Shortly after the merge (Sept 15, 2022), it was highlighted that Lido and Coinbase had produced just under 50% of a random sampling of 1,000 blocks. This is the result of excess concentration among ETH liquid staking derivatives (or Liquit Staking Tokens — LSTs). Not ideal for any decentralized protocol.
It’s not Lido nor Coinbase’s fault. They provide great products and due to a significant first-mover advantage, they now enjoy market dominance. This issue is the result of uneven distribution of use cases, liquidity, integrations, etc. But we believe that by taking action now, we as a community can solve the LST centralization problem and improve the long-term health of Ethereum. DeFi succeeds when Ethereum succeeds.
That’s why we’re excited to introduce Gravita. Gravita is an ETH-centric borrowing protocol focused on fueling decentralization for Ethereum.
Inspired by Liquity, Gravita will allow holders of ETH and ETH liquid staking derivatives (e.g. rETH, stETH) to borrow a stable coin-like asset, GRAI, in an interest-free and capital efficient manner. We believe that by providing shared access to leverage and liquidity across liquid staking derivatives that we can reduce centralization risk for Ethereum in this post-merge environment.
Our goal with Gravita is to reduce concentration amongst Ethereum LSTs by acting as a growth catalyst for minority projects in this vertical. Not because we think some LST solutions are better than others (Gravita is neutral), but because we believe that maximizing decentralization is an important goal for Ethereum.
Our v1 application is a DeFi lending platform with features designed to increase the growth of LSTs and give utility to the holders of those tokens. Users will be able to borrow GRAI interest-free against wETH, rETH and others.
In v1, users can look forward to:
- Zero interest borrowing against wETH and liquid staking derivatives
- Multi-collateral: wETH, rETH with additional collateral types over time
- Efficient liquidations managed by a single stability pool for all collateral assets
- A friendly relationship with Liquity for all they’ve done to inspire Gravita
- Gravita DAO, to focus on Gravita’s evolution
- plus a few other secrets that we’ll reveal at a later date
Our v2 application will utilize v1 core functionality to create tailored investment vaults for LSTs, with the goal of becoming DeFi’s home for LSTs — more on this to come.
So What’s Next?
For now, we’re heads down building Gravita. We wanted to introduce ourselves and our mission and let everyone know we’re hard at work. We applaud the incredible engineering efforts required to make The Merge a reality and we look forward to playing our part to increase Ethereum’s decentralization post-merge.
To keep up with future updates, follow us on Twitter. See you all soon!