Sceptre Update: Validator Partnership, APY boosting and Voting Rights

In our May monthly recap, we shared that FIP.16—which introduced a mandatory 20% minimum validator fee—prompted us to explore running our own Flare Network validator nodes. This fee increase impacted both the staking yields for the Sceptre community and our own operational costs. However, after thorough testing and evaluation, we opted for a more efficient path: we formed a strategic partnership with a third-party infrastructure provider to operate an organization with 4 nodes. This approach not only gives us greater flexibility to manage Sceptre’s business operations, it also allows us to maximize the rewards we are able to pass on to our community.

In the interest of transparency, we briefly deployed a second organization, but rolled it back immediately upon learning of Flare's limits of one per entity and it’s being wound down. We are fully committed to following Flare’s guidelines and promptly corrected our setup to remain compliant.

Our goal has always been to maximize yield for our users, but the 20% validator commission introduced by FIP.16 significantly reduced those returns. By running a validator through a partnership, we can bypass a significant portion of those fees and distribute higher rewards directly to our community, which is exactly what you can expect from us moving forward.

What does this mean for our stakers on Flare?

The flexibility provided by running validator nodes gives us more room to share rewards with the community. As a depositor, you don't need to do anything - the pool will simply receive more FLR tokens with each regular staking and delegation distribution, directly boosting Sceptre for Flare’s overall APY and accelerating the increase in value of sFLR relative to FLR.

Regarding voting power

By owning Wrapped Flare tokens (WFLR) users get the right to vote on issues that govern the development and operations of the Flare network. By staking on Sceptre, they lose that power inherently due to the fact that they are no longer holding WFLR. We have clarified this in the past, but for clarity’s sake, we want to reinforce that our depositors’ voting power isn’t transferred to Sceptre - it’s not in our Terms of Service and the user never agrees to it when staking on Sceptre so, by default, it’s never transferred to us. For that reason, Sceptre does not and will never use your voting rights.

FIP.16 prompted us to adapt and look for the best outcome for both our users and the sustained development of Sceptre. We are constantly looking for the best opportunities for our community, and having a direct say in our infrastructure operations is crucial to delivering a better protocol—and a higher yield—to everyone trusting us with their FLR.