Towards Proxy Staking Accounts Based on NFTs in Ethereum
Viktor Valaštín, Roman Bitarovský, Kristián Košťál, Ivan Kotuliak
TL;DR
The paper proposes NFTAA, an NFT-based proxy-staking account that binds staking ownership to a non-fungible token, enabling ownership transfer through NFT transfers while preserving asset security. It argues that integrating NFT-bound accounts with proxy contracts provides a flexible, upgradeable framework for DeFi, governance, and asset management, addressing illiquidity and ownership challenges in ETH staking. The authors design an ERC-721–based NFTAA architecture with a factory and proxy, compare it to EIP-6551's TBAs, and demonstrate atomic creation of the NFT and account. Evaluation via Hardhat testing and formal security audits shows successful minting, bonding, staking, ownership checks, and no critical vulnerabilities, highlighting NFTAA’s potential to advance proxy staking and broader Web3 applications.
Abstract
Blockchain is a technology that is often used to share data and assets. However, in the decentralized ecosystem, blockchain-based systems can be utilized to share information and assets without the traditional barriers associated with solo responsibility, e.g., multi-sig wallets. This paper describes an innovative approach to blockchain networks based on a non-fungible token that behaves as an account (NFTAA). The key novelty of this article is using NFTAA to leverage the unique properties of NFTs to manage your ownership better and effectively isolate them to improve the security, transparency, and even interoperability possibilities. Additionally, the account-based solution gives us the ability and flexibility to cover regular use cases such as staking and liquid equities, but also practical composability. This article offers a simple implementation, which allows developers and researchers to choose the best solution for their needs in demand of abstract representation in any use case.