T-Mobile’s sister company, T-Systems MMS, partners with the StakeWise staking pool to expand its footprint in the Ethereum ecosystem.
The partnership will combine staked ETH into validator nodes to allow participants with less than 32 ETH to reap staking rewards.
“Staked Ether tokens remain available to the owner in this construct – liquid – and can be used in other Decentralized Finance (DeFi) applications,” said Dirk Röder, blockchain solution lead at T-Systems MMS.
Liquid staking pools are a hot topic in the Ethereum space, as they allow investors to pool their ETH in exchange for staked ETH tokens. Staked ETH can be used as collateral for borrowing on decentralized lending applications like Aave.
Ethereum developers recently changed the Ethereum blockchain’s consensus model to proof-of-stake. An algorithm chooses a validator to verify transactions based on the number of ETH they have locked up or “staked” on the network. Before the change, known widely as “The Merge,” the developer team launched the Beacon Chain, a blockchain layer that allowed would-be validators to stake ETH in preparation for the Merge. Many popular staking pools like Lido and Rocket Pool soon followed.
T-Systems expands validator and staking participation
In addition to using StakeWise to create validator nodes, T-Systems MMS also participates in the government of the StakeWise decentralized autonomous organization (DAO). The DAO determines, amongst other things, the transaction fees StakeWise charges.
“After collaborating with Flow, Celo, and Polkadot, we are now taking the next decisive step in the blockchain world and are doing pioneering work here with Ethereum. As a node operator, our entry into liquid staking and the close collaboration with a DAO is a novelty for Deutsche Telekom”, notes Röder.
Instead of issuing staked ETH, StakeWise mints Deposit and Reward Tokens for every ETH deposited and earned as interest. The tokens can be used in decentralized applications 1inch Network and Uniswap.
T-Systems MMS hopes that its partnership with StakeWise contributes to the security and visibility of the Ethereum network.
T-Mobile U.S., a sister company of T-Systems MMS, recently announced a partnership with Nova Labs. The partnership will provide subscribers to Helium Mobile, the first decentralized 5G network, with additional cellular coverage in the U.S. Nova Labs will launch a beta version of Helium Mobile in Q1 2023.
Validator nodes are complex
Building out validator nodes requires substantial engineering expertise and increases a company’s risk of monopolizing the validator network. Jump Crypto, an arm of quant trading firm Jump Trading, recently committed to building a Solana validator node with a 100-strong engineering team.
Companies operating staking pools also rake in tidy transaction fees for ETH deposits. Lido was charging $1.88 per deposit at press time.