Background

Hi everyone, Sam (@Stakesaurus) here -- one of the Community Lifeguards (CLGs) covering Southeast Asia (SEA)!

Thank you again for your overwhelming interest in participating in the Community Staking Fleet Initiative.

As we kick things off with Bitskwela and The Mu this week, we would like to share a small series of analyses on the SEA and Latin American (LATAM) landscapes with 2 goals in mind:

1. Allow current & future collaborating communities to understand our view of the region and the thought process behind the solo staking activities we want to co-create
2. Invite on-the-ground feedback from communities in different regions to refine our approach and explore creative ideas for increasing the number of solo/home stakers together

I will first present SEA below as the region I’m most familiar with and @enti will subsequently share his analysis on LATAM.

Why SEA?

First, let’s look at some key statistics describing SEA and understand why this region is an ideal spawning ground for new solo stakers.

Key benefits of expanding the solo staking community in SEA:

1. Greatly enhance the jurisdictional diversity of the Ethereum validator set.
2. Digitally native and tech-savvy population — e.g. Familiar with basic internet tech, comfortable with transacting completely online, familiarity with digital monies — provides a good starting point for Web3 adoption, which translates to a larger top-of-funnel for conversion into new Ethereum node operators (solo stakers).
3. A high proportion of low-income earners (relative to the US) means that the additional income from running Ethereum validators is more significant for users in SEA. This provides greater motivation to pick up Ethereum node operations as a skillset.

Challenges in SEA

Next, let’s understand the challenges of scaling the solo staking community in SEA.

Highly fragmented market

Despite our close proximity, SEA is not a homogenous market. Each country has its own language, culture, regulations, infrastructure level, disposable income, and even physical landscape constraints.

Because of this diversity, Web3 communities in this region are numerous. This means a one-size-fits-all go-to-market/distribution strategy to grow the solo staking community is not likely to work.

The approach to scalable community engagement will instead need to be hyper-local and self-organising in nature.

High proportion of users with low disposable income

Meme coins, points/airdrop farming, and other fast-moving narratives capture a disproportionate amount of mind share of users in SEA.

To be fair, this challenge is not exclusive to SEA, but it is amplified because of the low disposable income per capita. With lower capital to start with, it is more difficult for users to make meaningful income from running Ethereum validators. Even with Liquid Staking Technologies lowering the minimum staking requirement for node operators to as little as 1 ETH, many users will still be excluded by the financial barriers to entry.

However, there is a strong emphasis on education across Southeast Asia, especially in countries heavily influenced by Confucian values — e.g. Singapore, Malaysia, Vietnam, Thailand, Philippines, and Indonesia.

This is evident in 2 trends:

1. Large spending on education -- ~15% of public spending and $60 billion in private education spending
2. Large and fast-growing education technology market in SEA -- some statistics here and here

We leverage this culture by co-creating and funding educational initiatives on Ethereum node operations by working with communities across the region.

Poor understanding of Ethereum solo staking

It is often assumed that operating Ethereum validator nodes (even with small stakes) should be left to institutions. This assumption arises from a misunderstanding of the degree of infrastructure and expertise required. For example, many people still think they will be slashed for simply going offline.

There are 2 causes for this in SEA:

1. Education gap: No large-scale educational efforts have targeted non-technical users in SEA. ETHStaker resources (Reddit, Discord, website) are rarely discovered by users in this region because of a lack of motivation, which stems from a poor understanding of the benefits and requirements of solo staking.
2. Language barriers: A large proportion of SEA’s population are not native English speakers/readers, which impedes the large-scale knowledge transfer of technical skillsets such as Ethereum node operations.

As a result, translation efforts into respective local languages in each country will be required to scale the solo staking community in this region.

English Proficiency Categorisation in SEA by EPI Scores

Solutions for SEA

By observing the challenges in SEA, we can derive that the general strategy will consist of 3 factors:

1. Self-organising hyper-local community initiatives
2. Co-creating educational content in both English and respective native languages with local communities
3. Structured grant funding process or incentives for the initiatives above

You will also notice that these 3 factors have been included in our suggested activities in the Community Staking Fleet proposal.

Share your thoughts!

Despite the analysis above, the CLGs are but 3 individuals with our own biases and blind spots. Hence, we would like to invite communities in SEA to share your thoughts and experiences from operating on the ground.

Are there better ways to engage the SEA communities? Do you view the opportunities and challenges of encouraging solo staking in SEA differently? Are there emerging trends that you’d like to share?

Drop your comments below, and let’s grow in solo staking in SEA together!