Vitalik Buterin outlines the advantages of Ethereum 2.0 validators

The Ethereum cofounder Vitalik Buterin dedicated another tweet to the advantages of participating in early ETH2 staking.

Reminder: penalties for the early months of ETH2 have been reduced to 1/3 to 1/4 of their Medalla levels. And if 524,288 ETH participate, rewards are ~25% APR.

So in fact even if you somehow get slashed ~3 weeks after you join, staking would still probably be net-profitable.

— vitalik.eth (@VitalikButerin) November 11, 2020

In the initial months of operation of the Ethereum 2.0 protocol, penalties in the Medalla test network will not exceed a quarter of the stake size. Meanwhile, the annual staking yield in the network with the minimum deposit threshold will be around 25%.

“Even if you are penalized in the first three weeks after joining, staking would probably still be profitable,” wrote Buterin.

Penalties are expected to rise no sooner than four to six months of stable network operation.

He added that penalties are imposed only for violations of rules and malicious actions. There is also a possibility of a bug.

In August, the bug in the Medalla testnet client led to an unplanned fork and a prolonged period during which synchronization with the parent block was not possible. Some validators shut down their nodes and were penalized.

Earlier, the developers launched the ETH2 deposit contract on November 4.

As of writing, its balance amounts to 55,585 ETH (more than $25.5 million).

Vitalik Buterin sent 3,200 ETH to the contract address.

The condition for launching the Ethereum 2.0 mainnet is the participation of 16,384 validators, who by December 1 must contribute a total of 524,288 ETH.

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