Stakescription: Automatically use staking rewards for recurring payments

🔬New Middleware R&D
1

Hey there,

I’m super interested in what EigenLayer is up to and have been spending the past week understanding it deeper. An interesting idea popped up, thought I’d share it here to get feedback before exploring building it out:

What?
A protocol that enables users to automatically make recurring payments directly from the rewards they collect on re-staking. Imagine purchasing subscriptions to X, Netflix, Patreon, other new web3 services, simply from the staking rewards you earn.

Why?

  1. For consumers:
  • re-staking rewards may be volatile. Allocating some % to usable subscriptions can capture value immediately, to balance out the risk of holding the token.
  1. For apps:
  • psychologically, users view spending staking rewards differently from existing cash because they are committing “found money”. the mental math that the user does when committing to a long-term subscription is fundamentally different.
  • could reduce barrier to entry for customer acquisition.

Web2 prevents users from automating spend from passive income like dividends, mutual funds, etc. This is unlocked in web3 because of composability but also because the epoch of rewards being paid out is much less.

How?

  • The protocol connects to a user’s wallet and understands its re-staking profile.
  • Allows a registry of apps to accept stakescription payments
  • For every given active subscription per user, the system converts staking rewards over an epoch algorithmically so that there is just the right amount by the time payment is due.
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2

Sounds like a cool idea. Are rewards then converted to stables? And how are you covering gas fees for those stables? The gas fees might end being way higher than any actual subscription fees if you’re doing individual swaps obviously, so are you batching instead?

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