Ethereum 2 Staking: easily done with RigoBlock and PayRue staking service
The Ethereum Foundation has announced the launch of the Beacon chain, the first pillar of Ethereum 2. It will be based on a novel Proof-of-Stake (PoS) consensus protocol, which means that holders will be able to stake their Ether and earn rewards in proportion to their stake by validating transactions.
The new blockchain is not a standard Ethereum protocol upgrade, like the more or less regular hard-forks we’ve seen since Ethereum genesis. Instead, it is a completely new chain that sets the beginning of a new paradigm, with a radical shift:
- the new chain is Proof-of-Stake (PoS) based, something which has been discussed for years and which will help increase transaction throughput and reduce unnecessary energy waste;
- the new chain is going to gradually grow in importance in phases (projected phases 0, 1, 2), eventually becoming the main Ethereum chain and the current “Homestead” chain a shard chain on Ethereum 2;
- Ethereum 2 will eventually consist of 1024 shards, therefore providing high transaction throughput and low transaction costs.
PoS mining on the Beacon chain will require 32 ETH, which will be effectively burnt on the Ethereum Homestead chain and “transferred” (forgive the not technically too accurate term) to the Beacon chain. This means those holders who validate transactions on the Beacon chain (aka PoS miners) will be able to receive a reward on their 32 ETH on the Beacon chain.
This, however, has a few undesirable side effects:
- each validator account is required to stake exactly 32 ETH;
- those 32 ETH are effectively burnt on the current main chain, therefore become unusable until the Beacon chain becomes the main Ethereum 2 chain;
- this results in those 32 ETH being illiquid for quite some time (1 year at least);
- mining on Ethereum 2 still requires the node to be in sync with the network by storing the full Ethereum 2 state.
All of the above points require some work and to a certain extent, might reduce the profitability of the mining strategy. Furthermore, they are very binding and might not be suitable for the average ETH holder.
Therefore, we are happy to announce that RigoBlock and PayRue will jointly launch an ultra-easy-to-use pooled Proof-of-Stake mining service.
RigoBlock is an open standard for multi-party digital token management, while PayRue is an Estonia-regulated user-friendly cryptocurrency wallet with already more than 25,000 registered users and a decentralized exchange.
The RigoBlock protocol is the ideal candidate to build services such as pooled Proof-of-Stake mining on top of. With its unique design, it will natively solve the previously highlighted problems at points 1, 2, and 3. By using a RigoBlock token pool, ETH holders can join an Ethereum 2 mining pool with substantially less than 32 ETH, even fractional sizes. The pooling of ETH will result in a minimum amount left in the token pool, thus providing liquidity to some degree by also matching new entrants with previous stakers who later change their mind and want to redeem their ETH. Point 4 will be solved as well by the implementation of a middleware microservice. One additional value of the RigoBlock approach is the re-staking of rewards, allowing users to compound mining rewards; of course, this would not be possible by solo mining, as the yearly reward on staking is not big enough to cover the 32 ETH Proof-of-Stake mining requirement.
The RigoBlock protocol is available for anyone to build one such service. And we are super happy to announce that PayRue will offer one such service by integrating the RigoBlock infrastructure into the PayRue web and mobile platforms. The user journey for the PayRue user will require no technical knowledge and the magic will happen in the background between the PayRue and RigoBlock backends. The joint cooperation will lower the barrier to Ethereum 2 mining and let ETH holders stake easily from their smartphone.
Register on PayRue to be first in line when the service begins: https://payrue.com/signup
