is our DoraHacks build submission complete with a demo: https://dorahacks.io/buidl/5406
Team
Nexus Network’s team is experienced in the Web3 space having a combined experience of 7+ years. staking having worked on liquid staking products for the past 2 years.
The team has won several hackathons in 2023 -
- ETHBogota 2022 : Winners of SSV Network prizes
- Scaling Ethereum 2023: Winners of Optimism track
- ETHOnline 2023 : Winners of Polygon’s zkEVM track
- ETH Istanbul 2023 : Winner of Spark Protocol track
The team members are
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Rohit Aggarwal, Full stack engineer with 5 years of development experience, previously EVM development lead at pSTAKE Finance, and has developed liquid staking products for Ethereum and BNB chain.
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Mayank Raj, Product manager with 3 years of experience, previously EVM product lead at pSTAKE Finance, led the development of liquid staking products for Ethereum and BNB chain.
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Ashish Gupta, Business development & operations, one year of web3 experience and 4 years of Web2 experience in Management Consulting, scaled a 0 to 1 live commerce startup from 0 to 10 Mn users.
Project Plan
| # | Milestone | Deliverables | Est. Effort |
|---|---|---|---|
| 1 | Upfront | - We have already developed a MVP version of the product while being bootstrapped. Please review our build submission here - For the next phase of development we need to hire full stack devs |
- |
| 2 | Testnet Deployment |
Finalization of product mechanism - Withdrawals -Deployment of Nexus Network components - Contracts - Off chain bots - Oracles - Deployment of a Layer 2 using the Optimism stack on Testnet - Smart contract development - Off-chain components development - DAO contract that will staking receive rewards - DVT integration |
6 weeks |
Grant Ask
USD 50,000
Grant Usage
Two major areas of spend are:
- Hiring Devs : In order to reach mainnet fast we need to hire 2 full stack devs
- Audit : Smart contract audits are crucial requirement before mainnet
Milestone Allocation
| Milestone | Amount | Percentage |
|---|---|---|
| Upfront (For hiring Devs) | $ 25,000 | 50% |
| Testnet Deployment | $ 25,000 | 50% |
| Total | _ $ 50,000 _ | _ 100% _ |
Open Source
The pluggable solution for rollups will be open-sourced under an MIT license.
This includes GitHub smart contract code for the solution