What is Ethereum?
Ethereum is a decentralized, open-source blockchain featuring smart contract functionality and It is the second-largest cryptocurrency by market capitalization.
When staking Ethereum (ETH), we are supporting the network with the opportunity to stake, which benefits the network with Security and provides Stakers with further rewards in ETH! Ethereum uses “Proof-of-stake” (PoS) as a consensus mechanism, where validators are responsible for reaching an agreement on adding a new transaction block to the main chain.
What is the minimum amount of Ethereum required to stake?
No Ethereum is necessary to run a node. However, it is necessary to stake 32 ETH x [amount of validators] to activate the validators and start getting rewards.
What is a withdrawal address, and who owns it?
The withdrawal address is the Ethereum address used to unstake and receive rewards. This address is specified once and it can't be changed after the staking deposit is sent, because the network cements the association of a particular validator and withdrawal address. Access to the private key for this withdrawal address is required to unstake (seed phrase). It is also important to note that P2P is not a custodian and has no exposure to the client’s withdrawal private key. P2P will never ask, under any circumstance, at any time for access to the withdrawal key.
What is a validator key, and who owns it?
A validator key is a private key for maintaining the validator’s work (setting up validators, updating software etc.). P2P owns the validator keys and guarantees the highest standards for protecting these keys from being compromised, breached, or otherwise misused. This is accomplished through Threshold signatures, which are the gold standard for internal/external security threats. This solution is used by leading custodians, crypto banks, and Multi-Party Computation solutions.
Why use smart contracts to stake ETH?
By design, ETH staking requires one staking transaction per 32 ETH. By using smart contracts we significantly simplify staking, reduce the cost of staking and minimize the risk of any human error. Thanks to our audited smart contracts it is possible to activate up to 100 validators with a single transaction.
Can I stake Ethereum with a hardware wallet?
Yes, it is possible to stake ETH with a Ledger (via native connection) or a Trezor wallet (via Metamask).
How do I earn rewards from staking Ethereum?
Ethereum rewards are comprised of 2 parts associated with performing validation duties and block creation.
Validation rewards are taken by performing the validator’s duties as an attestation for a block created by another validator, attestation for a block in sync committee and for creating a block. Validation rewards are accrued every 6.4 min and account for around 70% of the total rewards. Currently, these rewards aren’t withdrawable until the Shanghai upgrade. Following Shanghai, it will be possible to:
Fully withdraw all the staked ETH + rewards and deactivate the validator;
Partially withdraw all the Ethereum over 32 to the withdrawal address periodically.
Block rewards (priority transaction fees + an additional fee from MEV) are accrued with block creation as a payment from transactions to the validator for including them in the block. It appears once every 62 days on average and accounts for around 30% of the total reward. MEV-boost isn’t a separate type of reward but is a technique used to build a block that will yield the maximum fee. Transaction fees accumulate on a p2p smart contract which is then automatically delivered to the client on a monthly basis after the P2P service fee has been deducted.
Can I still use my staked Ethereum while it is staked?
No, the staked ETH is locked in the Ethereum smart contract and cannot be used.
How does P2P take its service fee?
P2P takes its service fee from the execution layer rewards. By default, a special immutable smart contract is used to automatically split rewards between the user and P2P by the previously agreed rules. Other invoicing strategies can be employed by prior agreement.
How does slashing work in Ethereum?
Slashing punishes validators for actions that are very difficult to do accidentally, and it’s very likely a sign of malicious intent. It’s a really rare event: there's only been 5 slashed validators within the whole network over the last month (or 0.001%) https://beaconcha.in/validators/slashings?ref=p2p.org
What is “slashable” behaviour? In a nutshell, it’s a violation of consensus rules in the network. As of right now, it needs to meet three conditions: proposal of two conflicting blocks at the same time, double vote attestation and surround attestation. This can happen due to either an intentional malicious action or misconfiguration of the validator (the most often being, running two of the same validators in the network).
Slashing results in burning 1,0 ETH at once, and removing the validator from the network forever, which takes 36 days. During this time, the validator continues to work but can no longer participate in validation and block creation, getting a penalty of around 0.1 ETH in total.
For the most part that's the sum of the penalty incurred, but there is also an additional midpoint (Day 18) penalty that scales with the number of slashed validators. This is called "correlation penalty” and it's currently only theoretical and has never been encountered on the Ethereum mainnet. This mechanism is there to protect the network from large attacks. The math for calculation penalty is pretty complicated, but the summary is if there are only 1, 100, or even 1000 slashed validators within 36 days the penalty will equal zero ETH. However, if the number of slashed validators increases to roughly 1.1% of all validators (currently 5.1k), this penalty becomes 1 ETH and an additional 1 ETH for every additional 1.1% validator slashed. So if 1/3 of the network is slashed, the penalty will nullify the whole stake (32 ETH). This mechanism is in place to prevent an attack on the network and it should never be triggered by accident.
How can slashing be prevented?
There are special mechanisms in place to prevent validators from meeting the slashing conditions called slashing protection. These mechanisms usually consist of a database with a signing history which the validator uses to check if the block can be signed (coupled with the default levels of monitoring and alerting protection). Additional protection levels will depend on the validator’s setup. P2P uses double-checking with a separate database at the key-manager stage and secures validators' key’s by Threshold, which means that no single person, even a P2P engineer, can run a second validator and a quorum is required for that. The final level of protection we have in place is an institutional grade slashing insurance.
How can staking activity be tracked?
Anyone who stakes with P2P gets access to a personal staking dashboard that can be used to track rewards and the validators' performance (APR, staking balance, % of blocks created with MEV, attestation rate, missed block, market comparisons, etc.)
In what geographic location is P2P's validator infrastructure running?
P2P direct staking infrastructure is located in Europe and distributed among 5 separate physical locations for protection from downtime.
How does P2P protect its validators from widespread outages?
P2P validators have no single point of failure and are downtime resistant with back-ups of all critical infrastructure parts between 5 different physical locations, including:
Signing infrastructure - 3 location-independent key managers with 2-of-3 threshold quorum required for consensus;
Validators Nodes - we have a reserve in a secure region ready to be activated within a maximum of 1 minute in case of an outage;
Consensus layer nodes - our setup has top-3 consensus layer clients (Lighthouse, Prysm, Teku) simultaneously for diversity and preventing outrages related to soft bugs in one client. It also increases availability for validators.
For more information on staking Ethereum (ETH) with P2P.org and our special offer for large ETH delegations, visit https://p2p.org/ethereum.
You may also be interested to read: Lido Helpcenter
For additional staking support, visit the P2P.org ETH Help Centre.
You can also get in contact with a live agent by selecting the speech bubble at the bottom right of this page, sending a message to the Telegram bot, or emailing [email protected].