What is Ethereum Staking?
The Hybrid Casper FFG will reportedly combinewith (PoS) consensus, with the goal of eventually transitioning to PoS. According to the EIP, one of the specifications of the update reduces the block reward for miners to 0.6 ETH from the current 3 ETH (Decrease of block rewards by 80% over a year). ~5% yearly interest for anyone who wanna freeze $1mln (1500eth) in Casper. 4% finders fee for anyone who discovers bad actors (slashing).
Yes, 32 ETH is the staking minimum in the sharding proposal.— Vitalik Non-giver of Ether (@VitalikButerin) June 2, 2018
One Redditor asked a question what should he do to be ready for the PoS on Ethereum and got a reply directly from Vitalik:
- Get enough ETH.
- Keep an eye out for testnets; they’ll start coming in a couple of months. Participate in them to get a feel for what validating will feel like in practice.
How does ETH Staking Work?Validators will need to run clients at a minimum and likely connect a beacon node to participate. Your staked coins are held for a fixed term of 3, 6, 9, or 12 months in an Ethereum staking wallet that is in synch with a smart contract. The amount of reward you will collect depends on the elapsed time – the longer you hold your coins in a staking wallet, the greater the reward will be. The strength of the Ethereum staking network is commensurate to the amount of honestly staked ether. Staked coins are a sort of bond that vouches for the validity of new blocks. In exchange for this service, stakers/validators are being rewarded a fraction of the transaction fees on valid blocks. Casper confiscates staked ether in the event that a validator votes for an invalid block.
How much profit can I make from Ethereum staking?Ethereum staking rewards will be earned on ether coins deposited in a smart contract on a validator node on the Ethereum Proof of Stake (PoS) blockchain network.
Profit from Staking = Validator Rewards + Network Fee
Validator Rewards — A reward for every block upon successful block creation.
Network Fee — Validators receive a cut of the transaction fees that people pay to use the network.
Been diving into the Casper+Sharding spec today. I wanted to understand the sliding scale of staking interest rate versus total ETH staked.— Eric Conner (@econoar) September 18, 2018
Here is the scale. The sweet spot may be around that 10,000,000 ETH number, putting inflation at ~0.36% a year pic.twitter.com/WZTq9bofHt
How do I stake my Ethereum?The details are yet to be formally known as much of the rules of the new consensus are still being discussed. Even the number of ethers needed for staking is still not set in stone and is subject to change. Whatever the number ends up being, ETH holders will be able to band together in “Ethereum staking pools.” – a similar joint enterprise as mining pools. You’ll pitch in your desired amount of ether, join your peers in locking it down, and rake in dividends that are shared in proportion to the size of the deposit of each member in the Ethereum staking pool. The amount of ETH in your staking wallet will determine how large your dividends will be.
Coinbase Custody will stake ETH for you
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