SafeStake

With ‘The Merge’ happening on Ethereum a few days ago, high expectations have appeared around the future of staking on it’s Proof-of-Stake (PoS) Beacon Chain.<a href="https://www.parastate.io/safestake/" rel="noopener noreferrer nofollow">SafeStake</a> is a trust-minimized middle-layer that fosters decentralized ETH 2.0 staking, and makes it more secure and reliable. It is an excellent option for users wishing to participate in the recent Ethereum staking boom and earn rewards for securing the blockchain.But before we dive into the advantages of staking ETH with SafeStake, let’s take a closer look at what Ethereum staking is.Staking on EthereumThe introduction of PoS on Ethereum presents a new opportunity for ETH holders to earn rewards by staking it.In Ethereum’s Proof-of-Stake mechanism, miners have been replaced by validators, enabling sharding and allowing the network to have stronger liquidations and a reduced ETH issuance resulting in deflation. This makes PoS more attractive over the long term due to the anticipated appreciation of the asset.<img src="https://miro.medium.com/max/875/0*QrXrmYV4kIY03cpx" />In addition, the move to PoS made Ethereum significantly more environmentally friendly by reducing the amount of energy needed to add new blocks to the chain. The previous Proof-of-Work mechanism securing Ethereum used high amounts of energy to create new blocks, and The Merge’s transition to Proof-of-Stake reduced these energy costs by over 99% overnight.<img src="https://miro.medium.com/max/875/0*_NoPLjdWDDwKkYNl" />On the user level, this change means the opportunity for millions of ETH holders to earn financial rewards by staking.Since the Beacon Chain launched in December 2020, Ethereum staking has been enabled, allowing any user or entity with 32 ETH to run a validator on the network.However, it will not be until after the first planned hard fork after The Merge, dubbed ‘Shanghai,’ that stakers that have been running validators on the new Ethereum PoS network will be able to withdraw their 32 ETH deposits.SafeStake: Maximize Your Rewards before the Shanghai UpdateIt is crucial to mention here that there are four main ways for users to stake their ETH: :<ul><li>Solo Staking</li><li>Staking as a Service (SaaS)</li><li>Pooled Staking</li><li>Centralized Exchange Staking</li></ul>If you want to learn more about the different ways to participate in ETH staking, check out the library of resources on the Ethereum Foundation’s <a href="https://ethereum.org/en/staking/" rel="noopener noreferrer nofollow">official website.</a>SafeStake is based on the idea of pooled staking, with the intention of contributing to the decentralization and security of Ethereum by offering a low-barrier staking solution to help increase the number of validators running on the network. According to <a href="https://dune.com/ratedw3b/Eth2-Liquid-Staking" rel="noopener noreferrer nofollow">Dune Analytics</a>, 36% of all ETH is staked in pools.The mini-pool architecture configured in the SafeStake protocol allows holders of as little as 8 ETH the ability to safely and reliably participate in Ethereum staking using distributed validator technology (DVT).What is DVT?Stakers who use SafeStake to earn staking rewards with only 8 ETH are called ‘initializers’ and will select four operators of their choice to manage their validator for them as a committee. Then, Distributed Key Generation (DKG) securely splits and encrypts the validator key into four key shares and distributes them to the operators in the committee. Now, the operator committee runs the Threshold Signature scheme and the staker completes the 8 ETH deposit via the mini-pool contract created. The mini-pool contract enters the SafeStake queue to receive the additional 24 ETH needed to create a validator. Once these 24 ETH are collected from the pool, the validator enters the Beacon Chain queue to become active on the network.<img src="https://miro.medium.com/max/875/0*wfWor_Ab8EkLzJjm" />Because SafeStake is set up in mini-pools, it allows users holding less than 32 ETH to crowdfund new validators by pooling their assets with other users. A new validator can be created each time the staking pool exceeds 24 ETH providing there is an “initializer’’ to deposit the first 8 ETH, allowing holders of smaller amounts to earn staking rewards in proportion to their deposit.Staking with the user interface is easy, similar to signing a single ETH transaction. Once a validator is set up on SafeStake, its robust architecture creates the most fault-tolerant and secure validator solution to maximize rewards and minimize penalties. Now, the validator is distributed and four operators manage it instead of one. If an operator goes offline or experiences an issue, the rest in the committee can complete the data signature request. The protocol uses secret sharing so the key shares that are online can produce a signature equivalent to one created by the real validator key. And it increases security because the entire validator key can never be recreated by any single operator or anyone who compromises an operator.All of the above is possible because of SafeStake’s smart contracts written in Rust, and the HotStuff consensus algorithm. This makes for a secure, reliable staking network that considerably reduces the risks of slashing.<img src="https://miro.medium.com/max/875/0*HYd1Gi3DEmunY-vZ" />In addition, the staking pool model provides no incentive for validators to outperform their peers. Instead, the goal is for validators in the pool to perform as well as the ‘average validator’ to avoid scrutiny and continue to receive deposits from users.In addition, a liquid staking concept provides the group’s depositors with a synthetic representation of their participation in ETH 2.0 staking. These synthetic derivatives give stakers a limited form of liquidity in their staked position that wouldn’t exist otherwise until the Shanghai update happens.The SafeStake staking solution allows users to take advantage of the extensive DeFi market to earn additional returns using their assets as collateral while at the same time receiving skating rewards.Another huge benefit SafeStake offers to average non-technical users is avoiding the technical and operational risks solo stakers take on. Worry-free staking while earning double rewards — why not look at SafeStake?About ParaStateParaState takes Ethereum chain support to the next level by utilizing WasmEdge. We develop and execute high-speed smart contracts with built-in Ethereum compatibility (EVM and EWASM) and interoperability in next-level programming languages like Rust, C &#43;&#43;, and Golang.ParaState is contributing to Ethereum Proof-of-Stake by introducing a new tech stack called SafeStake, a trust-minimized, middle-layer that promotes decentralized ETH 2.0 staking. SafeStake is the first non-custodial infrastructure and staking pool to implement distributed validator technology (DVT). It is written in Rust and uses HotStuff consensus and Threshold Signature architecture to provide robust security and reliability for validators securing the Ethereum network.<a href="https://www.parastate.io/" rel="noopener noreferrer nofollow">Website</a> | <a href="https://medium.com/ethereum-on-steroids" rel="noopener noreferrer nofollow">Blog</a> | <a href="https://twitter.com/_ParaState" rel="noopener noreferrer nofollow">Twitter</a> | <a href="https://t.me/ParaState" rel="noopener noreferrer nofollow">Telegram</a> | <a href="https://discord.com/invite/zFS3Mnfpwj" rel="noopener noreferrer nofollow">Discord</a> | <a href="https://github.com/ParaState" rel="noopener noreferrer nofollow">Github</a>

What is Ethereum Staking and how does SafeStake make it better?

SafeStake

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