If you are an Ethereum supporter, there is one most important thing you can do right now, and that is to run an Ethereum validator.
This article will show you how to keep Ethereum running safely and earn ETH by operating your own Ethereum Proof of Stake (PoS) validator system.
- Goal: Run an Ethereum PoS validator node
- Skills Required: Medium to high skills
- Effort required: 2 hours of research preparation
- ROI: Get an annualized 4.79% ETH reward through DIY validators
How to DIY Staking on Ethereum
We want to see you become an Ethereum validator
“Services from centralized providers can reduce the overall decentralization of the network and cause your deposits to depreciate over time. I strongly encourage each participant to use the most decentralized they can staking, even if it means learning new skills to make it happen.” – Superphiz, April 2022
Last week, Ethereum completed the transition from proof-of-work (PoW) to proof-of-stake staking.
This means that Ethereum’s consensus process has been softwareized and moved into the hands of ETH holders. Now, the Ethereum network doesn’t need to run large physical mining operations to win PoW blocks, it’s just people staking ETH within Ethereum, backed by collateral, not cheating the network, ensuring it works.
Following this transition, the bright future for Ethereum is that by staking to attract more people to this consensus process, Ethereum can be further decentralised, as running large physical mining operations under PoW is really only for those People who have access to a lot of physical resources and have relevant operational skills are feasible.
So this article will show you how to participate in ETH staking as a regular Ethereum holder, let’s start with a plug-and-play node solution.
But first, let’s briefly understand the importance of client diversity!
Why does client diversity matter?
Client software determines how the node operates.
When most nodes run on the same client, once attacked, the blockchain network will be unstable. In short, this explains why it’s important to run a diverse set of clients.
After the merger, Ethereum validators must run two kinds of clients: an execution client that handles the Ethereum Virtual Machine (EVM), and a consensus client that achieves PoS consensus.
As you can see from the above image, Ethereum validators have a variety of execution and consensus client combinations to choose from. It is important not to be monopolistic, and not to let a single client or combination of clients become too popular, as clientdiversity .org explains:
“Many people know that client diversity is important for a more resilient network, but they don’t understand why or how important it really is. Client diversity is not only important, it is critical. If there are 2/3 (66%) of validators use a certain client, then there is a very real risk that the chain could be disrupted and the node operator lose money.
It takes 2/3 of the validators to reach finality. If a client with 66%+ market share has a bug and forks it to its own chain, it will have the ability to accomplish finality. Once the fork is complete, validators cannot go back to the real chain without being slashed. If 66% of the chain is slashed at the same time, the penalty will be the full 32 ETH.
So why is >50% market share still dangerous? If a minority client fork occurs, more than 50% of the majority of clients can get a 66%+ majority share. These situations can be avoided if no client has a market share of more than 33%. That’s why < 33% market share is the goal for all clients.
Execution clients are not immune either. The above risks apply equally to both consensus clients and execution clients. “
When setting up an Ethereum validator node, it is highly recommended to use a small number of clients such as Teku and Besu to make Ethereum as resilient as possible, as doing so will maximize Ethereum’s degree of decentralization.
Now, let’s delve into which validator options are the most friendly to home stakers.
1. Plug and Play Hardware
In November 2020, Bankless published an article titled “The Lazy Guide to Running an ETH Validator”.
guess what? The advice in this post also looks correct today: Dappnode and AVADO are still among the best plug-and-play ETH validator solutions.
Let’s do a quick review here!
* Difficulty: Beginner
Dappnode provides hardware + software tools that make it easy for ordinary people to run their own blockchain nodes. As a result, Dappnode devices have become a very popular base layer solution for running Ethereum validator nodes.
The great thing about Dappnode devices is that they make it very easy for non-technical users to spend ETH. Plug in the hardware, and the system walks you through all the steps required to launch your own validator very simply.
- You need: 32 ETH for staking + a generated keystore to securely store your validator private key
- Clients supported natively: Teku, Lighthouse, Prysm (Lodestar and Nimbus support coming soon)
- Price: Dappnode Home i716 base model starts at €1,562.90
* Difficulty: Beginner
After becoming a fork of Dappnode in 2018, AVADO has moved forward in its own right and is fully committed to simplifying the process of “running your own node” for Ethereum PoS and other blockchains.
Plug in your AVADO device, follow the boot prompts, and with just a few clicks, you can easily stake ETH in your own home!
- You need: 32 ETH for staking storage
- Natively supported clients: Teku, Prysm
- Price: The base AVADO i7 starts at $1,600
2. Solo Staking with DIY Hardware
* Difficulty: Intermediate/Advanced
Are you interested in becoming an Ethereum validator, but would rather repurpose existing hardware, such as a recently replaced computer, rather than using a plug-and-play node?
This road is undoubtedly more challenging. But you’re in luck, as there are tons of resources out there to help you go straight to the “stake-at-home” process!
Before we start, let’s take a look at the basic requirements.
According to a Reddit post by Superphiz in April 2022, DIY solo stakers need to:
- Above-average technical skills
- At least 32 ETH
- Hardware capable of running 24/7
- Internet connection of at least 10Mbps
That said, in addition to meeting these basic requirements, you are free to customize your individual staking settings.
Whether you want to go with a $100 Raspberry Pi 4 or a $1000 Intel NUC, the choice is up to you.
For some inspiration, check out some great DIY solo staking setups we’ve seen in the Ethereum community recently:
If you’re starting to explore more seriously your DIY solo staking options, there are some community resources you should check out.
These resources include:
- Ethereum Launchpad – A one-stop information center with all the information and resources you need to become an Ethereum validator.
- EthStaker – A compilation of communities and resources for all Ethereum staking.
- CoinCashew’s Guide to Ethereum Validators – A wiki-like information center covering how to start, maintain, and simplify Ethereum staking operations.
- Somer Esat’s Guide to Ethereum Validators – A series of introductory tutorials explaining how to set up different combinations of Ethereum staking clients.
3. Rocket Pool minipool operator
* Difficulty: Beginner
Rocket Pool is a decentralized Ethereum staking protocol.
Notably, with a minimum 0.01 ETH stake requirement, Rocket Pool allows anyone to get any amount of rETH staked by trading any amount of ETH. rETH is a tokenized staking derivative of the project, providing passive income through staking rewards.
This protocol bundles the ETH deposited during the above-mentioned rETH pledge process into multiple groups of 16 ETH.
These are Rocket Pool node operators that run what are called minipools.
Rocket pool explained: “The mini pool takes your 16 ETH, takes 16 ETH from the rETH staking pool, and pools them together so it can send 32 ETH to the beacon chain deposit contract to create A new validator node.”
As such, this mini-pool system has great advantages. It lets you stake with as little as 17.6 ETH (16 ETH + Rocket Pool’s $RPL token worth 1.6 ETH for security) and gives you $RPL rewards on top of the ETH validator rewards, boosting your yield.
The mini-pool system is also powerful because its combination with the rETH staking pool process allows anyone to stake with as little as 0.01 ETH, increasing the decentralization of Ethereum.
Also, if you have the means to bet at home alone, then you have everything you need to operate a mini-pot.
As Superphiz points out: “Rocket Pool mini-pool operators do exactly the same thing as solo stakers. But they can do it with less ETH and potentially higher returns.”
Running your own Ethereum validator node is the most influential thing you can do in the Ethereum community.
It helps secure the Ethereum network itself, ensuring that the blockchain brings continuous operations to users around the world. Also, you can make Ethereum more resilient if you use a handful of clients in the process.
For your service and effort, according to the current situation, you can reap the ETH pledge reward with an annual interest rate of about 5%.
We are “rebels” with a sense of belief and goals, and we still have on-chain income!
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/beginners-guide-how-to-run-your-own-ethereum-validator-node/
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