The State of Staking in May 2022
As of May 26, 2022, 13,120,921 ETH has been staked on the Beacon Chain.
Only 900 validators can be added to the chain every day. Currently, 4,234 validators are pending activation. This brings down the wait times between the point a new validator is added to the Chain and the point they start earning rewards– also known as the activation queue– down to nearly five days. Over the last few months the activation queue took a number of weeks, and is finally beginning to fall.
The staking community continues to discuss whether the onboarding process for new stakers needs to be expedited. However, the general consensus is to not make any other changes before the Merge to minimize the risk of adding new variables to an already major upgrade. At best, any changes to the onboarding process should wait until after withdrawals are enabled and, of course, withdrawals will only be implemented after the Merge.
But, Wen Merge?
While the exact date for the Merge is still unknown, the Core Devs and the client teams have been hard at work to ensure that it happens as smoothly as possible.
They have been supporting multiple shadow forks, which are essentially testnets that replicate the state of the Ethereum mainnet. Testing the Merge on these shadow forks gives the community a solid idea about the readiness of the Ethereum mainnet for the actual Merge.
While some of these shadow forks have been on the mainnet, some have also been on the Goerli testnet, a Proof of Authority (PoA) testnet that was created in March 2019. The PoA consensus mechanism relies on a set of pre-selected validators to validate transactions on the network based on certain established rules. Unlike the Proof of Stake consensus mechanism, where validators can approve transactions based on the value of their staked ETH, in PoA validators are selected on the basis of their identity and reputation.
The good news is that the shadow forks that the Core Devs have been testing are improving with each test. A final meeting at the end of this month will decide on the planned merge of the key testnets in June, starting with Ropsten testnet on June 8th.
Many in the community are arguing that upgrading the Ropsten testnet to the Merge will be a milestone in Merge testing. This is because Ropsten is seen as the testnet closest to the Ethereum mainnet. Testing the Merge on Ropsten will give the Core Devs valuable feedback on how the network will react to the most significant upgrade to the Ethereum network since its foundation. The Ropsten upgrade will leave only two more testnets to be upgraded before the actual Merge on the mainnet.
It might be useful just to remind everyone what actually happens with the Merge:
- Clients release a version of their software that listens for a specific ‘Total Difficulty’ to be reached by the Proof of Work chain. Total difficulty refers to a statistical estimation of the number of hashes that a validator needs to solve for the next block.
- Once reached, the next block will be produced by the validator assigned to the next Beacon Chain slot.
- Once that first post-Merge block is finalized, the transition is complete.
Sounds simple? More details can be found in Tim Beiko’s regular updates from the All Core Devs.
Codefi Staking is currently undergoing a study of other potential staking protocols to support. This is in line with ConsenSys’ broader engagement with the multi-chain future as noted in the recent Infura announcement on supporting the NEAR protocol.
While our focus is on customers’ wants and addressing the problems they face when staking against other protocols, we also need to do due diligence on the staking mechanisms of the protocols we support and their surrounding ecosystems.
If you want to talk to us about multi-protocol staking, don’t hesitate to drop us a line at codefi.stak[email protected]
The size of the consensus layer has had a negative effect on our validator performance. We have decided to bring forward a hardware upgrade across our entire platform. The upgrade will happen next month, after which we should return to our excellent response levels well before the Merge arrives in late summer.
Some elements of our new reporting capabilities are now in production. Feel free to reach out to us to understand what kind of data you can obtain now for the validators we run for you.
The rest of our focus is on preparing the platform for the Merge. This includes allowing API customers to specify a fee-recipient for every new validator. We will also expect customers to give us a ‘default fee-recipient’ should they decide not to specify one in every stake. Finally, we will request that customers provide a fee-recipient(s) for us to update against their existing validator set.
If you have any questions, please feel free to contact us.