Staking Ethereum: Improving stability and community-driven expansion of the VIDT DAO Ecosystem

As Web3 (and the innovations it brings forward) is the future of technology, we as VIDT DAO community members are all part of this exciting adventure. In order to ensure the survival of the ecosystem, the blockchain is protected and secured by nodes. Therefore, these nodes are one of the most important parts of the whole industry and should be cherished and expanded upon.

VIDT DAO, as the name implies, is a decentral community, wanting to grow the VIDT timestamping ecosystem. As with the overarching Ethereum blockchain ecosystem, our DAO also depends on the security of a system of nodes. In order to maintain and enhance the stability of this network, we are proposing to set up our very own VIDT DAO ETH validator node.

What’s a node?

An Ethereum node is like a worker bee in the Ethereum blockchain hive. It's a computer that stores all the data about the Ethereum network, including transactions and 'smart contracts'. When you run a node, your computer talks to other nodes to keep this data updated and confirm transactions are legitimate. It's like having a copy of a massive ledger that's constantly being updated, and your computer helps keep everything in sync.

To protect the network from malicious nodes, “staking” as a protective measure was introduced. Staking is the act of depositing 32 ETH to activate validator software. As a validator we will be responsible for storing data, processing transactions, and adding new blocks to the blockchain. This will keep Ethereum secure for everyone and it will earn us new ETH in the process as a reward for protecting the network. In the future, if VIDT DAO were to expand, it can be expanded to run multiple nodes or run nodes for other blockchains.

We believe this will enable the VIDT DAO to become even more intertwined in the decentral and Web3 technology. Essentially embodying ‘’Eat your own dog food’’, we thrive to become one of the protectors of the technology we’ve come to love over the years as the Ethereum ecosystem is the foundation for the VIDT DAO ecosystem.

Keeping a stake in the VIDT DAO ecosystem

The Ethereum validator node staking rewards are used to maintain the node and even grow the stake if needed in the future. Also, it could be used to buy VIDT DAO back from the market. This way, the node not only helps maintain the health of the Ethereum network, but also the VIDT token market.

As an incentive for the node to be as effective as possible for both ETH and the VIDT community, the VIDT tokens that are bought will be held. This principle will create a common interest for both the node as the overall VIDT community.

In short:

The more successful the VIDT DAO ecosystem is, the more valuable the node becomes.

As the node-generated rewards come in, the VIDT DAO token position grows, proving the above-mentioned vision to be viable more and more over time.

Additional benefits

Naturally, there’s more to it than described above. Additional core benefits of creating VIDT DAO’s Ethereum node are as follows:

1. Increased stability of the ecosystem. By 'holding' or 'staking' digital assets, the node strengthens the system's overall security and stability. Over time, as the node continues to operate, this protective effect becomes bigger and bigger, fortifying the strength of the ecosystem.

It's an ongoing process which could be compared with trying to reinforce a building structure - the longer the reinforcement is in place, the more robust and unshakeable the building becomes. In this scenario, the building is the digital ecosystem, its stability and reliability increases with the continuous operation of the node.

2. Attracting new integrators. Both new and existing VIDT DAO integrators would be able to use the VIDT DAO node for development purposes. Currently, in order to for example perform on-chain transactions, one would have to implement some kind of API that uses an ETH node to be able to execute your functionality. This includes the VIDT DAO smart contract.

When the VIDT DAO node is set up, integrators will not have to integrate with costly third parties anymore because they will have access to the VIDT DAO ETH node. This will save expenses that in turn can be used to grow the VIDT DAO ecosystem.

This seems like a small problem, but it offers something that is very important for the growth of the ecosystem; the total package. By offering all the tools that a potential integrator would need, you eliminate any obstacles and give them all the opportunities they need to start their development.

3. Additional buying power. We’ve mentioned acquiring VIDT with the staking rewards. This would also mean that the node will introduce additional buying power in the market. As the rewards are used to buy VIDT and these tokens will be held in a wallet on the Node, the scarcity will increase.

4. Protecting the purity of VIDT DAO’s decentralized nature. We protect the very ecosystem VIDT DAO lives in, being a protective pillar directly benefits every community member; VIDT DAO wouldn’t exist without it. The node ensures the decentral nature of the Ethereum blockchain and thus VIDT DAO’s decentral nature. We want to be a part of protecting this.

Reports

Being transparent about the node and its results is an important component of the success of this proposal. As such, easy to read reports will be created to keep the community informed about the status of the node and its ETH and VIDT positions.

The proposal

Due to the fluctuations of the markets it is important to include some flexibility in the grant request. Therefore, we are asking for a grant of 4.6 million VIDT DAO tokens.

With this grant, we aim to:

• Acquire and maintain the hardware and software needed to run the node. This is essentially a specialized computer that has the hardware needed to efficiently run a Validator Node. There are requirements set by the Ethereum foundation in order to maintain a healthy node and thus a healthy network. As we won’t have to reinvent the wheel, hardware will be acquired by endorsed retailers.

• Establish the right tooling for integrators to integrate the node. This includes security and a way to register as an integrator wanting to implement the node into their system. The integrity of the node is the priority here, and as such this will require us to properly implement this.

• Buy the ETH to stake in order to receive rewards. As the validator node needs 32 ETH for its stake, we will use the funds to acquire the tokens.

• Create status reports of the node and its positions. These reports will allow us to effectively and transparently communicate with the community about the status of the node and its holdings.

• Provide a starting position of VIDT on the Node, already creating the incentives mentioned above. And last but not least, the rest of the VIDT will be held in a wallet to start the VIDT position as described earlier in the proposal.