Navigating Staking Strategies in Ethereum Post-Pectra Upgrade

Transcript

Hey, so my name is Anna. Uh I'm head of business development at Everstake and uh today we going to talk uh about staking strategies on Ethereum after upgrade. So actually uh validator mass is breaking and uh right now all uh protocols builders stakers need to consider how they going to interact uh with uh Ethereum staking after Pectra and uh why actually it matters uh it matters because it brings a significant uh faster on boarding uh significant lower cost and new decentralization challenges. So it's 11 um AAPs that

improving staking UX and uh that improving a network's performance itself and uh it's reshapes all the oper operator and validator operations um at a scale. So what this means for validators definitely uh efficiency went up here and uh the stakes also goes with them. So um as we can observe uh we uh have higher blob capacity for it. We have faster activations and lower staking risks and validator management here is simplified and here is uh where every stake is bringing some insights

from the fields to explain how it actually works uh under the hood from the validator perspective. So right now um we can say that uh we going to have a super validator. So maximum effective balance uh per one validator is increasing from 32 is to 248 once. So it's allow actually multiple validators to be merged uh into one. uh it itself reduce the devops load and reduce the network overhead and uh fewer BS signature is needed now and less uh peer-to-peer noise that happening inside

the network. So and slashing risks is decreased. As we done our own technical research of this, we can see that uh before we had uh one is could potentially could be slashed per each 32 is and right now uh we have uh only 0.024 persons that could be applied to each is validator. So it's a great uh news for stakers especially for institutional ones who going to manage less uh number of validators and reduce their their session risk. So uh and near instant validator activations. So right now

deposits could be handled directly on an execution layer that is like very important and it allow faster on boarding of new validators and enable responsible scaling. So as uh we did some math on this part as well and uh we figured out that yearly missed rewards for the network will result as 274 is that right now is available for stakers to actually get this reward not misses and validator exit made um significantly easier. So validator right now can exit through the transaction on the execution layer itself and it's remove reliance on the beacon chain exit

query that we had before uh and uh directly actually contributed to more than 16,000 validators uh that are already exits uh after factor upgrade. So actually the good opportunity here is a dynamic capital allocation and a lineare validator sets for institutional players. So uh also touching the blobs per block uh that we had previously target rates was three and the maximum was six. Right now we have a target as a six and maximum as a nine. So uh it grows significantly and daily blob capacity is grow 48% and right now it

results in more than 8 gigabyte of uh blob data. Uh so uh actually here we have more space for relapse and relapse is the first category who react very fast on this. Uh so for the blob usage uh that are lacks behind capacity right now. So they're using only 66% of a new blob target that we have. So the opportunity here is stay pretty high. Uh fill rates grow from 40 from uh 82 to 86% for more efficient use of space and um unused blob space here is equal to

unrealized output. So right now blobs are cheap but demand is catching up slowly for this. as you can observe. So the spike is under the graph. Uh and for a blob market adoption itself, so blob usage is growing uh up to 21% whereas the network uh rollup capacity is growing from 2.7 GBTE to 3.3 GB itself. So the main uh and main category and median block price here is relatively low. So it's like eight nine digits after the decimal point and that's why it cause a huge spikes in a

profitability for rollups. Uh so uh exit costs are collapsed uh so we have a very significant drop more than 50% in rollups cost and in a serum that burnt uh from blobs for sure uh they organically growing in uh costsaving and uh in a boost their sustainability. So here we can sorry here we can observe um how relapse margin exploded after pector upgrades and uh we know that in absolute numbers for example base earned uh 1.2 million gross and 1.1 in revenue and all tracked

rollups at least doubles their revenue. So for uh profits skyrocket you can observe one by one here. So we tracked uh back throughout the date of leave minets and we can see how it's spiking in a se in a seven days moving average. So uh the hidden cost here uh for validators itself especially as well uh it's a node storage pressure that is actually rising. So peripectra we had uh around 44 GB uh in the node storage space and right now it's growing. So new record is 44.6 GBTE in a node storage and uh if require infrastructure

requirements is also scaling up. So uh infrastructure providers here should be well prepared for this and uh like compared to uh this um pressure uh do the larger validator uh earn less? actually not really uh and this is actually an insight we prepared from everstake site and made some deep analysis on this. So uh we figure out that uh 64 plus Ethereum validators performed on pair with 32 Ethereum validators as we had all want. So uh performance difference uh quite a random and not systemic and larger validators

are just as profitable as the smaller one. How we figure out it and how we can actually prove this to understand uh the exact numbers. So we did some experiments on base of our data science team and um we figure out we selected uh Ethereum minet validators uh that are larger than 32 is and define it them as a group one. Then we defined the total stake of all the validators that has more than 64 is and take a random numbers of validators with 32 plus is and defined them uh as a group two with the same amount of is staked. So then we compared the rewards and average APR on

consensus and execution layer per each group of validators. And here is the result of such experiment that we've done. And we can see here that uh variety between uh average execution layer APR and media and consensus layer APR uh is a pretty random and not so significant. So it's very very small numbers and you can see like it's market uh um by yellow uh that sometimes group with uh 64 plus uh is winning and sometimes the smaller validators is winning. So uh we can conclude and say that it's probably almost no difference in a profitability between the smaller

one validators as we used to do like 32 is and the larger ones. Uh so for the validators uh landscape uh post spectra related to our results that we got from our analysis uh it's uh seems that fewer validators um will take place with a bigger stakes inside each of them and we also have already proved from a market where we can see that uh validator count is dropped already for more than 6,000 validators after the pector upgrade. So it means that uh the validators especially uh institutional related one started to grow the amount of is per

each particular validator they handle and start to reduce the amount of keys they need to manage. uh also uh as uh as we mentioned it will cause a different uh number of case per each entity and uh driving by exits uh and super validator merge uh it should scale incentive for uh end user or for institutional stare because of reducing the cost and reducing the operation workflow for this. So and uh per the statistic numbers average take per per validator is jumped from 32 is already to 32.4 and it continue to grow. Uh so

here is we also can track very interesting uh one the average APR and average effectiveness rating per different verticals uh and types of u setups. So we have a general network parameters here which is the first one. Then LST protocols and node pools for Ethereum staking. Uh then we get a top one professional validators average and actually ever stake. So here we can observe uh who is uh reacting faster for these changes and who already started the implementation and we can definitely say that uh professional validators uh on a first step on this part uh who started this implementation and who

started delivering this new opportunities optimized opportunities for serums taken for their users probably because it's a skin game here. So and uh to summarize the key impact um so validator stock just got an upgrade definitely with a post spectra uh super validators cut their cost and cut their slashing risks. Uh activation time is near instant. Uh despite the things that uh we observing that demand for Ethereum staking are growing itself significantly.

uh also block price collapsed, relapse boomed. We observed with you the relapse profitability spikes etc. So it become more and more profitable and more and more efficient uh due to the cost structure and storage demands are growing. So for sure it's another notifications for um validators and infrastructure runners uh to be well prepared and to cover all the requirements here. And uh while uh validator sets is shrinking the state concentration is rising here. So and uh here like uh based on this uh we are actively digging in uh what is next. So

we're working on uh uh topics of state consolidations that should bring costsaving and uh centralization. Uh we're observing that validator exit streamlines right now uh the networks but reduce the diversity and uh we also keeping an eye uh on a governance that need to uh keep up on Ethereum side and here is uh we are uh opening uh like uh research uh launcher research initiatives where we are welcome all builders, researchers uh validators infrastructure runners and other players to join us to open discussion and to

model um the validator behavior and Ethereum uh staking flow itself for um a future periods and to work on this uh together. So please join us if you're open and if you're on the field. Thank you. [Applause] We have time. We have time for the question. Okay. Hi. Uh, where are we in the progress of updating to the new type of validators especially for institutional providers?

Did they already upgrade to benefit from the efficiencies? Are they waiting for something? And where do you think it will settle? Will everything be transitioned to the new type at the end or will there be any reason to keep 32 each takers for some reason? Yeah, thank you so much for a good question actually. Uh for sure especially for um for a big professional validators uh it's um a very deep question because uh all of them probably not only ever stake have a different kinds of a setup.

So for sure we have our own solutions for example for B2B clients where we setting up validators from 30 to and it's definitely a sign for us after our research that we need to migrate it and we need to increase the amount of is per each particular validator to reduce session risk for our clients and to keep the profitability and reduce operation management stuff. But as we talk about uh let's say retail solutions where we have pooling solution from 0.1 is uh as for now it's probably better to keep it with 32 just to activate validators faster and deliver uh to our clients faster results in case of rewards. So um

and then it probably will be increased also like according to internal management stuff and for sure like um uh differently another questions the participation of liquid staking protocol because for example at stake we are per operator in LA we are operating stadder so uh probably it should takes time while it will be approved inside the protocol teams first uh it should went all the procedures related and uh not only one player could move forward with such upgrade. I believe all the set of operators should do it synchronously and uh bring this uh new function functionality to a protocol itself. So

answering your question internally from our side for sure we are starting with institutional solution upgrade where we have a purely institutional relations who will definitely like 100% benefit from it. So it's already started the process initiated on our side and then probably we'll be moving one by one uh with uh some like maybe timeline that will be needed to implement um all this stuff. Thank you. Thank you. More question seems no. Thank you very much for Anna for the best presentation. Thank you so much guys. Appreciate it.

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