0xMaki Proposes Ordinals-Inspired 'Heroglyphs' To Incentivize Solo Stakers

0xMaki, a SushiSwap co-founder and core contributor, unveiled Heroglyphs, a forthcoming project that aims to incentivize and reward solo validators.

Heroglyphs seeks to encourage the proliferation of node operators by transforming produced as a byproduct of validating transactions into economically valuable on-chain activity.

The project seeks to offset the centralization impact of liquid staking, which it says has reduced the technical barriers to users participating in Ethereum staking at the expense of consolidating the network’s validator ecosystem within a small pool of specialized node providers.

“Liquid staking bifurcates the security of the Ethereum network between purely economic contributors, who supply ETH token, and validation contributors, who operate nodes,” Heroglyphs said. “We propose a set of frameworks and tools for refining the waste byproducts of Ethereum transaction validation into an increasingly valuable and specialized set of on-chain operations.”

The launch of Heroglyphs follows long-term discussions surrounding how to better incentivize solo staking, which bolsters the decentralization of Ethereum’s consensus layer.

Last year, Justin Drake, a researcher at the Ethereum Foundation, tipped that efforts were underway to identify the wallets of solo stakers in a bid to reward them with “special airdrops.” Several projects have since included allocations for solo validators when airdropping tokens to users and ecosystem participants, including drops from Starknet and Omni in 2024.

The rise of liquid staking also elevated concerns about the decentralization of Ethereum validators, with Lido alarmingly controlling more than 32% of staked Ether for much of the past year. However, Lido’s market share currently sits at 28.6% after the emergence of liquid restaking began enticing users away from liquid staking protocols.

As of this writing, Lido, Coinbase, Binance, EtherFi, and Kiln collectively control more than half of staked Ether’s supply, according to Dune Analytics.

Graffiti

The Heroglyphs protocol seeks to leverage “Graffiti,” which it describes as small pieces of arbitrary data validators can include in proposed blocks.

The protocol spans an “encoder” and “translator,” with the encoder serving to densely embed information within transaction Graffiti. The translator can then transform Graffiti into various on-chain operations, including the creation and transfer of tokens — exclusively allowing node operators to mine fairly issued tokens encoded in Graffiti.

The protocol takes inspiration from Bitcoin Ordinals, which use inscription to encode tied to Satoshis, the smallest divisible units of BTC, to create NFT-like assets and fungible tokens. “Ordinal Inscriptions… proved that any spare blockspace is valuable,” Heroglyphs said.

The project also seeks to reward node operators regardless of the size of their stake or whether they are selected as block proposers, providing consistent rewards to validators for their participation.

“Control over Graffiti is equitably held by validators,” Heroglyphs said. “This counters the economic advantage that larger operators currently hold by providing smaller validators with a stronger economic foundation from which to operate.”