An Introduction to Impact Staking

Hello Solo Stakers

Launchnodes was founded in April 2020. In part, because the founding team thought it would be a great way to earn some jake (English slang for money), but also because I saw that staking could be a revolutionary tool to:

  1. Create local and interest group-based banks (so think Basingstoke Bank, or the Bakers’ bank).
  2. Provide long-term financing for solutions in climate change, inequality reduction and building new infrastructure.

The idea of a bank that does not need a strategy and lots of Oxbridge grads or Imperial quants to make lending and trading decisions, but rather simply takes deposits and uses those deposits to stake Ethereum opens the door for a new open source style of bank that I hope we will help build in the future.

A tool for fighting climate change, building new infrastructure and reducing inequality

Staking generates an income in perpetuity from a fixed pool of capital for doing the work of updating everyone’s copy of the shared database that is Ethereum, and for doing the work of securing the Ethereum network. 

We think this new work and the perpetual income stream that comes from it, could be used for directly funding social impact outcomes. The dual benefit being that the money is generated in perpetuity and at the end of a given period of time, the money that was staked can be given back to the donor – because only the staking returns were given, not the principal. The organisation receiving the staking returns only gets the money based on automated data being pushed back confirming the social impact outcome is being delivered. 

The first use of staking returns to fund social impact was with Save The Children and involved providing tablets for refugee camps using staking returns that Launchnodes provided the liquidity for.

More recently we were the implementation partner with UNICEF, the Ethereum Foundation and the Rwandan Government, a 2-minute video explaining the work is here.

The opportunity to use this tool more broadly and the ideas and concepts we have tried to outline in the Impact Staking section of our website.


Coinbase and Lido, We Need You!

We want businesses and people to become solo stakers. We also think of staking as a service, and liquid staking providers have as much a role to play in staking and Impact Staking as we do, if not more so because they are massive in comparison.

Things We Know

  • Staking is a new way to create money to solve big problems
  • Impact Stakers can hedge all or some of the principal they stake, as well as the staking returns if they want to. 
  • Stakers are in total control of their money and have custody of it all of the time.
  • Stakers have to be able to choose autonomously the outcomes they want to fund.
  • The first use cases/experiments for each outcome are defined and have partners. “Start small and go fast”
  • To do this requires Impact Stakers who are willing to announce they are up for trying the model out and launching the Github repo/wikipedia page. 
  • We need a compelling narrative, not a website
  • Prosaic numbers take precedence over grand vision. Having both is ideal
  • Some of the frameworks and outcomes that get funded won’t be successful in driving the impact that stakers want. 
  • Failure that is rich in data is okay.
  • New outcomes as well as new frameworks, experiments and tooling should be actively encouraged.

Things We Do Not Know

  • Many more things than we do know.
  • What legal contract will bind an Impact Staker to an outcome provider for their staked returns, both financially and in the context of the impact delivered? 
  • What is the time frame that Impact Stakers will want to commit to?
  • How much do you need frameworks and a collective data-sharing model, rather than just the new money from staking?
  • Who would be interested in doing this?
  • Is $5 billion too small an amount to start modelling with?
  • Does an entity need to be set up to protect all the data and IP that comes out of the outcomes being paid for by staking returns?
  • Political risks/Externalities?
  • Of the group of potential Impact Stakers, who will be most interested in building out data solutions that will allow them to receive funding through staking?

Get Involved! Join Us

If you are interested in this space as a human, NGO, Donor or government. Sign up to our webinar with different folks in the staking ecosystem, multi-laterals and other NGOs and help plant a thousand seeds/experiments, so we can start learning to use the tool that is staking to make a real world difference.

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