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Codefi

The State of Staking in June 2021

The second in a series of monthly updates that ensure you stay on top of the rapid developments happening on the Beacon Chain and TBFKAE2 (The Blockchain Formerly Known As Eth 2).
by Nicole Adarme, Kuhan Tharmananthar, Ben EdgingtonJune 30, 2021
State of Staking June 2021 Ft

Over 170,000 validators have staked over 5.4 million ETH on the Beacon Chain with an annual percentage return of 6.6%. This amounts to almost 800K Eth deposited in the last month alone!

There have been seven more slashing events in the last few weeks. That takes the total number of slashed validators to 144. General post-mortems on these slashings state that none have been caused by protocol defects or issues with a particular Beacon Chain client. They also have not been rooted in any kind of malicious attack but rather in a misplaced effort to gain additional redundancy or resilience… And let’s be honest, a couple of them have simply been operational errors as well. 

At Codefi Staking, we employ strong operational procedures set up to prefer missed attestations rather than incur even the risk of slashing. 

Staking Performance

Codefi Staking exclusively runs the Teku client from ConsenSys, which continues to outperform each of the other three clients in terms of rewards earned.

An indicator of client performance is to look at the number of days on which it gains most rewards for stakers. Just as in Q1, Teku is the clear leader on daily rewards so far in Q2, being the winner on 56 out of 81 days (69%). The extremely popular Client A led this metric on exactly zero days.

Staking NL June 01

We can also look at total rewards earned by each client type during the quarter. This metric is much closer, but Teku is once again the most performant.

Staking NL June 02

The ConsenSys Teku team continues to innovate strongly. For example, Teku’s unique snapshot sync is a huge help for infrastructure management, allowing nodes to be fully up and running in a couple of minutes, without having to provision persistent storage.

Merge up

It looks like the Rayonism hackathon, set up to test the viability of the Merge, was largely successful in proving that the proposed approach for merging the execution and consensus chains for Ethereum will work. The community has reverted into detailed planning and specification development and applying the lessons learned.

What has yet to be studied and detailed is the transition from the current state to the new one. Technical challenges aside, much will be driven by how stakeholders like miners and the broader community adopt the proposal.

Eth Roadmap

Show me the door

There has been a lot of discussion around withdrawals in the R&D community with a multitude of proposals on the table. However, withdrawals will only be enabled in a release after the merge and so we’re looking at Q2 2022.

Here’s a brief summary of the possible approaches (which aren’t mutually exclusive):

  • Ability to change withdrawal credentials for a particular validator either once, or on an ongoing basis
  • Ability for transaction fees to be channeled to a different address to the validator address
  • Ability to ‘transfer’ rewards to another validator without exiting the active staking pool

As these discussions progress, Codefi Staking will continue reporting on the benefits and drawbacks of each in future newsletters.

Other References

There are so many great places to get detailed information on what’s happening with the Ethereum roadmap. A good place to start is Ben Edgington’s fortnightly update (despite his stubborn refusal to dispose of the Eth2 nomenclature).

Institutional Staking Services

Codefi Staking allows exchanges, custodians, banks, and crypto funds to capitalize on the revenue opportunities of Ethereum without the technical and operational complexities of running an independent validator.