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Ethereum staking – More sustainable crypto

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Re: Ethereum staking – More sustainable crypto

#61

Post by sendbitcoins »

DennisP wrote: post #21
rhema wrote: post #5

Can someone who knows more about Eth tell me if this staking is a 100% guaranteed to happen? Is there a chance that miners rebel or a fork is made?

It's pretty much guaranteed at this point. The staking network has been running since Dec. 1, with over 3% of all ETH staked so far. The initial migration is simple to implement and a high priority for the devs. Community support is very high, and once everybody switches to the new fork the miners have no influence. The miners could keep running the old PoW chain but it's unlikely to have significant value. Exchanges…

Is there a limit to the number of staker-spots available? I'm wondering about inflation if too many people join the party.

Re: Ethereum staking – More sustainable crypto

#62

Post by DennisP »

jude- wrote: post #49

> Rewards are given for actions that help the network reach consensus. You'll get rewards for batching transactions into a new block or checking the work of other validators because that's what keeps the chain running securely. The unstated gotcha here is that the chain operates through a variation of BFT agreement where staked coins vote for new blocks. All the usual BFT constraints apply -- namely, if fewer than 66…

> Coins minted from staking would need to be continuously re-staked in order to maintain current profitability relative to your competitors

Everybody gets the exact same rate of return regardless of how much they have staked. Each validator has 32 ETH and gets the same amount of reward. You can take your profits and make a new validator or use them for something else, either way your existing validators will have the same profitability as everyone else.

Re: Ethereum staking – More sustainable crypto

#63

Post by DennisP »

sendbitcoins wrote: post #61
DennisP wrote: post #21

Earlier quoted context omitted.

It's pretty much guaranteed at this point. The staking network has been running since Dec. 1, with over 3% of all ETH staked so far. The initial migration is simple to implement and a high priority for the devs. Community support is very high, and once everybody switches to the new fork the miners have no influence. The miners could keep running the old PoW chain but it's unlikely to have significant value. Exchanges…

Is there a limit to the number of staker-spots available? I'm wondering about inflation if too many people join the party.

The more people join, the lower the rate of return[1]. The max inflation is about 1.71% annually, if 100M ETH stakes. Total supply right now is only 115M.

Net issuance will be lower than that because some transaction fees will get burned. It's possible that the supply will actually decrease.

There's no limit to the amount of stake other than the ETH supply, but they're talking about setting a limit of 32M ETH, just because it'd be more efficient and they don't really expect it to get that high anyway. Under that plan the validators get automatically rotated if >32M stakes.

[1] https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0...

Re: Ethereum staking – More sustainable crypto

#64

Post by jude- »

DennisP wrote: post #62
jude- wrote: post #49

> Rewards are given for actions that help the network reach consensus. You'll get rewards for batching transactions into a new block or checking the work of other validators because that's what keeps the chain running securely. The unstated gotcha here is that the chain operates through a variation of BFT agreement where staked coins vote for new blocks. All the usual BFT constraints apply -- namely, if fewer than 66…

> Coins minted from staking would need to be continuously re-staked in order to maintain current profitability relative to your competitors Everybody gets the exact same rate of return regardless of how much they have staked. Each validator has 32 ETH and gets the same amount of reward. You can take your profits and make a new validator or use them for something else, either way your existing validators will have the…

> Everybody gets the exact same rate of return regardless of how much they have staked.

I don't think that's true. The amount of ETH created per block is determined independently of the amount of ETH staked. So if you stake 100 ETH and I stake 100 ETH, and we're the only stakers, then the protocol gives us each 50% of the ETH minted. But if someone else comes along and stakes 200 ETH, then you and I only get 25% each.

This means that staking rewards are zero-sum. If the total reward stays constant, then my rewards per block increase if your stake decreases and mine stays the same (or if mine increases and yours stays the same). Therein lies the problem -- if I'm going to remain competitive with you, then I need to re-stake as much of my ETH block rewards as you do in order to keep receiving ETH at the same rate as you.

Re: Ethereum staking – More sustainable crypto

#65

Post by kybernetikos »

jude- wrote: post #53
kybernetikos wrote: post #51

Earlier quoted context omitted.

> the means of making new coins tomorrow are intrinsically tied to owning coins today by the protocol itself. It's not a shocking economic situation that you can use capital to acquire more capital. I don't know exactly what equilibrium the long term staking rewards will tend to, but it's not very different from interest - where for nearly no risk your capital lodged with a bank increases. The other side is that in a…

I'm talking about the impact of tying coin ownership to coin production on the chain's resiliency, not the morality of earning interest.

And you don't accept the argument that it increases resiliency?

I found Vitalik's arguments quite persuasive.

https://vitalik.ca/general/2020/11/06/pos2020.html

Another angle is that with the arrival of hashrate markets, a PoW miner can attack a blockchain that they have negligable investment in. In PoS that's not possible. You can't attack a PoS chain without a large investment locked into it.

You seem to be warning of various bad effects that we haven't seen in fiat currencies, despite the fact that interest is analogous to staker rewards. For example, the fact that I don't sell someone with EUR my USD without taking into account the interest that EUR can earn vs USD has not directly led to either currency becoming unreasonably expensive to acquire.

Re: Ethereum staking – More sustainable crypto

#66

Post by capableweb »

blhack wrote: post #44
TacoToni wrote: post #18

I am a solo staker and its been a blast learning about PoS and participating in the community. Right now you can earn ~7.8% rewards if you lock up your eth on your own validator. Once EIP1559 goes live (July) and the full transition to PoS merge around the end of the year there are some folks on the ETH research team who see rewards conservatievly going to ~25% [1] [1] https://twitter.com/drakefjustin/status/13841249…

What does the process for staking actually look like? I remember setting up lightning a bunch of years ago and ended up losing some fractions of BTC by messing things up along the way. Is there something foolproof for staking right now, or is it a lot of "git clone this repo, copy this address to a config file" etc.

Here is a easy wizard for staking eth2 https://launchpad.ethereum.org/en/

Re: Ethereum staking – More sustainable crypto

#67

Post by capableweb »

notJim wrote: post #48
tobltobs wrote: post #11

Earlier quoted context omitted.

You may earn up to 7.8% APR (currently) on your stake.

Why would you stake at 7.8% when you can earn 10% on celsius ATM? Honest question.

It's not all about the amount of APY, also which ecosystem you want to belong to and who you trust will improve over time too. Ethereum vs Celsius is a no brainer at the moment.

Re: Ethereum staking – More sustainable crypto

#68

Post by capableweb »

godelski wrote: post #28

Can someone better inform me how POS actually works? Can you actually have proof of any arbitrary (but consistent) action?

Seems like it, here's Algorand's Pure Proof-of-Stake approach as an example https://algorand.foundation/algorand-protocol/about-algorand...

Re: Ethereum staking – More sustainable crypto

#69

Post by notJim »

capableweb wrote: post #67
notJim wrote: post #48

Earlier quoted context omitted.

Why would you stake at 7.8% when you can earn 10% on celsius ATM? Honest question.

It's not all about the amount of APY, also which ecosystem you want to belong to and who you trust will improve over time too. Ethereum vs Celsius is a no brainer at the moment.

So the bet is that Ethereum has a lot of room to grow, and you want to be in that space, right?

Re: Ethereum staking – More sustainable crypto

#70

Post by capableweb »

DennisP wrote: post #58
SavantIdiot wrote: post #57

Earlier quoted context omitted.

The percentage is based on hardware invested or capital staked. I don't think it should be. That is just lazily giving a pass to whales to dominate what is supposed to be decentralized. Totally counter to the spirit of cryptocurrency.

In PoS everybody gets the same rate of return. On Ethereum it's currently about 8% annualized, regardless of how much you have staked. On Bitcoin everybody gets about the same rate of return, but major operations can generally get first access to the newest ASICs or special deals for electric power, so their rates are better. No cryptocurrency has found a way to give the exact same rewards to every human participatin…

> No cryptocurrency has found a way to give the exact same rewards to every human participating. That'd require some kind of verified identity.

Proof of Humanity recently launched and claims to have solved this https://www.proofofhumanity.id/

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