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Ethereum 2.0Blockchain Explained

A Guide to Consensys’ Eth2 Products

No matter if you are a hobbyist wanting to run your own infrastructure or an institution wanting to provide staking services to clients, we’ve likely got a solution for you.
by James BeckNovember 21, 2020
Eth2 product guide image

If you keep up with Ethereum news, you’ve probably seen that the official Eth2 deposit contract is now accepting deposits, which continue to roll in. At the time of writing (November 24th 2020), 688,128 ETH is staked out of the 524,288 ETH necessary to launch the beacon chain, which introduces proof-of-stake to the network. 

In addition to improving the speed of transactions on Ethereum, one of the goals of the Eth2 upgrade has always been to increase the ways in which people can contribute to the security of the network, and share in its upside. There are already half a dozen clients being built for Ethereum 2.0, meant to be lightweight enough that validators can participate with a consumer laptop. Many staking-as-a-service providers are also coming to market, making Ethereum security more accessible to individuals who can’t run validators on their own, or don’t have 32 ETH. 

Our protocol and product teams have been busy over the last two years building infrastructure, contributing research, interviewing users who plan on staking, and building applications to support the immense effort to upgrade Ethereum. No matter if you are a hobbyist wanting to run your own infrastructure or an institution wanting to provide staking services to clients, we’ve likely got a solution for you.

Teku: Client diversity is essential to keeping Eth2 resilient

At the heart of ConsenSys’ Ethereum 2.0 efforts is Teku, a full-strength Ethereum 2.0 client built to meet institutional needs and security requirements. What is Teku

Ethereum clients connect to each other in a peer-to-peer system, verifying blocks and transaction data. Having clients written in different languages is, as Matt Leising describes in his new book, Out of the Ether, “a kind of insurance policy: it avoids the possibility of a single point of failure and makes it much harder for developers to centralized around C++ for example.” If one client gets attacked, has a bug, or goes offline due to a consensus issue, the rest of the clients will still maintain the latest transaction and block data. Client diversity is proof of the importance of decentralization in Ethereum. 

Like Ethereum currently, there are several implementations of the specification written in different computing languages. ConsenSys’ Teku client is written in Java, which is one of the most popular computing languages used by developers building enterprise applications, and maintained by the same engineering team behind Hyperledger Besu and ConsenSys Quorum. Lighthouse, Prysm, and Nimbus are popular Eth2 clients written Rust, Go, and Nim respectively. Each client has its own features, and Teku is empowering businesses and institutions to stake on Eth2, with features like external key management and slashing protection

Codefi Activate: The more validators, the stronger the network

Codefi Activate worked with the Ethereum Foundation to build the Eth2 Launch Pad application, which provides technical onboarding to the requirements, responsibilities, and risks in becoming an Eth2 validator. The step-by-step guide is meant for technically capable Ethereum developers to send ETH to the deposit contract, and start running their own validator clients. Each validator requires exactly 32 ETH, and individuals can deposit as many multiples of 32 ETH as they’d like.

The first page of the Launch Pad provides an overview of key responsibilities and concepts  — such as slashing, key management, signing keys, risks, and the time commitment required. After you acknowledge the risks and requirements, the guide helps you select a client, generate keys, upload a validator, and connect your wallet. 

While you need to be familiar with using a command line interface, the Launch Pad is the ideal place to start your staking journey.  

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Codefi Staking: Supporting applications offering staking to ETH holders

Many staking pools and staking-as-a-service providers are coming to market. Centralized exchanges like Coinbase and Binance already provide staking services for other proof-of-stake blockchains, and are expected to offer staking services on Eth2. Ethereum-native staking pools like Rocket Pool permit users to stake as little as 0.01 ETH and receive rETH, a tokenized staking deposit. LiquidStake, a new solution from DARMA Capital has no minimums to stake, and also lets users take out a USDC loan using their staked ETH as collateral. 

Each of these applications broaden participation in Ethereum 2.0, yet still need to connect to the clients on the network. This is where the Codefi Staking solution comes in. Codefi Staking is a white-label API (meaning you won’t see it as an end user) for businesses that want to stake on Ethereum 2.0. Codefi Staking enables businesses to stake their own ETH or their customers’ ETH without needing to run their own validator infrastructure. The result is reduced technical risk and increased rewards generated by the Eth2 network. 

In June, ConsenSys announced a cohort of companies part of the Codefi Staking “Pilot Program,” which includes Binance, Crypto.com, DARMA Capital, Huobi Wallet, Matrixport, and Trustology. Codefi Staking aims to reduce the risks associated with running your own validator, including theft or loss of withdrawal keys, incorrect transfer of funds to the Eth2 deposit contract, and hardware or internet connectivity failures which result in a loss of validator rewards. With Codefi Staking, validator keys are held in a secure vault with online signing capability and multiple layers of gatekeepers validating transactions to prevent unauthorized usage. Importantly, there is 24/7 support and a professional customer service team available. Codefi Staking uses Teku as its client of choice 

For companies interested in staying ahead of the competition with low risk and low barrier access to the Codefi Staking solution, the Early Adopter Program is a good option. It’s designed to facilitate onboarding for select institutions and enterprises prior to the Ethereum 2.0 launch so they can stay ahead of the competition with direct communication from the Ethereum 2.0 teams building the clients and network. 

Infura: More reliability and tools for querying Eth2 data

Ethereum 2.0 phases in the coming years will enable ETH transfers and withdrawals, shard chains fully-compatible with smart contracts, contract calls and execution environments for scalable dApps, and more. While companies and developers running applications on Ethereum 2.0 can still choose to run their own client and node infrastructure, they will also have the opportunity to connect to Infura’s Eth2 Beacon Chain API (you can request to access their private beta here). 

In the immediate term, one of the most basic needs for individuals staking on Eth2 is the ability to monitor validator balances to know if they are accruing the expected rewards. While there are several block explorers available where you can see this information, Infura’s ETH 2.0 Beacon Chain API is making it possible to query this data automatically so developers can easily take action on the data. For example, you could write a program that monitors the balance and sends you an SMS message if it unexpectedly drops.

Infura’s developers are also supporting Eth2 client teams working toward compatibility with the Eth2 specification. Ethereum developers today benefit from the uniformity of the Ethereum JSON-RPC API which lets them switch Ethereum client implementations without breaking code. Infura views API interoperability as a valuable public good for Ethereum and open-sourced an Apache 2.0-licensed tool for testing client API conformance, called eth2-comply

Stay knowledgeable

If you’re still trying to wrap your head around Ethereum 2.0, proof-of-stake, the various phases and new terminology, our Ethereum 2.0 Knowledge Base is full of great resources. And for the week-to-week updates, Ben Edgington’s “What’s New in Eth2 Newsletter” comes highly recommended.