Welcome to the first ever Validator digest! Do you run nodes that help secure blockchains? Are you a protocol specialist keeping track of protocol upgrades and governance? Are you a devops engineer tasked with monitoring protocols? This newsletter is dedicated to you, to help you become better informed on developments that concern you as a validator.
Here is what you can expect from this newsletter:
Protocol upgrade related news
Protocol incidents or developments that impact validators
Regulatory news that affect stakers
Governance decisions that pertain to validators and staking
New opportunities coming up on the horizon
I will keep most points succinct and keep everything covered tailored specifically for validators. Feedback is welcome (you can find me @proofofjk on X or Telegram) and please let me know how I can make this newsletter impactful for you!
This section will go through key updates for protocols I track. I am going to keep these updates succinct and limited to news that are important to validators. I will keep expanding the list of protocols tracked, but do let me know if there are any protocols you'd like prioritized.
Ethereum
Per Christine of Galaxy, Ethereum core devs are considering the possibility of splitting up the Pectra upgrade into two parts. It seems though that all EIPs that have the biggest impact on validators are being prioritized and will be part of the first part of Pectra if the upgrade was to happen in two parts. Check out her tweets below to understand the implications.
Here is a refresher on Pectra EIPs that are most relevant for validators. Pectra is expected to go live early 2025.
EIP-6110: The Execution Layer will be responsible for handling new deposits. This will significantly decrease the amount of time it takes for new deposits to be processed (roughly down to 13 minutes from 12 hours).
EIP-7002: The Execution Layer will be able to trigger validator exits. We can finally create fully non-custodial staking designs and enable users to trigger unstaking rather than having to trust validators to execute unstaking requests.
EIP-7251: Max effective balance for validators will be increased to 2048 ETH from 32 ETH. Minimum stake required will be maintained at 32 ETH. This will help consolidate the number of validators on the network today since you no longer need to run multiple validators for stake up to 2048 ETH. However, you will need to consider the risk that one slashing event could have more impact now with a larger stake.
EigenLayer
EigenLayer is changing up how their security model works, adding in a new layer called "unique stake."
Operators can select any AVS they wish to support as they do now with their "total stake." This "total stake" cannot be slashed and can be allocated to any number of AVSs selected by operators. "Unique stake" is exclusive stake allocated to each AVS and is subject to slashing rules set by each AVS. Operators can only allocate "unique stake" up to the total stake they have delegated to them. (I find the "unique stake" concept similar to how Indexers needed allocated stake to subgraphs on The Graph.)
Link: https://www.blog.eigenlayer.xyz/introducing-the-eigenlayer-security-model/.
Celestia
Celestia's first ever hardfork upgrade (Lemongrass) is happening on September 18 at 14:00 UTC. You can check out their docs to get ready for this upgrade: https://docs.celestia.org/nodes/hardfork-process#lemongrass-hardfork.
Also, a heads up that Celestia's Foundation Delegation Program Cohort 3 is opening up on October 1st. You can find details on how to apply here: https://docs.celestia.org/community/foundation-delegation-program.
This section will go through any opportunities that may be worthwhile to check out as validators. I have no opinions on how well these projects will do, but I will simply use my best judgment on what projects I would have on my radar.
Starknet staking (L2)
Starknet is rolling out staking for their native STRK tokens. The roll out will happen in stages with the first stage expected to happen in Q4. While the ultimate goal is for validators to begin producing and securing blocks, for stage 1, validators are only required to run a full node with 20k STRK tokens.
Link: https://community.starknet.io/t/snip-18-staking-s-first-stage-on-starknet/114334
Edge by Chaos Labs (Oracle)
Chaos Labs has rolled out Edge, a decentralized oracle network, that is being used as Jupiter's main oracle on Solana.
They have onboarded Blockdaemon, Nethermind and MatrixedLink to help decentralize the operator set. I suspect they'll want more operators as they expand their footprint.
Hyperliquid
Hyperliquid has been all the buzz amongst traders for their perp exchange. It's currently running on their own L1 that is based on a Hotstuff inspired consensus algorithm.
They have socially signaled that testing with validators have begun. Given the trade volume and traction Hyperliquid has seen, this could be an interesting opportunity. As a rough benchmark, on days that dYdX traded more than $1 billion in volume, stakers were receiving above 20% APR on their staked tokens (side note: dYdX does not provide inflationary rewards, all of its rewards comes from fees generated on its platform).
A flurry of acquisitions have occurred in the validator landscape in the past couple of months. Alchemy acquired Bware Labs. Nansen acquired Stakewithus. Pier Two acquired Numic. Galaxy acquired Cryptomanufaktur. The last time we've seen major acquisitions was back in 2021, when Bison Trails was acquired by Coinbase, Staked was acquired by Kraken and Anyblocks was acquired by Blockdaemon. Will we see more acquisitions before the year ends?
On the topic of EigenLayer security model, there has been a noticeable uptick in the number of firms working on creating AVS risk frameworks. This entire topic has been a head scratcher. I don't see a huge difference in the process of selecting an AVS versus selecting a new L1. There wasn't a widely accepted framework on assessing L1s, so I don't know how it'd be any different with assessing AVSs. Nonetheless, there are a couple of worthwhile reads on this topic that I can share when I do a longer coverage on restaking.
Please subscribe to our newsletter if you found this useful! You can always send me feedback on X (https://x.com/proofofjk) or Telegram (@proofofjk). Let me know what protocols you want me prioritized or if I missed any important news!
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