TechFlow news, Frax founder Sam Kazemian said that an "open market" is the best way to operate liquid staking validators. He noted that currently the core team runs the validator nodes, which requires a certain level of trust. Frax Ether V2 will allow anyone to run validators in a permissionless manner.
Users can use ETH as collateral to "borrow" a validator and control it, as long as they pay the open market interest rate. This is similar to decentralized lending.
This approach encourages competition, allowing the most efficient node operators to profit. Unlike platforms like Lido that only permit specific nodes, this model is trustless.
Frax Ether V1 is similar to Lido, while V2 will resemble Rocket Pool, achieving full decentralization. This helps reduce the trust costs associated with using the platform.
