With Ethereum’s Shanghai hard fork just weeks away, and withdrawals from the proof-of-stake network soon to be enabled, CoinDesk is preparing to wind down our in-house validator project – started in late 2020 as a journalistic and research endeavor that would yield crucial insights into the network’s transition to a full proof-of-stake consensus mechanism. In today’s Valid Points, we detail the steps we’re taking to get ready to unstake our 32 ETH, and we take the opportunity to reflect on the history of the project and lessons learned.
The goal, as stated in the first issue authored by former reporters Christine Kim and Will Foxley, was to “deepen CoinDesk’s editorial coverage” and “gain an unvarnished perspective” as the Ethereum network made its landmark shift from the original “proof-of-work” consensus mechanism – the same cryptographic security system used by Bitcoin – to a more energy-efficient “proof-of-stake” system.
A month earlier, CoinDesk Director of Engineering C. Spencer Beggs had set up a node on the cloud (currently hosted on Amazon Web Services), and the company bought the required amount of Ethereum’s native cryptocurrency, ether (ETH), to qualify as a security validator under the proof-of-stake system. Then we “staked” that 32 ETH, essentially depositing it into a Beacon chain smart contract. The Beacon chain was set up to run in parallel with the main Ethereum network in preparation for the eventual transition. At the time, the tokens were worth about $15,000.
We even gave our validator a nickname, Zelda. Memories are fuzzy, but the choice was inspired either by Zelda Fitzgerald, the flamboyant wife of Great Gatsby novelist F. Scott Fitzgerald, or the character Princess Zelda from the game Legends of Zelda. Or it was just something that popped into Beggs’s head at the moment he was asked to type something into the Beacon Chain explorer.
Princess Zelda, namesake of our Ethereum validator. (Zelda.com)
A week from today, on April 12, Ethereum will undergo a key upgrade known as the “Shanghai hard fork” (referred to as “Shapella” by some insiders), and validators will now, for the first time, be able to withdraw the tokens in a process known as “unstaking.” It’s the biggest milestone for Ethereum since last September’s “Merge,” when the original proof-of-work blockchain was merged with the Beacon Chain to complete the transition to proof-of-stake. (Watch parties are already being planned for the big night. Geek out with the gang!)
In keeping with our original plan, CoinDesk plans to unstake its 32 ETH shortly after Shanghai goes live – again, so we can test for ourselves if and how the process actually works.
To prepare, we are taking the step of updating our validator software to the most up-to-date version – as recommended in this official blog post from the Ethereum Foundation – as well as migrating our validator to include a 0x01 withdrawal credential and mapping out the technical steps for unstaking.
At the end of the day, Zelda managed to earn 3.598 ETH worth about $6,750 in staking rewards which we pledged from the outset to donate to charity (exactly which charity has yet to be determined). Not bad for a bunch of journalists!
CoinDesk can also return the original outlay of 32 staked ether to its coffers feeling pretty good about its gains. Over the past couple of years, the price of ETH has appreciated substantially, more than tripling in price, for nearly $45,000 of principal gains in dollar terms.
To keep reading, click here for a web version of this article.
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.
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WHY IT MATTERS: The newly launched zkSync Era blockchain is seeing brisk activity as value locked on the network crossed $100 million this past weekend amid a flurry of new token releases. More than $69 million worth of ether and nearly $30 million in USD coin stablecoins have been locked on zkSYnc. The network supports “ZK rollups,” which are a type of blockchain scaling system based on cryptography known as zero-knowledge proofs. More than 3.3 million transactions have been conducted on the network since it went live on March 24.
WHY IT MATTERS: The Arbitrum’s first attempt at governance erupted Saturday over a proposal to give the Arbitrum Foundation control of 750 million ARB tokens, worth nearly $1 billion. By late Sunday, the Arbitrum Foundation said it will break up the controversial governance package into a series of separate votes, bending to community pressure after holders of its ARB token staged a loud revolt.
Factoid of the Week
Consensus 2023 is officially less than one month away! This is your chance to join us in Austin in April and save $800 on walk-up pricing for the Two-Day pass and $1,150 on the Pro pass! Don’t wait! This sale ends on Thursday at 12 p.m. ET. Use code FLASH25 at checkout.
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:
