StakeWise, a decentralized autonomous organization (DAO) designed to make Ethereum 2.0 staking easier for users, has completed a $2 million raise ahead of a public launch.

StakeWise aims to make staking easier for Ethereum users ahead of its Eth2 proof-of-stake upgrade, one that consists of users staking their ETH to run nodes instead of “miners” that utilize massive computing power to process blocks and validate transactions.

The funding round was led by Greenfield One, with contributions from Collider Ventures, Gumi Cryptos, Lionschain Capital, and a network of private investors, according to a press release.

Adding flexibility to Ethereum 2.0 staking

The Ethereum 2.0 upgrade is aimed at addressing the smart contract platform's scalability, speed, and efficiency, and is being rolled out in three phases. ETH staked on Eth2 cannot be redeemed until the implementation of shard chains in the first phase, later this year—meaning that a user’s ETH, once staked, cannot be used until the upgrade is completed.

Firms like StakeWise provide a solution. The protocol tokenizes users' deposits and staking rewards as sETH2 (a deposit token) and rETH2 (a reward token). All tokens are mapped 1:1 to ETH in the pool and can be used as a representation of staked Ether in the DeFi ecosystem.

It also uses a token system—the $SWISE token—that shares staking profits among all StakeWise users and allow holders to govern the platform’s major decisions, such as node operators, fees and commissions within the protocol, Treasury allocations, and Insurance Fund parameters to payback users in case of an exploit or hack.

Users can claim $SWISE proportionally to the amount of ETH they deposit into the pool and can claim a higher amount the earlier they deposit. 30% of the available $SWISE has already been claimed by early stakers so far.

“Our choice of tokenomics and governance principles reflect the community-first attitude we adopted from the outset,” said StakeWise co-founder Dmitri Tsumak in a statement, adding that StakeWise users can earn higher yields on ETH2 staking via the tokens.

To support its mainnet release, StakeWise has launched an Early Adopters Campaign to bootstrap participation in the DAO. The first 25,000 ETH deposited into the StakeWise Pool will be eligible for a distribution of 2% of the $SWISE token supply.

Meanwhile, data from on-chain analytics tool Dune Analytics shows that demand for Eth2 is running high, with over 3 million ETH ($5.9 billion) locked in the deposit contract at press time.