A substantial benefit of staking ETH is the opportunity to generate passive income on crypto assets. An Eth2 validator generates rewards for honestly performing duties and growing the network - each duty performed generates a fraction of ETH, which over time can turn into substantial returns 💸
The amount of ETH a validator generates highly depends on that validator’s performance and which staking service they are using (if any).
In the most basic terms, the better a validator performs, the greater the staking returns. If you’ve decided to go with a staking service to guarantee performance rather than DIY-ing it alone, the first step is to compare different staking providers on a number of different levels:
Rewards Sharing / Fees 🤝
Attestation Rates & Effectiveness 🎯
Slashing History & Protective/Remedial Measures 🧯
User Private Key Management 🔑 🔑
*Bonus: Make sure that you are not captive and can take your validator with you if you want to switch services! 👋 👋
Generally speaking, the more centralized (custodial) the service, the higher the security and slashing risks.
The more centralized (custodial) the service, the higher the security risks and penalties its users may face.
A major custodial staking risk is increasing slashing severity for key aggregation - validators are punished with increasing, exponential severity the more actors participate in the same slashable event. If a service aggregates its users’ validator keys (custodial and semi-custodial services), and makes just one error, all of its users face steeper penalties as compared to a DIY staker who committed the same type of offence.
The more validators a custodial or semi-custodial service manages, the higher the potential penalties its users face if a slashable event occurs.
Additionally, a hack on a centralized service brings with it all types of security risks for its users (as wide and deep as the hacker’s imagination).
Remember, not your keys, not your ETH! The only way to stake without risking your keys and ETH is DIY staking, or non-custodial staking services, of which there is only 1 in existence today…
The Blox Live Desktop App is the gateway to seamless validator set up and management and validator keys are kept completely segregated and secured in KeyVault – a personalized remote signer powered by Hashicorp Vault with a proprietary plugin for signing functionalities and built-in slashing protection.
Blox was built for security-conscious crypto stakers offering participants the chance to stake on Eth2 with the utmost security and performance.
The cherry on top? EARLY BIRDS STAKE FREE. Blox has a promotion on right now that lets you set up as many validators as you want, with no service fees until transfers are enabled.
The platform is also developing a decentralized staking pools network with the Ethereum Foundation based on Secret Shared Validators (SSVs). If you don’t have enough ETH but want to stake, this will be THE way to do it! Stay tuned, Q3 2021 🙌