ReportWire

Tag: Proof of Stake (PoS)

  • MetaMask Launches Staking Nodes on Behalf of Users, Albeit at a Steep Price

    MetaMask Launches Staking Nodes on Behalf of Users, Albeit at a Steep Price

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    Metamask launched Validator Staking support on its wallets as of January 18.

    Users who wish to stake their tokens will need to have at least 32 ETH in their wallets to do so, which is the minimum requirement of the Ethereum network itself.

    Easy to Use

    The users’ tokens will then be staked by Consensys, who, admittedly, have a stellar reputation when it comes to uptime.

    When a validator breaches consensus rules, it is slashed from the network and loses some of the funds set as collateral. With over $2 billion worth of ETH staked across tens of thousands of nodes, Consensys reportedly has never had any of its validators slashed.

    MetaMask wallet owners only need to check the boxes, and they’re on track to own staking rewards. So what are the downsides? The price, for starters.

    The Price of Not Being Tech Savvy

    Although the minimum staking requirement of 32 ETH is not something imposed by MetaMask, the barrier to entry is still quite high because of it. In order to allow more people to participate, Lido, one of the biggest staking networks, allows you to pool your Ether with others – although the rewards for doing so are, understandably, proportional to the amount you staked, leading to lower rewards.

    “With Lido, you don’t need 32 ETH to start staking. Lido will pool your ETH with funds provided by other users until the pool reaches 32 ETH. Lido will then set up a validator node by depositing the ETH into Ethereum’s staking contract and proportionally share staking rewards with you.”

    Although MetaMask also allows for pooled staking, validator nodes are still off-limits without the standard amount of collateral.

    In exchange for its services, MetaMask charges a 10% commission on rewards, currently worth about 4% of the staked amount over the course of the year. This brings a potential payout of not much more than what Lido would offer.

    Another user-friendly staking option is offered by Coinbase, who unfortunately charge a commission of 25%.

    Although MetaMask’s product is straightforward, easy to use, and helpful for newcomers to the ecosystem, someone serious about staking would probably be better off purchasing their own hardware, learning about the practice, and setting up their very own validator node.

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    Cristian Lipciuc

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  • Vitalik Buterin Proposes Measures to Simplify PoS Design, ETH Surges

    Vitalik Buterin Proposes Measures to Simplify PoS Design, ETH Surges

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    Vitalik Buterin, the co-founder of Ethereum, has proposed measures to reduce the load on the Ethereum blockchain and simplify its proof-of-stake (PoS) consensus.

    The proposal aims to decrease the number of signatures validators must make to maintain the network’s operation, ultimately reducing the overall load on the Ethereum blockchain.

    Ethereum Co-Founder Proposes Adjustments

    Ethereum’s attempt to achieve decentralization and involve regular users in staking by supporting around 895,000 validators has led to significant technical challenges.

    The need to process a large number of signatures, approximately 28,000 per slot, imposes a high load on the network. The approach has drawbacks, including limitations on quantum resistance, complex forking, and the need to scale signatures through zero-knowledge proofs (SNARKs).

    To address these issues, the Ethereum co-founder has proposed reducing the number of signatures per slot to a more moderate level, aiming for technical simplification and enhanced quantum resistance.

    The current approach of supporting around 895,000 validators on Ethereum, while aiming for decentralization and broad participation, falls short of fully enabling ordinary individuals to participate due to the high minimum requirement of 32 ETH to become a validator.

    Hence, Buterin proposes transitioning to a moderate solution with approximately 8,192 signatures per slot, reducing the current load of 28,000 signatures.

    Reducing the number of signatures per slot to around 8,192 on Ethereum, as proposed by Buterin, would enable major technical simplification, enhance the chain’s quantum resistance, and maintain a significant total slashable ETH at around 1-2 million ETH. Slashing, a mechanism to enforce good validator behavior, would remain effective with this adjustment.

    Buterin suggests three potential approaches to achieve this: relying on decentralized staking pools, implementing a two-tiered system with “heavy” and “light” staking, and introducing rotating participation with accountable committees.

    Ethereum Looks to Enhance Protocol Development

    The proposed solutions aim to reduce the digital signature load to a manageable level. The key advantage would be setting the future signature load at a manageable level, making protocol and infrastructure development much easier.

    According to Buterin, the future load of the Ethereum protocol becomes a known factor, allowing for potential adjustments through hard forks when developers are confident that technology has improved enough to handle a larger number of signatures per slot with the same ease.

    Buterin cautioned in May about the risks associated with “stretching” Ethereum’s consensus beyond its fundamental roles of validating blocks and ensuring network security.

    Meanwhile, Ethereum has gained attention and is experiencing a surge. Over the last 24 hours, the ETH is up 4.4%, trading at $2,391.24 at the time of writing.

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    Wayne Jones

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  • EthereumPoW Shifts Gears: Core Team Disbands for Complete Autonomy

    EthereumPoW Shifts Gears: Core Team Disbands for Complete Autonomy

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    The EthereumPoW (ETHW) announced its decision to dissolve the organization after in-depth discussions and based on a consensus among the majority, thereby fulfilling the commitments made during the initial fork.

    According to the official blog post, the entity said the decision aligns with its plans to transition to complete decentralization.

    EthereumPoW Embraces Autonomy

    The “unanimous” agreement to dissolve stems from a thorough examination of ETHW’s ability to function independently, detached from Core’s support. This involved a careful assessment of the technical and operational conditions for ETHW to operate autonomously.

    The consensus includes the dissolution of the EthereumPoW (ETHW) Core development team to achieve full autonomy, upholding PoW as the underlying consensus for the chain and maintaining it over the long term. Lastly, embracing decentralized governance to become a deity-less public chain.

    Simultaneously, the existing EthereumPoW servers are slated to be transitioned to OneDAO, a decentralized protocol on the Harmony network. This move is aimed at ensuring transitional maintenance until long-term ecological partners can be achieved.

    The EthereumPoW blockchain underwent a hard fork, separating from the Ethereum mainnet just before the much-anticipated Ethereum Merge upgrade in September 2022, which paved the way for the network to transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism, leading to a drastic 99% reduction in mainnet energy usage.

    In response to growing dissatisfaction among developers with the increased centralization associated with the new Ethereum PoS consensus, former Ethereum miner and ICO investor Chandler Guo created EthereumPoW. Miners, unhappy about the loss of mining revenue, played a crucial role in the genesis of EthereumPoW, aiming to preserve the original vision of Ethereum.

    Grayscale’s Decision to Abandon EthereumPoW

    Exactly a year after the Ethereum Merge, prominent crypto investment firm Grayscale declared its “irrevocable” decision to relinquish all rights to ETHPoW tokens on behalf of the record date shareholders of each product in September this year.

    Grayscale stated in a release that, following a comprehensive evaluation, ETHPoW tokens lacked substantial liquidity and were not supported by the custodian of the products, prompting this abandonment of rights.

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    Chayanika Deka

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