Call-off contracts for Ether that are set to Ethereum 2.0 could already be available in the first quarter of 2021, so that the decentralized Eth2 stakeout service Rocket Pool can be started.
While phase 0 of the introduction of Eth2 started on December 1st with the beacon chain, the 900,000 ethers deposited by the stakers can only be withdrawn in phase 1.5, which is expected to arrive in early 2022.
Last week, Ethereum developer Danny Ryan presented a new proposal that “allows simple (but expressive) redemption agreements to be written today”.
Should the proposal be implemented, he estimates that “80% of the use cases of cancellation agreements will be met,” but admitted that the solution will not unlock full functionality:
“There may be more complex functionality that the simple scheme cannot create until beacon chain reads are implemented. However, I would argue that most designs can be done.”
Unfortunately, the new contracts will not allow withdrawals per se, but they will allow the stake pools to initiate withdrawals in the future.
Rocket Pool is an Australia-based decentralized stakeout platform that enables hodlers with less than the mandatory 32 ETH to pool their stakeout equipment. In a blog post today, it was pointed out that the platform is waiting for smart contract withdrawals to be activated before going live.
Founder David Rugendyke stated that since withdrawals are not currently supported in Eth2, “projects to democratize deployment in the current environment must employ a central administrator to control the withdrawal keys for validators.”
He added that the associated trust issues “are not worth sacrificing our core values and risking user deposits.” Rugendyke called Ryan’s proposed solution “a fantastic move” and something “we want to show massive support for!” He explained in an email to Cointelegraph:
Withdrawals themselves will most likely not be available for 18 months. However, what will hopefully be activated soon is the ability to provide an ETH1 Smart contract address that can receive this withdrawal in more than 18 months In the first quarter of a year, we simply provide a withdrawal address which is a smart contract. This would allow for trustless stakeout that we’d like to use in the first place. “
Blockchain firm Consensys has determined that Ryan is not the only possible solution. Jeff Coleman’s proposal “Dirt Simple Withdrawal Contract” by Ethereum developer also offers a solution for withdrawals. Ethereum Stakeout Service Attestant’s co-founder Jim McDonald’s has another proposal called “Easy Transfer of Excess Funds”.
In the meantime, there are various stop-gap measures until withdrawals are activated. Investment firm LiquidStake has taken a different approach, allowing those involved to take out a USDC loan for their staked ETH to offer users better liquidity. Coinbase has also announced support for the deployment of Eth2, however they will provide the liquidity for users:
“While set Eth2 tokens remain locked in the beacon chain, Coinbase will also enable trading between Eth2, ETH and all other supported currencies that provide liquidity to our customers.”
In the past, Ethereum co-founder Vitalik Buterin warned users of the risks associated with using third-party stakeout services.
This story has been updated with comments from Rugendyke indicating that withdrawals will not be available for 18 months, but that the new contracts will allow Rocket Pool to start deploying.