Demystifying Ethereum Staking - Aqeel I Mohammad (@qnou of Ethereum Foundation) @ETHDubaiConf

Transcript

all right thank you very much uh so today i just wanted to take a little bit of time to talk about demystifying ethereum's taking and since we only have limited amount of time i wanted to give it a bit of a speed run um through this so my name is kiel helping out with the theorem foundation and a few other projects in the ecosystem bring staking to the forefront and make it more accessible if you have any questions or information that you require feel free to scan the qr code or reach out to me on twitter at qnou and if you have more information needs be sure to check out the ethereum.org website the team has been doing a very good job of updating information as necessary so just walking through the event and having discussions with lots of

individuals it's quite clear that people are confused about the updates that are happening in ethereum what it means to be moving to proof of stake what ethereum 2 is et cetera et cetera and what the margie is so the reason for moving from proof of work to proof of stake is clearly the fact that there's a relative energy consumption per transaction especially when dealing with things like uh bitcoin so just being in a device apt for us to kind of compare the burj khalifa uh to what the the energy consumption looks like for pos uh or pow and ethereum which is maybe the leaning tower of pizza and then once you

actually shift over to pos this is even exponentially smaller than that so essentially you can run an ethereum node with the energy consumption of a personal home computer so people have a lot of misconceptions about why we're moving to pos and the main factor is that there's a reduction in energy consumption uh there's improved security and decentralization and there's increased accessibility for participation within the network and that this also allows for us for to have secure sharding which wouldn't be possible within the proof of network consensus algorithm that exists currently so just going to run through quick items that i've heard through the event and other questions that usually pop up is

ethereum coming e2 coming soon no but the merge is and we can talk about what the merge is a little bit soon um is the theory moving from proof of stake to proof of work as a consensus mechanism yes very soon as early as june it might be delayed a little bit depending on the circumstances that we have to deal with uh will there ever be a new ethereum mainnet coming no so the ethereum execution layer will stay consistent as it is the transactions all the history etc will be the same and then the consensus layer comes on top to build on top of that uh will there ever be a new e2 token for the stake eater no uh it's the same e token being locked up in the beacon chain and then as soon as withdrawals are opened up you can access to those tokens will proof-of-work

consensus layers stick around after the merge no and will there likely be a theorem uh fork after the merge likely not there hasn't been much as far as indications or incentives for one to happen but most of you are still wondering but really when is e2 coming the answer is that what you guys really frame yourself mentally as eat two or eat one is really the execution layer and the consensus layer coming together and as soon as that happens then the merge it just becomes a theorem again there's no such thing as theorem 2 or a new blockchain at that point and you can learn a little bit more about the great renaming of the merge or what used to be the e2 you can scan this

qr code to go to the blog post that kind of runs into this so internally we kind of look at this as more of a space mission where there's already an existing space station that's functioning but we're improving things we're changing things and reporting things as we go along so this diagram concept kind of illustrates where we currently are at the bottom layer where the ethereum state and the ethereum network has the execution layer and the consensus layer which is currently powered by proof of work but in december 2020 we also launched the beacon chain which was powered by the proof of stake consensus mechanism and in the merge which will hopefully happen in the next

few months you get rid of the the proof of work chain and the proof-of-work consensus mechanism and then the proof-of-stake mechanism comes in but as you notice the state and the transaction history contracts counts are still persistent through the network nothing changes and you still continue as forward so some misconceptions that kind of lead from these upgrades are will these upgrades reduce transaction fees no so this will have no direct impact on network activity or any of the fees will this increase scalability and throughput on the blockchain no scaling on ethereum will usually likely happen to a rollup centric roadmap and layer tools will kind of address all these issues related to scalability without

compromising any of the detentionalization properties of the network so you might be wondering will ethereum still continue to work on sharding with all these l2s coming in yes and this will usually come in after the merge likely next year do you need to actively participate in ethereum staking yes so this is not a delegated proof of stake network you need to actually actively validate make attestations on the network to actually earn income on your state ethereum and you don't need any expensive validator equipment you can basically run these software with the right pairing on yeah something as minimal as the raspberry pi with a decent hard drive most likely you still need 32 ether if

you want to be currently as an intimate and staker and have control over your keys but there are solutions around decentralized pooling services like lido like rocket pool and then there's some activity around shared secret validator services and distributed technologies from companies like obel that you should follow up on so one of the biggest concerns that people have when talking about the theorem staking is will i get slashed i don't want to risk my funds so slashing is actually a mechanism designed to punish bad actors and the likelihood that you'll get slash is very low unless you're building redundancy systems where you're going to start double signing et cetera which isn't recommended for any small time stakers in the first place and

people think that you have to have 100 uptime to remain profitable in the staking ecosystem which is untrue as well so if you're down a few times you're leaking funds you're penalized but it's in conjunction with the state of the network um so one key factor is that if you are with the majority of the network and the network goes down you'll be penalized higher so the fact of the matter is that you should be prioritizing using minority consensus clients so if things go wrong you're not penalized as hard so currently there are five clients on the consensus layer luckily in the past two days prism is no longer the two third majority and we're seeing a lot more diversification and efforts in this

regard so if you do plan on staking please choose one of the minority clients not only for your own benefit but for the benefit of the network additionally there's the same need for diversification on the execution layer needed so right now it's mostly get situated need the mind base who ergon are there if you want to get started with staking or learning about these ecosystems check out launchpad and check out ethereum.org not only do we need diversification within the client uh validators except themselves we also need validator diversification in the rest of the world so as you can see there's not much activity happening in south america africa mina region and south asia and it's important for us to kind of

disseminate this information and make it easier for these individuals to come into the ecosystem so things like share secret validators and distributed validators where you can put in lesser amount of ether and pull it together with your friends and family will make this a little bit more palatable what can you do right now so the kiln test is live this is the last test net prior to the merge so help stress test it see how it works for you and always try to participate and stake on testness prior to staking your actual ether you can scan that qr code to learn a little bit more about the kill test net join the east staker community so basically the e-sticker community is a group of guys that do a very good job of onboarding stakers into the ecosystem and do do a little bit more research on

distributed validator technologies and then finally if you want some more spoon fed information sign up for the validator academy it's a resource that i'll be creating to explain things in a very simple english manner and then if you're into the ethereum community be sure to come out to devconnect happening in april in amsterdam and obviously the biggest ethereum event which is defcon in bogota in october so hope to see you guys there and thank you for your time you