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As the move to PoS gets closer, I'm trying to get more details on how the PoS validators will get compensated. In PoW, it is based on formulas and the awards are transparent. Not so for staking unless I'm missing something obvious.

The current proposal is to pay Validators between 1-3% interest per year on the amount of ETH someone is putting at risk to run a validator.

The risk / costs of staking are related to:

  • Tying up their ETH and losing liquidity (duration of time the validator is logged in and validating + the time required to log off the proposed 4 months waiting period to get your deposit and interest back)
  • Risk of having your deposit slashed for any of the published slashing conditions
  • Expense of keeping your node on the network

Based on what I have read, you basically seen no interest until you log off, then you get it all at once (your initial deposit + any interest earned - any slashing fees).

In PoS, what happens to:

  1. Block rewards, currently at 3 ETH
  2. Uncle awards, currently calculated by the formula (U_n + 8 - B_n) * R / 8
  3. The gas for the transactions in the block
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Based on what I have read, you basically seen no interest until you log off, then you get it all at once (your initial deposit + any interest earned - any slashing fees).

The interest actually goes directly to the address you give when you register to become a validator. It doesn't have to be the same address you're using to validate either.

  1. Block rewards wont exist. Validators will be rewarded with the interest based on how in-line with the protocol they act.
  2. Uncle rewards wont exist because uncles wont exist. Since the validator that has the right to make a block is known ahead of time, there's no risk of a block becoming an uncle.
  3. How transaction fees will be done hasn't been included in the spec yet, but they'll likely be given to whoever proposes the shard block.

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