Asset Security and Risks

Asset security​

For enhanced SD Utility Pool asset security, the following measures are undertaken by Stader:

• Node Operators deposit to be used as collateral: Stader calculate the Health Factor for each node based on a collateral value, which is half of the Node Operator's ETH deposit (e.g., for a node with one validator, we will consider a collateral value of 2 ETH, even though the node operators deposits 4 ETH.)

• Liquidation Threshold: Additionally, we consider a liquidation threshold of 70%, i.e. the node will be liquidated if the utilization fees exceeds 70% of the collateral value. In case node operators attempt to exit without settling their utilized $SD, a portion of their ETH deposit will be locked until they clear their utilization fees.

External Audit​

SD Utility Pool has undergone a comprehensive audit and has been thoroughly evaluated for security and functionality by the highly renowned auditor SigmaPrime. Audit Report

Slashing Risks​

In the event of a slashing incident involving a Stader ETHx Permissioned Validator, the Node Operator is responsible for covering losses up to a maximum of 4 ETH per validator. Any additional losses above 4 ETH per validator will be covered by the SD Utility Pool's deposit. This means that if the slashing penalty is 4 ETH or less per validator, the Node Operator will bear the entire loss. However, if the slashing penalty exceeds 4 ETH per validator, the Node Operator will cover 4 ETH, and any amount above that will be covered by the SD Utility Pool.