Ethereum 2.0 Progress Update: EIP-3675 Released, Beacon Chain Staking Exceeds 6.4 Million ETH

Note: The original author is Ethereum 2.0 developer Ben Edgington.

This week’s Olympic gold medal goes to EIP-3675 (upgrading the consensus mechanism to PoS), which will be a big step towards the Ethereum network merger (The Merge).

Another thing that really caught my attention was the roadmap for trustless Ethereum staking released by Lido, see below.

Beacon Chain

8 months after the beacon chain mainnet launch, we now have over 200,000 active validators! This represents 6.4 million ETH staked on the network, almost 5.5% of the total ETH in circulation. As of now, the annual return on staking is about 6.1%. I remember that we client developers used to think of 100,000 validators as a standard for large networks, but now, even with 200,000 validators, my Teku node performs well: CPU is less than 10%, heap memory is less than 1.3GB, and has perfect validation performance. It's been quite a journey.

Another important milestone: there are no longer 4, but 5 beacon chain mainnet clients, welcome Lodestar!!! The main focus of this amazing Lodestar team (part of ChainSafe) is not staking clients, but rather the extremely important work of building light client infrastructure for Ethereum 2.0. Given this, it is even more impressive to see them actually doing staking and validation work.

analyze

There is some good work on measuring diversity and decentralization of clients on the beacon chain.

First up is the Miga Labs crawler dashboard, which has some nice statistics and a selection of crawlers to view.

Measuring client diversity is far from an exact science, so we can compare Miga's data with Stereum's weekly client diversity observations. For example, Miga's statistics show Nimbus clients accounting for about 0.44% and Teku clients accounting for about 4.7%, while Stereum's statistics show Nimbus clients accounting for about 16.8% and Teku clients accounting for about 0.8%. In addition, beacon nodes are counted here instead of validators, which underestimates validators who conduct large-scale staking operations. There are some other issues, and the error is still large. Despite this, it is clear that Prysm continues to dominate in node distribution, and putting the details aside, the macro view is still very useful.

Shyam Sridhar of the Robust Incentives Group of the Ethereum Foundation conducted a detailed analysis of the decentralization of the beacon chain using standardized indicators such as the Gini coefficient, the Nakamoto coefficient, and the Hirschman index, and the conclusion is a bit depressing:

Based on the Satoshi coefficient:
31 entities control 51% of the validators on the beacon chain network;
8 entities control 33% of the validators on the beacon chain network;
There are many more new validators using third-party services than new solo staking validators.

Altair Upgrade

Work on the Altair beacon chain upgrade continues to progress steadily, with the Beta 2.0 spec released last week, where the only substantive change is validating empty sync committee signatures. The spec also includes some sharding changes, neither of which will impact the delivery of the Altair upgrade. I would have preferred to keep these changes on a separate branch (until after Altair is deployed), but this is no big deal.

Client teams and the Ethereum Foundation have been running two multi-client Altair development testnets to test fork transition functionality. While both testnets perform well, neither is flawless. Our goal is flawlessness, so on Thursday we launched a third development testnet (devnet 2). While the fork itself is working well, there are still some minor issues between clients.

Nonetheless, during the implementer call, we decided to proceed with upgrading the Pyrmont testnet in about three weeks. If you are running a validator on the Pyrmont testnet, please keep an eye on client releases in the coming weeks to see when they become compatible with Altair and make sure to upgrade in a timely manner.

merge

The headlines this week were about the release of EIP-3675 (upgrading the consensus mechanism to PoS), which in my opinion is the most important (and most ambitious) core EIP in Ethereum’s history so far. It’s a brilliant work by my colleague Mikhail Kalinin and a group of supporters.

The merge is now subject to Ethereum’s governance process. While this process is not always quick or perfect, there is a huge appetite to get the merge done, so I expect the community to focus heavily on it (EIP-3675) in the coming months.

Staking

1. Stakehouse

This week I had the great pleasure of spending some (virtual) time with Colfax from the EthStaker/StakeHouse project. Stakehouse is working on two fronts. The first is building tools that make staking and node operation easy: Wagyu, for example, is a "one-click installer" in development that supports four major clients. And the soon-to-be-released Wagyu Key Gen is a friendly environment for generating validator keys without having to use the command line.

Another part of their work is to gather a community of developers around the project to collaborate and decentralize the development of these tools. To this end, they recently held a StakeHouse community call. This call will be held every two weeks from now on, please check the EthStaker discord for announcements. There is a lot of interesting stuff here, and I am looking forward to what this brings with great interest.

In a network where centralization trends are omnipresent, ensuring that individuals can stake with confidence and reliability is critical. SuperPhiz fully understands this, so he challenged the community to build a desktop UI that can manage the four major clients currently before the beacon chain’s first birthday.

2. Lido

You may have noticed that I rarely mentioned large staking pools in this post. I do have a strong professional interest - we are building the Teku client together with staking pools, but as a community member I want to promote the decentralization of staking as much as possible.

So it was great to see Lido’s great post last week where they laid out their intention to move towards trustless staking, which means decentralizing it as much as possible.

Lido is becoming a major force in Ethereum 2.0 staking, controlling around 10% of the network’s validators (mostly as a result of providing liquidity through the stETH token). From the beginning, they have attempted to decentralize operations, such as using various node hosting providers and managing them through a DAO, but Lido remains largely centralized and custodial.

So I was very encouraged after Lido made a thoughtful and unwavering commitment to decentralization, and I like the transparency, and Lakshman also had some comments on this.

Excellent popular science articles

1. EthStaker hosted a validator workshop to help people upgrade their Geth nodes ahead of the upcoming Ethereum London hard fork.

2. Vitalik and Georgios from Paradigm analyzed the sensitivity of the merged beacon chain to reorganizations. This is related to the so-called Time Bandit attacks that caused a stir in the community a few weeks ago, which Christine and I discussed in last week's podcast. In general, it is more difficult to perform a blockchain reorganization under the Proof of Stake consensus mechanism.

3. Justin Bons of Cyber ​​Capital describes some good reasons why Proof of Stake (PoS) is superior to Proof of Work (PoW).

EthCC Conference

Here are some highlights from last week’s EthCC talk on Ethereum 2.0. See the agenda for more detailed descriptions.

1. SSV: Distributed and Trustless Staking Infrastructure‌, Alon Muroch

2. Managing Ethereum 2.0 Validators at Scale‌, Laszlo Szabo

3. MEV in Ethereum 2.0: Introduction and Open Issues‌, Alex Obadia, Alejo Salles

4. On blockchain explorers and the outlook for the beacon chain, Stefan Starflinger

5. Ethereum 2.0 and Staking: A Review and Predictions, Robert Drost

6. Ethereum 2.0/Lighthouse Updates‌, Mehdi Zerouali

7. It’s time to do something about hardware decentralization ‌, Eduardo Antuña

8. Ten Years After Ethereum 2.0, Joseph Chow

There were actually a lot of great talks, but unfortunately I wasn’t able to attend the conference.

Research and Development

Ethereum 2.0 contributor Potuz has worked out a nice way to speed up the hashing of the beacon state to compute the state tree root‌. Basically, in a tree like Merkle, we only hash a small amount of data: 64 bytes at a time. Therefore, the padding used can be pre-computed to get a nice 2x speedup.

On ethresear.ch, a more sophisticated attack on the previously known Gasper beacon chain consensus balance attack was proposed. The new version claims to be more practical in networks with random delays. However, the post notes that Ethereum 2.0 uses a slightly modified version of Gasper, which makes the attack more difficult to pull off.