How to Stake ETH and Earn With The New Ethereum 2.0 Through SafeStake | by Dj | ParaState | May, 2022

The transition from Ethereum to Ethereum 2.0 brings a core change to what is known as the engine of the blockchain: its consensus mechanism. From one based on Proof of Work (PoS), the new update will make the definitive leap towards consensus based on Proof of Stake (PoS).

With this new update more users will become validators than ever before, participate in the Ethereum network and educate themselves about the blockchain as a whole. The knowledge gained on ETH2.0 could be expanded to other networks, resulting in greater participation in the cryptocurrency industry.

We are already seeing various solutions for staking on the new ETH 2.0 emerging in the industry. Investors of all sizes are betting on these solutions to obtain higher interest rates offered by these platforms focused on decentralized finance (DeFi) under the Ethereum 2.0 Staking scheme.

One of the attractive options breaking into the market with strong momentum is SafeStake, a trust minimized middle-layer fostering the decentralization of ETH 2.0 staking that has the objective of driving a larger validator base to improve the diversity and decentralization of the new Ethereum PoS.

Perhaps you are still considering participating in Ethereum 2.0 Staking through a provider like SafeStake, but you are not quite convinced to place part of your wealth in expert hands and start generating higher dividends than in traditional banking.

If this is the case for you, let us first point out some advantages of participating in ETH 2.0 Staking.

Ethereum and its new update has created a lot of noise since it was announced by its creator Vitalik Buterin a couple of years ago. The scalability problems of Ethereum in handling a few hundred transactions per second became evident several times on the network, generating high gas fee costs for users to pay for transactions.

With Ethereum 2.0, it is expected that once its planned phases (phase 0, 1 and 2) in its roadmap are completed, the network will be highly scalable and sustainable, generating a gigantic economy compared to its current numbers.

In that sense, its native token, ether (ETH) is expected to grow in demand and therefore in value. For example, since the announcement of the launch of the first phase of Ethereum 2.0, the value of ETH increased from ~$550 in December 2020 to ~$2,880 in August 2021.

Furthermore, driven by the rise of decentralized applications related to NFTs and GameFi, ETH reached its all-time high of ~$4,800 in the midst of a bull market in Q2 2021.

All this growth has taken place within a scenario without transaction scalability, increased disk space or sustainability; the 3 vital points on which Ethereum 2.0 is centered.

Additionally, transferring to a proof-of-stake consensus mechanism will remove mining rewards and the burn rate may exceed the issue rate. An example of this occurred last August 2021, after the activation of the EIP-1559 improvement, when Ethereum burned ~$14 million worth of ETH instead of rewarding validators.

Source: Watch The Burn

As of this writing, a total of 2,354,597 ETH (~USD 4,732,340,354) have been burned since Ethereum’s EIP-1559 update went live last year.

If this rate of consumption continues, an increase in the price of ETH could follow until it stabilizes after the final launch of Ethereum 2.0, which is expected to be in a couple more years.

Under this scenario, the profitability of mining would plummet significantly after the merger of Ethereum 2.0 scheduled for the end of 2022. By then, users would have to stake part of their own ETH to continue obtaining rewards under the PoS scheme, thus decreasing the liquidity of ETH — another factor to take into account for a possible revaluation of ETH in the medium and long term.

Participating in ETH 2.0 Staking with SafeStake will be as simple as depositing your ETH into your non-custodial wallet and connecting to the official SafeStake website with your wallet:

https://www.parastate.io/safestake/

Once there, the user will be required to stake 8 ETH or more to become a validator.

During setup, the validators’ selected operator nodes will perform the corresponding validation task through a simple on-chain transaction signature, based on the Secret Shared Validator (SSV) distributed validation model for fully decentralized staking.

At this point, with SafeStake acting as a buffer between an Ethereum Beacon Chain node and a validator client, Ethereum 2.0 staking is initiated once the 32 ETH deposit amount required by the Ethereum network is reached.

In SafeStake, the operator will be the service provider holding the validators’ validation key shares and providing professional ETH 2.0 staking duties for the validators.

At the user level, you will start receiving passive income for putting your ETH ‘to work’ via SafeStake in ETH 2.0 Staking, at the current ~4.7% APR on the Ethereum network.

With a clearer vision of the future panorama of Ethereum 2.0, considering how this important improvement is directly affecting the market and the industry in general, as well as the expectations of sustained growth of the main public network of most relevant decentralized applications in the ecosystem; there are plenty of reasons to step up and participate in ETH 2.0 Staking with SafeStake.

SafeStake offers, first of all, a very low barrier to entry compared to the competition. The minimum ETH holding amount for a validator of the SafeStake network is 8 ETH.

Some prominent players in the ecosystem such as SSV Network require a minimum of 32 ETH to be able to exercise the validator option in the Ethereum network.

With just 8 ETH as a minimum participation requirement in ETH 2.0 Staking, SafeStake is opening the doors of diversity while helping to improve the decentralization of the industry’s leading blockchain network while strengthening its security.

More validators, more decentralization and more security in the blockchain network — a foolproof strategy that SafeStake is applying with ETH 2.0 Staking.

On the other hand, as SafeStake is an intermediate layer of trust for ETH 2.0 Staking, security is a crucial aspect when staking your ETH. For this reason, SafeStake is written in one of the highest-level top-tier languages currently in the blockchain industry, RUST.

Rust is king in preventing memory-related bugs and vulnerabilities, and always beats Go in runtime benchmarks. In addition, Rust is compatible with the existing ParaState codebase, thus allowing it to take advantage of the technical capabilities of the multi-chain platform allowing the scalability of dApps in Polkadot thanks to its EVM Pallet based on Substrate and compatible with the new leading industry standard WebAssembly.

With Rust as source code in SafeStake, efficiency will be a norm when processing a large volume of data and other CPU-intensive operations related to our smart contracts.

Another very important aspect related to the previous ones is the use of the consensus mechanism in SafeStake. In the new ETH 2.0 PoS, the penalty for inactivity, dishonest validations or any other malicious behavior (slashing penalty) can result in losses of the amount of tokens (ETH) at stake contributed by the participants in the staking process.

According to Ethereum.org, the amount of ether slashed depends on how many validators are also being slashed at around the same time. This is known as the “correlation penalty”, and it can be minor (~1% stake for a single validator slashed on their own) or can result in 100% of the validator’s stake getting destroyed (mass slashing event). It is imposed halfway through a forced exit period that begins with an immediate penalty (up to 0.5 ETH) on Day 1, the correlation penalty on Day 18, and finally, ejection from the network on Day 36.

Aware of the need to use a consensus protocol when executing the solutions inherent to Ethereum 2.0 Staking as the engine that can move the blockchain network and therefore the underlying economy; SafeStake uses the underlying consensus protocol HotStuff, which is more robust compared with the qBFT/iBFT protocol, helping to minimize the validators slashing odds.

In addition, SafeStake will be under the direction of blockchain technology specialists by supporting its decentralized governance and network maintenance, as well as the necessary technical support to guarantee its correct operation through the ParaState DAO.

With SafeStake you will not only be able to generate passive income with your ETH at a much lower requirement than the rest of the decentralized options in the industry, but you will also be able to rest assured that your ETH will work in a highly secure, scalable and low-cost protocol, the new Ethereum 2.0.

ParaState is a multi-chain smart contract platform that provides full compatibility between Ethereum, and Polkadot and other Substrate-based chains, as well as other chains wanting to provide Ethereum compatibility through its next-gen runtime infra EWASM.

Parastate is participating in ETH2.0 Staking with a new tech stack called SafeStake, a trust-minimized, middle-layer fostering the decentralization of ETH2.0 staking. SafeStake is a non-custodial infrastructure for distributed validator technology written in Rust, implementing HotStuff consensus and Threshold signing architecture to provide more robust security for ETH 2.0 staking.

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