Staking for Social Impact with Lido: Our Invitation to You

When I was first introduced to Ethereum seven years ago, I asked myself, ‘What if this grows like the internet to touch all aspects of humanity, like other general-purpose technologies have done before?’

I was tickled by the idea of a fixed pool of capital generating a return in perpetuity for doing the work of updating everyone’s copy of a shared database. It also represented an unprecedented opportunity for sharing those returns.

A good idea. How do we go about it?

When Launchnodes went live as a for-profit business, enabling solo staking on infrastructure owned by our clients not us, we started to point “the money pipe” –  that is, Ethereum staking returns to social impact – early. From 2021, we were buying tablets and software for refugee camps; then setting up a solo staking node for UNICEF to point staking returns at funding school connectivity, and in partnership with the Rwandan government.

As much as this is a story about my painful virtue signalling, it is also a story about having a simple-ish idea, and no idea how to implement it. We had to be very honest about our ignorance with rather big, scary partners who do important things. Major questions we had to answer included:

  • Who has custody of the Mnemonic and the withdrawal address?
  • How do we donate the staking returns?
  • What data do we capture with respect to the social impact?
  • How do we make that data public?

We answered these and other questions in partnership with the organisations we worked with, in an open spirit of knowing there were no established answers, and that we had to experiment. This is a good opportunity to say ‘Thank you’ to UNICEF, the government of Rwanda, GiveDirectly, who have been working in this space. In each case, the appetite for building innovative products should be acknowledged and applauded.

This is still experimental work that needs you, the reader, to contribute and build on. This is me inviting you to participate.

Use staking returns to fund social Impact: Introducing Lido Impact Staking (LIS)

Lido Impact Staking (LIS) is allowing someone with 0.1 ETH or 1500 ETH to donate a proportion of their staking returns to support social impact for a set time period, and then get their capital/principle back. 

We are going to build this application in Lido so that everyone using Lido can become an impact staker and support the organisations I have named, and others who are funding social impact in data rich contexts that want to join. For more about the implementation, here is the proposal that the Lido DAO approved and funded in the summer 2023.

In addition to building and operating LIS, Launchnodes will be donating 10% of our profits as a Lido Node operator to organisations working in impact staking.

LIS will become an important interface between Ethereum staking and the real world, solving long term funding problems in a new way. LIS is, I think, the first application on Lido, but I do not think it will be the last. 

To integrate impact staking into Lido is a compelling opportunity. To some Lido remains controversial because of its success: the ease it offers in its UI to those who wish to stake any amount of Ethereum and how that potentially threatens Ethereum’s decentralisation. It also has tooling and new models for information management that are incredibly innovative and self organising and today are only three years old. And constitute “crazy crypto” patterns of getting super complex stuff done. 

Google was deemed a crazy, whacky business model in the early 2000s. In three years time, Lido patterns will be taught at Harvard Business School and at Stanford.      

Happy staking!

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