ETH2.0 is coming, do you want to participate in the pledge?
Produced | Odaily (ID: o-daily)
Produced | Odaily (ID: o-daily)
After Bitcoin is halved, the most anticipated thing this year is ETH2.0.
Although the release time of ETH2.0 phase zero has been changed again and again, it was delayed from the beginning of the year to the second quarter, and now it is pushed to the fourth quarter again. But there is no doubt that ETH2.0 is still one of the few hot spots in the current market.
In particular, ETH2.0 is about to be converted to POS, and the highest annualized return of staking is expected to reach nearly 20% (according to the draft), which makes many people excited, and even hoard coins in advance to prepare for action.
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Participate in staking, what you should know
(ETH2.0 roadmap, no fixed timetable)
(ETH2.0 roadmap, no fixed timetable)
Phase 0 will introduce the Beacon Chain (Beacon Chain) as the "command and control" center of the entire Ethereum 2.0 network; Phase 1 will introduce shard chains, allowing data to be stored on these shard chains but not in the shard chain Transactions are processed on the shard chain; Phase 2 introduces the shard virtual machine, allowing transactions to be processed on the shard chain.
Since the beacon chain of phase 0 will run the POS protocol Casper, it can be seen as a new journey for Ethereum to enter POS.
(1) 32 ETH is the minimum threshold
Phase 0 accepts users to pledge ETH to become a validator of the beacon chain, and can obtain pledge income (detailed later), the minimum threshold for user pledge is - 32 ETH (currently about 7264 US dollars). After ETH is transferred to the beacon chain, it will be converted into BETH 1:1, that is, 32 BETHs will become a validator.
If you have 64 BETH, you have to run two validators, and so on. This is to avoid excessive concentration of verification power, so as to ensure that the power and status of each verifier are equal.
In addition, currently only supports switching from ETH1.0 to ETH2.0, and does not support reverse operations. After ETH is transferred to the ETH2.0 deposit contract, it is destroyed to generate BETH, and BETH cannot be reversely restored to ETH.
(2) Responsibilities and Rewards of Verifiers
(2) Responsibilities and Rewards of Verifiers
In addition, decentralized entrustment cannot be realized in phase 0 and phase 1, and ETH holders cannot pledge ETH to nodes for mining.
income:
income:
Proof rewards: Validators are rewarded for making proofs that most other validators agree on (LMD-GHOST and Casper FFG votes), and proofs in finalized blocks are worth more. In Phase 1 of ETH2.0, validators will also be rewarded with cross-linking.
Proposer Reward: The proposer who finalizes the block is rewarded. A validator who stays online and does a good job increases their total reward by roughly one-eighth when they propose a block with a new proof.
Prover Penalty: Validators are penalized for not proving or proving incomplete blocks.
expenditure:
Computational costs for beacon nodes and validator clients are roughly estimated at $120 per year.
Prover Penalty: Validators are penalized for not proving or proving incomplete blocks.
Serious violations: The ETH2 protocol includes a mechanism called slashing, which is used to punish validators who submit malicious data to the network, with penalties ranging from more than 0.5 ETH to the entire amount of the validator. The protocol also imposes additional penalties based on how many other validators were slashed at the same time, e.g. if a third of validators committed a serious crime at the same time, they would lose their entire balance .
Serious violations: The ETH2 protocol includes a mechanism called slashing, which is used to punish validators who submit malicious data to the network, with penalties ranging from more than 0.5 ETH to the entire amount of the validator. The protocol also imposes additional penalties based on how many other validators were slashed at the same time, e.g. if a third of validators committed a serious crime at the same time, they would lose their entire balance .
(3) If you quit, what questions do you need to consider
If you don't want to participate in the verification, you can also choose to withdraw. Validators can also "voluntarily exit" after serving 2048 epochs (equal to 9 days); honest validators' deposits (32 BETH) will be refunded within 27 hours; if the number of beacon chain validators is significantly reduced, the maximum possible Resulting in a network delay of 8192 epochs (about 36 days).
Also, if you have already voluntarily withdrawn, or been forcibly withdrawn due to slashing, you will not be able to rejoin. This means that if you want to become a validator again, you will need to re-stake 32 ETH and a new validator account.
It should be noted that the BETH withdrawal mentioned above cannot actually be realized in phase 0.
Phase 0 does not support accounts, asset transfers, and running smart contracts. Your BETH (principal + rewards) cannot be withdrawn and transferred even if you apply for withdrawal, and is still locked at the protocol layer. BETH can only be used by validators and cannot be transferred on-chain until ETH2 phase 2 goes live, which may take at least a year+. During this time, the exchange will also not be able to launch BETH trading (maybe online futures trading).
(Odaily Note: At present, some counterfeit exchanges claim to have obtained ETH2.0 tokens, which is basically a scam. Investors are advised to pay attention to risks.)
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ETH2.0 pledge cost and benefit calculation
For most investors, belief is important, but income cannot be ignored either. Whether to participate in ETH2.0 pledge depends largely on whether the income can cover the cost. After all, no one wants to trade at a loss.
As mentioned earlier, the computing cost of a validator node for one year is about $120. We assume that the validator is law-abiding and that no bad behavior leads to penalties, so its ideal cost is $120.
How much is the validator income? In fact, income is a dynamic process.
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(V god proposal)
According to V God's proposal, if 1 million ETH is pledged, a maximum of 180,000 ETH can be issued every year, and the maximum annual return rate of pledge is 18.1%.
But as more ETH is invested, the verifier's income will shrink. This is primarily because validators are rewarded for work done based on a dynamic ratio of total network stake; if the total staked ETH is very low, the rate of return per validator increases.
In addition, the proposal also sets an upper limit of 134 million ETH pledges (that is, 2^27), and a maximum of 2.09 million ETHs will be issued every year, with a return rate of 1.56%.
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(Ethereum’s previous proposal)
V God explained that the reason for increasing the upper limit is that 2^27 is currently the best upper limit recognized by the community. In addition, compared with the highest annual interest rate of 8.02% in the old proposal, the new proposal can reach a maximum of 18.1%, which will undoubtedly encourage users to pledge more, thereby ensuring the normal circulation and security of the network.
Although the income looks very attractive, it is also conditional. For example, Phase 0 requires a minimum of 16384 validators (a total of 524288 ETH), and Phase 1 requires a minimum of 262144 validators (a total of 8388608 ETH) to ensure sufficient security and decentralization. The system will not give any rewards until this safety threshold is reached.
Judging from the current operation of the ETH2.0 test network, the number of pledges has exceeded the safety threshold, and the highest once exceeded 1 million ETH.
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(Testnet data)
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(Staking Calculator)
The calculator involves the following variables:
Number of verifiers: a verifier pledges 32 ETH, how many do you want to run;
Validator’s working hours: The longer the validator’s working hours (for example, 100%), the higher the benefit and the greater the cost;
Total pledge amount of the network: the larger the pledge amount, the lower the income;
Ethereum price: the current price of Ethereum;
Staking cost: let’s calculate it at $120 (actually it should include hardware cost);
The network working time defaults to 90%;
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(Pledge result)
In addition, it should be noted that the above calculation does not take into account Gas fees and inflation, and the actual income may be lower.
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Stage 0 Development
Seeing this, I believe you have already made a rough judgment on whether to participate in ETH2.0 pledge. In the last part, we focus on the uncertainty about "time".
The specific release time of phase 0 is always unknown, and there have been many bounces during the period: it was delayed from the beginning of the year to July, and then pushed to the current October (or November).
Afri Schoedon, developer of the Ethereum multi-client test network, said that it is necessary to be mentally prepared. If there is something in the phase zero specification that needs to be fixed, and all clients have to implement the new specification again, then it may not be available until 2021. I personally think that ETH 2.0 will not be launched in December.
Currently, ETH2.0 has 8 client research teams: ChainSafe Systems, PegaSys, Harmony, Prysmatic Labs, Sigma Prime, Status, Trinity, and Nethermind.
According to Ethereum researcher Grant Hummer, the above eight teams are all funded by the Ethereum Foundation, and each client has its own targeted use case. Some clients are optimized for smartphones, and some clients is purpose-built for the enterprise.
In contrast, the development of the Ethereum 2.0 testnet is much smoother. The Eth2.ethernodes website includes the current three major ETH2.0 testnets, namely: Topaz, 68 active nodes; Witti, 39 active nodes; Onyx, 328 active nodes.
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(picture from Eth2.ethernodes)
On Monday, Bitfly (the parent company of Ethermine mining pool) officially tweeted that the ETH2.0 testnet Altona v0.12 has also been officially launched, and the four major clients of Prysm, Teku, Lighthouse and Nimbus have started running the testnet.
In addition, investors also have expectations for ETH2.0, and more and more people are hoarding ETH in an attempt to participate.
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Source: Glassnode
