Ready to participate in Ethereum Staking? How to get the benefits in the Ethereum 2.0 system?
Ethereum 2.0 is coming quickly, and when it was launched in early 2020, one of the features it will initially introduce is Proof of Rights (PoS). The Staking feature in Ethereum 2.0 will replace the current mining function in Ethereum 1.0, which will provide ETH holders with a new way to get a return on their investment.
Compared to mining, Staking has several advantages: it is energy efficient and can reduce the inflation rate (ie, the rate of increase) of Ethereum. In general, Staking is safer and more decentralized than mining. In any case, this is a huge change for the Ethereum network and its users.
Basic knowledge about Staking
In order to perform Staking on Ethereum 2.0, you need to run a certifier node and mortgage the ETH token in a contract. This will allow you to participate in the creation of the block: the system will randomly select the verifier from the Ethereum network to vote on the new block, after which the other verifiers will agree on the result of the vote, thus reaching a network consensus. Ethereum founder Vitalik Buterin recently proposed to set Staking's annual rate of return between 1.5% and 18%, depending on the number of ETHs pledged across the network. Ethereum researcher Justin Drake suggested setting the verifier's annual rate of return to 5%, and pointed out that the verifier's income includes the Gas fee (ie the transaction fee for Ethereum traders) and the additional ETH. Ethereum 2.0 will use a combination of rewards and punishments to maintain the integrity and security of the entire network. A small amount of “ Penalties ” will motivate the verifier to remain online; And " Slashing " is another way of penalizing against verifiers, which destroys a portion of the ETH assets that the verifier is collateralized and forces the verifier to leave the network – but this is a penalty against malicious verifiers.
How can I participate in Ethereum Staking?
According to current plans, if you want to participate in Staking in Ethereum 2.0, you need to hold at least 32 ETH (worth about $7,000). Fortunately, you won't spend a lot of electricity costs because you're involved in Staking, because it doesn't involve mining: Staking doesn't require a powerful computer or special mining equipment to participate. Justin Drake said that most consumer notebooks, even the Raspberry Pi, will be able to support at least one certifier client. But the certifier will need to stay online all the time to verify the block. But if you participate in the pledge through the Staking pool (the pledge pool, the infrastructure that provides the staking hosting service), you can bypass some of these requirements. For example, RocketPool provides services that manage Staking on behalf of customers: you don't have to run the certifier client yourself or stay online; you also reduce the minimum amount of participation, you can only pledge 1 ETH (worth about $225) to participate in the ether Square 2.0's Staking. But unfortunately, the Staking pool is usually charged, so participating in Staking through the Staking pool will result in less revenue than running your own software. Similarly, the “Staking-as-a-service” platform will also participate in Staking on behalf of customers and charge a fee. Companies such as Stake Capital, Staked, Stake.fish and Staking Facilities are planning to introduce Ethereum Staking hosting services next year. But some of these “Staking as a Service” companies primarily serve institutional investors and may not be available to individual investors.
When can I participate in Ethereum Staking?
You will be able to start participating in the Etaking of Ethereum in early 2020. At that time, the Ethereum 2.0 beacon chain (ie “Phase 0”) will be put into use. Ethereum development studio ConsenSys said that the beacon chain may be launched as early as January 3 (the anniversary of the Bitcoin creation block), but ConsenSys finally concluded that the beacon chain may be in 2020 Launched later in the first quarter. If you want to use the demo in advance, you can try it out in some of the beacon chain test networks that have been launched. In May of this year, Prysmatic Labs launched a test network Sapphire open to the public, and other projects such as Lighthouse and Nimbus also launched test networks. Since the ETH used for Staking in the test network does not have any real value, you can get it for free, and your Staking reward has no value. In any case, Prysmatic Labs is encouraging Ethereum users to participate in its test network.
How will Ethereum 1.0 and 2.0 work together?
Initially, the Ethereum 1.0 chain and the 2.0 chain will work in parallel. In phase 0 (beacon chain phase), the user will be able to migrate the ETH token to the Ethereum 2.0 beacon chain, which will be responsible for managing the ETH of the user's pledge. During Phase 0, the current Ethereum 1.0 chain will continue to handle non-Staking activities, including trading activities and smart contract activities.
You can still mine at Ethereum 1.0, but the mining rewards will gradually decline. In fact, this has already happened: this year's upgrade to Constantinople has significantly reduced the mining returns (block rewards from 3 ETH will be 2 ETH). Since then, Justin Drake has proposed to reduce the mining awards of Ethereum by a factor of 10 in the next few years, although this will ultimately depend on the price of ETH.
Conclusion
The "stage 0" of Ethereum 2.0 will introduce the staking function in early 2020. It won't completely replace the current Ethereum 1.0 chain, but once it's in use, users can start participating in the Ethereum 2.0 network Staking. By then, all Ethereum users will have the opportunity to participate in Ethereum 2.0 due to the variety of Staking options in the Ethereum ecosystem (whether the user runs the Certifier client or the Staking pool or the Staking service platform). Staking, no matter how much ETH you hold on your hand, no matter how much time you have to participate. Ethereum 2.0 will be a project that has been completed in multiple stages over the years, and the Staking model will eventually replace the current mining model. Author: Mike Dalton
[The copyright of the article belongs to the original author, and its content and opinions do not represent the Unitimes position. Reprinting articles only to disseminate more valuable information]
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