What is Diversified Staked ETH Index ($dsETH) Token?
Diversified Staked ETH Index ($dsETH) is an index token of leading Ethereum liquid staking tokens. dsETH holders earn staking returns by making liquid staking protocols more efficient and decentralized.
How does dsETH Work?
dsETH includes various liquid staking tokens with inclusion criteria and weightings that support decentralized liquid staking protocols. These tokens must meet certain criteria, including security, transparency and liquidity. Two factors are considered before assigning equal weights: the number of node operators supporting the protocol and the distribution of the share among these node operators.
Investment and Instruments
As of January 27, 2023, you can get 1 share of dsETH tokens for $1588.32 with a 0.25% management fee. With these tokens, you can use your idle Ethereum to generate passive income and interest earnings. Products and instruments available for investment include stETH2, wstETH, rETH.
Fundamentals of the Diversified Staking ETH Index
dsETH is the first officially launched index token of Index Protocol, a fork of Set Protocol v2. Its underlying infrastructure is battle-tested and subject to the same audit coverage for security as other Index Coop products such as $DPI, $MVI and $BED. At launch, dsETH will consist of rETH (Rocket Pool), bundled stETH (Lido) and sETH2 (StakeWise). For dsETH to be a "repricing" token, its components must also be "repricing". That is, staking and application layer rewards should accrue to the net asset value of the liquid staking token, and the token should gradually appreciate in price relative to ETH over time.
Advantages of dsETH
1. Diversification: The variety of liquid staking tokens in dsETH reduces risks and helps stabilize overall returns.
2. Ease of Use: dsETH can be easily purchased on decentralized exchanges, offering users a simple way to generate passive income.
3. Decentralization Promotion: dsETH promotes decentralization and increases the number of node operators by supporting liquid staking protocols.
dsETH Methodology
dsETH's methodology aims to provide diversified exposure to decentralized liquid staking protocols, measured by the number and share distribution of node operators. The components are weighted equally before adding a Node Operator Factor that benefits staking protocols with active node operators. The HHI Factor measures share concentration and competition.
As a result
dsETH is an easy-to-use and decentralization-promoting index token that simplifies access to diversified Ethereum staking rewards. By diversifying into liquid staking tokens, users can generate passive income and get more out of their Ethereum.
