BitMEX Research is now a validator of Ethereum

BitMEX Research becomes an active validator

BitMEX Research is pleased to announce that as of August 31, 2021, BitMEX has become an active validator on the Ethereum beacon chain (Eth 2.0). BitMEX’s verifier number is 222,424.

Within a few hours, BitMEX has proposed BitMEX’s own block, 1,964,794 time slots in 61,399-time slots.

This is quite exciting, and it seems that the barrier to entry is low before a block can be generated.

In the coming weeks and months, BitMEX will study Ethereum’s latest proof-of-stake system (PoS) and beacon chain in more detail. BitMEX plans to conduct research on the following issues:

  • Slashings, penalties, and rewards;
  • The impact of staking on Ethereum coin supply;
  • Hostile staking strategies;
  • Selfish staking strategies;
  • How staking may impact MEV;
  • Overall review of the sustainability and robustness of the system.

In order to perform the above analysis, in addition to reading the PoS specification file and viewing the data of the beacon chain, it is important to do more work.

Learning from experience and actually staking, while actually running the Eth1 and Eth2 chains on the machines BitMEX controls, it is also crucial.

Therefore, BitMEX Research became a staker.

Go to BitMEX’s Official Website

Minimum Staking Requirements

BitMEX thanks the trading platform (BitMEX) for providing more than 105,000 USD (32 ETH * 3,300 USD) from the company’s assets, allowing BitMEX to obtain 32 ETH for staking.

The first thing to note is that $105,000 seems to be a big number, maybe too much, making the staking inaccessible. BitMEX has noticed some people in the Ethereum community complaining about this and discussing the idea of ​​lowering the minimum requirements. The huge dollar value is mainly due to the rapid appreciation of the price of Ethereum. However, the operating cost of the node is also quite high. If you consider the cost including bandwidth, it may require at least $2,000 per year. The benefits of running a validator can just cover this cost. Therefore, one can say that this high cost is necessary to reduce the risk of the verifier shutting down the machine. In fact, BitMEX believes that despite all the efforts and verification costs, from an economic point of view, it is not worthwhile to stake at a price far below $100,000. Therefore, BitMEX believes that lowering the minimum staking requirement is meaningless.

Open BitMEX’s Account

Geographic location

When setting up the staking client, BitMEX noticed that another key difference from Bitcoin PoW technology is that it encourages the use of data centers of large cloud service providers, which is also the model BitMEX chose. For PoW, large third-party data center providers can be used for block construction or mining pool services, but the actual hash calculation usually occurs in a special place. When experimenting, this is usually at home or in an office, and business operations often have a location close to the chosen energy source, or they can take up a lot of space in a data center where grid power is cheap. Therefore, the geographical diversification of PoW miners may partly depend on the geographical composition of energy assets. Regarding staking, BitMEX’s choice is simple. BitMEX chose a large cloud service provider, which is easier than trying to stake from a local device. If the staking goes offline, you will begin to be punished, which is unavoidable in other options.

From a certain perspective, this dependence on cloud service providers can be considered a weakness, but in other respects, staking may also be more flexible. The staking can be moved to another place, and the geographical distribution of staking clients is not even a special issue. Staking has no real important physical infrastructure and has no important economic connection with the real world or real resources. The key factor is of course the number of coins, which exist on the chain. Therefore, it is not appropriate to consider the geographic distribution of assets as for PoW.

On the other hand, it seems that there is currently no way to change the key associated with the validator account. Therefore, if people think that the cloud service provider has access to the key, it may be a bad idea to transfer to another provider, because once your If your account is hacked, you won’t know who you should be responsible for. So maybe the staking is trapped in the supplier of their choice, which is a weakness, at least until it becomes easier to change the key.

Go to BitMEX’s Official Website