September 20, 2020

ConsenSys: Ethereum 2.0 validators will receive up to 10% per annum for staking

Colin Myers from Brooklyn startup ConsenSys claims that after the launch of Ethereum 2.0, validators will be able to rely on 4.6% -10.3% per annum of remuneration for staking, reports CoinDesk.

According to him, for the validation of blocks to participantsthe network must have at least 32 ETH (about $ 5200 at the current rate). He also develops an application that allows calculating the gross and net annual income of validators, taking into account the cost of equipment and electricity.

“The ETH 2.0 Calculator is created by protocol developers, validators, and enthusiasts to increase transparency and understanding of the Ethereum 2.0 economy.”Myers said during a speech at Devcon.

He added that the launch of a new toolwill happen together with Ethereum 2.0 - in the first quarter of next year. Myers also clarified that the amount of remuneration he named was only indicative so far and is now actively discussed by the developer community.

“These are the assumptions put forward by Ethereum researchers. Until we switch to 2.0, no one will say so with confidence. ”, - said the former technical director of the AI-startup Core Scientific Christie-Lee Minehan, who previously proposed the ProgPoW mining solution.

Sharding effect

One of the recent offers of Vitalik Buterininvolves a sharp reduction in shards at the initial stage of launching network 2.0. So, instead of 1024 data segments, the founder of Ethereum suggests launching only 64.

Buterin is sure that this approach can helpAt first, to simplify communication between shards and somewhat relieve the network. However, decreasing their number means reducing the number of validators and the size of the steak needed to support Ethereum 2.0.

"The decrease in the number of shards is associated with somecompromises. In this case, it will be necessary to increase the power of the independent validators participating in the network. This is already a higher level equipment. As a validator, participation in the network will cost me more ”Myers added.

According to his calculations, Ethereum 2.0 validators with 32 ETH steak will earn up to 10.4% per year, provided that in total 2 million coins will be blocked in the new network.

“Ethereum 2.0 seeks to solve the problems of elasticity and the balance of supply and demand. One of the truly innovative and impressive things about the new network is dynamic pricing. ”, Said Jack O’Holleran, CEO of startups at Skale Labs.

The transition from 64 to 1024 shard developersthey plan to implement during Phase 1. According to them, at this stage the system will need much more validators. According to Myers’s calculations, at this time, the remuneration to the stakers will drop to 7.2% - a yield comparable to Dash and Tezos.

As the ecosystem grows and, accordingly,the number of coins blocked for staking, the annual rate of return will decrease for each of the validators. Such a dynamic remuneration system implies that the level of remuneration to the participants corresponds to the degree of network protection they provide.

Earlier today, ForkLog reported on the ideas proposed by Vitalik Buterin to improve Ethereum 2.0.

We also recall that Ethereum developers plan to reduce cryptocurrency emissions by 10 times in 2021.