The benchmark rate is set to empower DeFi developers and institutions to create new financial products.
Key Takeaways
- RedStone introduces the Composite Ether Staking Rate for Ethereum staking yields.
- The benchmark captures all relevant rewards for validators and accounts for deposits, withdrawals, and penalties, offering a holistic view of staking yields.
RedStone, a modular blockchain oracle provider, has launched the Composite Ether Staking Rate (CESR), the first on-chain benchmark for Ethereum staking yields, as announced by the company today.
Ethereum staking yields refer to the rewards earned by participants who lock up (stake) their ETH tokens to help secure the Ethereum network. With the CESR, RedStone aims to standardize the measurement of annualized staking yields across the Ethereum validator population.
The team said that the CESR is designed to provide a reliable and transparent metric for developers, market participants, and institutional players interested in creating innovative Ethereum yield derivative products.
The new benchmark will also serve as a settlement quote for derivative contracts. This means that it will factor in all validator rewards, deposits, withdrawals, and slashing penalties. Users will have a comprehensive look at the true dynamics of the Ethereum staking environment.
RedStone said it has analyzed CESR data to identify trends in staking yields over time. Based on the analysis, it found a decline in staking yields due to increased participation and the transformative impact of liquid staking and restaking on the market.
The team expects CESR to empower DeFi developers and institutions to create new financial products such as loans, bonds, and derivatives based on Ethereum staking yields.