SOTS #28: Beacon Chain withdrawal to Eth1 address and Secret Shared Validators

Transcript

[Music] hey everyone welcome to state of the state for december 12 2020 i am superfiz i create this video just about every day i'm in the mood and i hope you'll subscribe and join me as we uh develop the ethereum staking community together we had mainnet launch about 12 or 13 days ago and things are going really well with mainnet and yesterday the ethereum ii implementation coordinator danny ryan submitted a pull request to the eth2

spec repository which enabled ethereum one withdrawal addresses from staking nodes and at first this may not seem like a big deal there's not even uh maybe one line of code to change in the spec but what this means is that when you deposit a staking node you send 32 ether you can specify where those funds should go when the withdrawal is initiated in about two years from now and that's really important because it means that you can actually specify a smart contract if that smart contract is managed by a staking pool you can know if the contract is written

well where those funds will go upon exit prior to this and with other staking pools when you send them 32 ether to stake regardless of how they're doing it if they hold your keys if they hold your ether they can do anything they want with it and as much as i hate to say it odds are good that a lot of them will disappear and you're gonna look at me you're gonna say fizz no man it's 20 20. you know there are courts and there are legal systems and you know accidents happen but we're going to get our money back that's just not the truth that's not the way that things work in crypto the way that things work in crypto is you send

your funds in good faith to a great looking company and six months later they mysteriously get hacked ah the funds are safe everything is fine three months after that you discover oh they weren't really telling the truth the funds aren't safe and the founders have disappeared and oh it turns out that the people you thought they were weren't really the people that you thought they were and you're never gonna get your money back so if you haven't seen that play out before let me tell you that it is a very very real occurrence in the cryptocurrency world we are still the wild west regardless of what you think about regulation it is your responsibility to

make sure that you are being as careful with your funds as possible this gets to why i'm excited about this withdrawal method so rocketpool is the pool that is the front runner with planning to use this change to enable mostly trustless taking it is trustless taking but they do have key holders who are signing some keys that give them some control over the funds even though the funds are directed to a smart contract so by far and away rocket pool is the most trustless and decentralized option it will be when it launches hopefully in early in 2021 if you've heard me talk about my red green and yellow or my green yellow and red

green is solo staking please by all means solo steak yellow is this cautionary band of staking pools and red are exchange-based steak where you simply give them your money and forget it don't do that staking pools are cautionary and on the rank of those staking pools still in cautionary i would say rocket pool for me is at the top that doesn't mean it's safe i'm not vouching for it i like what they're doing i like the work that rocketpool has put into this product but it's so important that you remain cautious about your funds in a worst case scenario what might happen

is rocketpool launches to main net it collects a lot of funds someone launches a previously undisclosed vulnerability on a contract and drains funds now it's a little unlikely because to be honest those eth2 coins are locked up and that gives a lot of time to mitigate but i just i want to tell you that worst case scenario of when a new product comes out you need to give it a lot of time weeks months to see how it's going to unfold on the network to make sure the incentives are aligned and that someone isn't going to exploit it quickly but i would say after you've watched for a while and after you're comfortable it is a great time to jump in and consider rocket pool now when it

launches there it's likely that the return rate for early stakers will be very high i need you to remember just like with solo staking those returns come with a lot of risk and regardless of how high those returns seem i would encourage you to just be patient and let things unfold for a bit anyway that's enough about rocket pool it is it's exciting i'm looking forward to happening we're gonna actually talk with dave rugendyk from rocket pool as east staker on monday december 14th and we're going to ask him a lot of these questions about how this this trusted dow works and what's going to happen in the event of an emergency shutdown and i

know he's going to give us great answers regardless of his answers i still need you to be cautious with your funds as we're getting this step behind us the next thing we want to look forward to in terms of staking is secret shared validators ssv it's allowable by bls signatures that they can be combined and without trying to go into too much technical detail and getting it wrong the simple part of it is that unknown parties can combine staking keys and stake together trustlessly that really will enable completely genuine trustless taking pools where you don't know the other party and they don't know you but your bls keys are combined

with a multi-signature so two or three people signing you can initiate movement and deposits or withdrawals that will be the next thing that is happening right now if you want to learn more about that aditya s sankar has a talk from eth global where he talks about secret shared validators and there's also uh schmeitz article that i think it's from coin monks i'll post those below they're really worth your time because as our ecosystem evolves we need to continue to evolve with it and become aware of what is available i'm excited for e-staker as a community advocate i'm excited that we are growing together

that we're supporting each other that we are improving the decentralization of the beacon chain which is good for everyone in the long term so yeah have a great day take care bye