Ethereum 2.0 Validators to Enjoy Up to 10% in Staking Returns
As the release of Ethereum 2.0 quickly approaches (expected Jan. 3, 2020), clarity surrounding 2.0 validator staking rewards has emerged, with validators able to expect anywhere between 4.6% to 10.3% in rewards per year. According to Collin Myers, the head of global product strategy at ConsenSys – a blockchain technology solutions firm – to become a validator on the Ethereum 2.0 network, participants must maintain a minimum balance of 32 Ether (ETH), worth roughly USD $5800 at time of publish.
So, what can you expect from the 2.0 network rollout? Well, for starters, this is an absolutely monumental network upgrade for the Ethereum blockchain, which is set to transition its consensus algorithm from Proof-of-Work (PoW) to Proof-of-Stake (PoS). PoS is a proposed alternative to PoW, also preventing against the infamous double spend (while achieving consensus), whereby block creators are chosen via random combinations based on age or wealth (participant stake). The most fundamental difference is the absence of solving computationally intensive puzzles to validate transactions and secure the network (PoW), which ultimately uses considerably less energy.
Several core changes to the Ethereum network include:
- Changes to Ethereum’s data storage structure
- Elimination of ability to execute transactions atomically
- Introduction of sharding
- Lower transaction capacity
Members of the crypto community (and the always vocal Crypto Twitter), have voiced concerns, classifying it as “just as bad or worse than eth1.”
It’s also worth noting that Ethereum 2.0 may actually function as its own distinct blockchain (from Ethereum 1.0) for several years before full integration and merging. If you’re looking for a more detailed explanation of what you can expect from 2.0, check out this recent CoinDesk article breaking down 5 key takeaways on Ethereum 2.0.
Speaking at Devcon 5, a recent blockchain event held in Osaka, Japan, Myers also disclosed a 2.0 returns calculator for validators curious as to their potential yield, which will be released in conjunction with 2.0 (Jan. 3, 2020). You can find more about the staking model by checking out the ETH 2.0 Calculator Telegram group.
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