As loyal Valid Points readers recall, CoinDesk set up its own Ethereum validator, fondly nicknamed “Zelda,” in 2020 to witness firsthand the blockchain’s landmark shift to an energy-efficient proof-of-stake consensus mechanism from its original proof-of-work – the same one used by Bitcoin. The goal was to learn, and to report.
That transition was effectively completed last week, when Ethereum’s Shanghai upgrade (aka “Shapella”) went live, enabling the first-ever withdrawals from the blockchain’s staking mechanism.
In keeping with the original plan, we took the steps needed to wind down our validator and redeem our initial deposit of 32 ether (ETH) – worth about $15,000 back in 2020 – along with the extra ETH that Zelda was awarded over time for helping to keep the blockchain secure and running smoothly.
It’s been a learning experience, and one of the key lessons was discovering how long it can take for validators to withdraw their ETH when the exit queue gets backed up. According to CoinDesk Director of Engineering C. Spencer Beggs, we could be looking at roughly a week before our withdrawal request is successfully processed and the 32 ETH hit our wallet.
Another thing we’ve learned, along with investors and traders in digital-asset markets, is that the Shanghai upgrade proved to be quite bullish for the price of ether; it wasn’t the vicious sell-off that some analysts had warned would come. It was never our intent to speculate on the price of ETH, but after a rally in the second-largest cryptocurrency to an 11-month high above $2,100 our original principal is now worth nearly $70,000.
Our validator rewards during the roughly 30-month experiment add up to 3.65618 ETH (about $7,600), and as promised we are planning to donate these profits to charity.
Now that our validator project is concluding, it is also time to say goodbye to Valid Points, which was launched a few years ago to focus exclusively on Ethereum and the wider array of projects connected to it. But don’t worry – the newsletter isn’t going away. Next week Valid Points officially becomes The Protocol, which will focus on blockchain and crypto tech more broadly. You, reader, don’t have to do a thing; your existing subscription will carry over.
We wish to thank former CoinDesk reporters Christine Kim and Will Foxley for having the foresight (and fortitude) to undertake this project and launch Valid Points back in 2020, along with all the other journalists who have contributed to the newsletter over the years. And a heroic shout-out goes to Beggs, who figured out how to do all of this and oversaw the technical aspects so competently.
Click here for a longer version of this article, including a detailed recap of all the technical steps we took over the past week to process our validator exit request with the Ethereum blockchain.
Pulse Check
The following is an overview of network activity on the Ethereum Beacon Chain over the past week. For more information about the metrics featured in this section, check out our 101 explainer on ETH metrics.
Disclaimer: All profits made from CoinDesk’s Eth 2.0 staking venture will be donated to a charity of the company’s choosing once transfers are enabled on the network.
WHY IT MATTERS: The global sportswear brand will release on its recently launched .Swoosh platform its virtual sneaker, called Our Force (OF1) a play on the brand’s iconic Air Force 1 design. Nike says that each NFT will come with a paired 3D file that holders can use to “express themselves in new ways,” and that it plans to add broader utility, including “exclusive physical products or experiences,” in the future.
WHY IT MATTERS: “Anything is on the table, including relocating or whatever is necessary,” Coinbase CEO Brian Armstrong said after former U.K. Chancellor George Osbourne asked whether he could see Coinbase leaving the U.S. at Fintech Week in London. Armstrong added, “We actually have contradictory statements from the heads of the CFTC and the SEC coming out almost every few weeks. How’s a business going to operate in that environment? We just want a clear rulebook.”
WHY IT MATTERS: Ethereum validators that have put in withdrawals requests following last week’s Shanghai upgrade will have to wait upwards of 17 days to get their staked ether (ETH) back, according to data from blockchain analytics firm, Nansen. The unstaking request queue consists of some 28,436 validators or about 5% of all validators, which are responsible for proposing and adding blocks of transactions to the Ethereum blockchain.
Factoid of the Week
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Open Comms
Valid Points incorporates information and data about CoinDesk’s own Eth 2.0 validator. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post.
You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is:
