When your secrets get compromised, bad actors will often put a sweeper on your account to take advantage of anything that happens to the address in the future — either you deposit ETH to try and save some tokens, an airdrop happens, or something else.

This article outlines how users get swept in the first place and three unique methods for rescuing any un-swept funds (like staked funds).

…

To read the full blog, visit “How to Beat an Ethereum Sweeper Script and Recover Your Assets.”

How to Beat an Ethereum Sweeper Script and Recover Your Assets was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

We’ve been using Medium as a communication platform since day 1 of our launch and it has provided a valuable service. However, we believe that every project should strive to eventually move away from that platform when able to.

Why?

Because a part of the goal of this entire cryptocurrency and blockchain industry is to get control back into our own hands, and that control includes the channels that we communicate through.

…

To read the full blog, visit “Moving Away From Medium.”

Moving Away From Medium was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

MyCrypto Memberships utilize Unlock Protocol - a tool that allows for unlocking content, memberships, and more via a smart contract and an NFT key.

An unfortunate side effect of using a smart contract function for our memberships, though, is Ethereum gas prices. At worst, the gas fees alone cost more than the 1-month membership does. This is no bueno.

As a solution to this and to further flesh out our sidechain support, we’ve just launched MyCrypto Memberships on xDai!

Get a membership now. 👈

You can still purchase a membership on Ethereum, if you prefer.

Holding a MyCrypto Membership on xDai is functionally the same as holding one on Ethereum; as long as the membership-holding account is connected to MyCrypto, your entire MyCrypto account will enjoy membership features.

What does a MyCrypto Membership give me?

• Membership Badge & Token
• Unlimited Protected Transactions
• Zero Ads
• Zero Sponsored Slots
• Stickers
• Shirts (must be a member for at least 3 months)

MyCrypto Memberships are a way to contribute to our continued development. It’s not only a way to support us directly, but it gives you the above features and more that we’re working on right now.

Site themes are on the roadmap for members. 😎

How do I buy a MyCrypto Membership on xDai?

Visit the MyCrypto Membership page and go through the simple flow for purchase. Make sure your xDai account is connected first via Add Account!

More Information

• MyCrypto Membership Information
• How to Buy a MyCrypto Membership
• How to Get xDai
• How to Connect an xDai Account to MyCrypto

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You Can Now Get a MyCrypto Membership With xDai was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

Sidechains like xDai are getting lots of attention from a mainstream audience, but unbeknownst to many, they’ve been thriving and growing for a while.

You’ve learned all about xDai and decided to try it out. Then, you were onboarded to the xDai network and set up your portfolio with MyCrypto.

What’s next? Let’s dive into some of the applications on xDai that you can use right now.

Nifty.ink

Nifty.ink is a simple concept and a great way to see the value proposition of xDai. Upon visiting the site, you’re met with an empty canvas that you... draw on!

When you’re done drawing, you can mint your art into an NFT on the xDai chain, after which you can keep it, bridge it to the Ethereum chain, or put it up for sale.

HoneySwap

HoneySwap is the go-to decentralized exchange on xDai. It’s a fork of Uniswap, so those familiar will understand what this platform is all about.

For those unfamiliar with DEXs, HoneySwap allows you to trade tokens for other tokens, or provide liquidity for token pairs. The upside of having this on xDai is that you get to trade tokens extremely fast, and extremely cheap, compared to Ethereum.

POAP

POAP stands for Proof of Attendance Protocol. This team has been around for a long time and originally started out by giving out physical badges at Ethereum community events as proof that you were there. You could then redeem a digital NFT version of that badge as well.

Now, POAP has fleshed out their digital offering (probably because COVID temporarily ruined in-person events) and anyone can now create and distribute POAP NFTs for their online events!

Dark Forest

We’ve written about Dark Forest before, and for good reason. It’s a space-faring, universe-exploring, real-time-strategy game that utilizes blockchain technology for some very cool game mechanics.

Every interaction within the game has an associated blockchain transaction. The game previously used an Ethereum testnet but has since transitioned over to xDai. Dark Forest is currently not in an active play session, but keep your ear to the ground for more information.

Reality Cards

Reality Cards is interesting. It’s a “hybrid of NFT art and prediction markets” and is currently live on the xDai Testnet.

The way Reality Cards works is that instead of voting on a “yes” or “no” outcome that a prediction market typically has, you rent the NFT associated with the outcome you think will happen. The longest owner of each outcome then gets the NFT for that outcome after the market resolves.

It’s funky, but sounds cool and is worth checking out.

Gnosis Products

Gnosis is a long-standing player in the Ethereum space and has a range of useful products.

Last year, Gnosis announced their investment into the xDai Ecosystem Fund and subsequent plans to develop xDai compatibility with their suite of products. You can now easily use the Gnosis Protocol, Gnosis Safe Multisig, and build on top of Gnosis’ Conditional tokens framework on xDai!

This is merely a sampling of some of the applications you can try on xDai. There are countless more, and a good list of those applications can be found directly on the xDai Chain website.

At the time of writing, there are nearly 80 individual projects listed there, so you know we’ve barely scratched the surface!

What do you like to do on xDai? Let us know on Twitter!

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What things do you do on xDai?What's out there for us to know about?! @xdaichain

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What Can You Do on xDai Right Now? was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

So you’ve learned about xDai in part 1, and now you want to try it out. Where to start?

Getting an xDai Account

Since xDai is based on the EVM (Ethereum Virtual Machine), any Ethereum account can also be used on the xDai chain. This means that if you have an Ethereum account, you also have an xDai account and can get started!

If you don’t have an Ethereum account or want a new one specifically for xDai, it’s going to be best to get set up with MetaMask because most (if not all) xDai dapps support it, and many other wallet applications don’t have proper consideration built out for networks other than Ethereum. Yet.

Note that you’ll have to add xDai as a custom network to MetaMask before continuing. The official guide for this is easy to follow.

Getting Funds Onto the xDai Network

There are two methods for getting cryptocurrency on the xDai network. You can bridge cryptocurrency that you already have from Ethereum (or from BSC, another sidechain), or you can use a fiat (cash) onramp.

Using an xDai Bridge

There are a few bridges that you can use to transfer crypto to xDai from another network.

• The xDai Bridge connects the Ethereum network to the xDai network and allows for the conversion of Ethereum Dai to xDai Chain xDai, and vice versa.

• The Ethereum Omnibridge is similar to the xDai Bridge but allows for the conversion of Ethereum ERC20 tokens to their respective xDai Chain ERC20 token, and vice versa.
• The Binance Smart Chain OmniBridge is currently in beta and allows for the conversion of Binance Smart Chain (BSC) ERC20 tokens to their respective xDai Chain ERC20 token, and vice versa.

Using a Fiat Onramp

There are currently two fiat onramps you can use to go directly from cash (fiat) to the xDai network. These can be helpful and offset the gas fees you’d pay if you were onboarding to xDai via a bridge. However, fiat onramps can be finicky, have tons of restrictions, and involve KYC, which can be a deal-breaker for some.

• Ramp Network is one of many fiat onramps in the industry but is seemingly the only one that directly supports xDai chain purchases. You can use Ramp to go from fiat to xDai within 40 countries using a debit card or bank transfer.

• The Mt Pelerin Bridge Wallet application also recently announced support for direct fiat to xDai chain purchases and should have a process similar to any other fiat onramp.

MyCrypto does not endorse any of the above applications. Please do your own research before interacting with any of these.

Once you have cryptocurrency on the xDai chain, you’re ready for the next step!

Connecting your xDai account to MyCrypto

If you want one place to view and manage all of your xDai accounts at once, you’ll want to get set up with MyCrypto.

MyCrypto is especially useful if you have Ethereum AND xDai accounts because you can view both at the same time without switching networks manually, even if you’re using one account for BOTH networks! 🤯

Step 1: Visit https://app.mycrypto.com/add-account/

Step 2: Select the wallet you’ll be connecting to MyCrypto. Note: click “View Address” if you only plan to track an account and not send from it.

Step 3: Select the xDai network from the dropdown. Note: If you’re using MetaMask, you will not see this dropdown and you’ll need to make sure you’ve selected the xDai network within MetaMask before continuing.

Step 4: Continue to connect, and check out your xDai account(s) on your MyCrypto dashboard, right alongside any other accounts you have!

As mentioned earlier in this article, you can use the same account for Ethereum and for xDai, so we’ve made sure to distinguish your accounts separately according to the network they’re attached to. Note the above screenshot where it shows two separate listings for one address — one used with Ethereum, one used with xDai.

You’re all done!

From here, you can view your balances and interact with MyCrypto features using your xDai account just like you would with an Ethereum account.

If you have a token that you aren’t seeing properly on your MyCrypto dashboard, please let us know so we can add it to our default list.

Coming Soon

Part 3: What dapps you can use right now on xDai! (spoiler: there are a lot)

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How to Get xDai and Connect to MyCrypto was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

This is a cross-post from the Ethereum.org announcement. It has been modified by the MyCrypto team to include additional information that we think is useful!

TL;DR

• Berlin is ready to be deployed!
• We’re moving fast: the first testnet to upgrade, Ropsten, is scheduled to upgrade on March 10th. Mainnet is scheduled for April 14th.
• If you are running an Ethereum node, you should upgrade it to a Berlin-compatible version ASAP for testnets and before April 7th for mainnet.
• See below for the list of Berlin-compatible client versions and details on the EIPs included in the upgrade.

Berlin Timing

After months and months of planning, Berlin is finally here! The upgrade, which follows the Istanbul and Muir Glacier upgrades, is scheduled to go live on the Ethereum mainnet at block 12 244 000. We expect this to happen around Wednesday, April 14, 2021, but because of block time variability, the exact date may change.

Prior to being deployed on mainnet, the upgrade will go live on the Ropsten, Goerli, and Rinkeby testnets. The entire release schedule is as follows:

• Ropsten: Block #9,812,189 — expected 10 Mar 2021
• Goerli: Block #4,460,644 — expected 17 Mar 2021
• Rinkeby: Block #8,290,928 — expected 24 Mar 2021
• Mainnet: Block #12,244,000 — expected 14 Apr 2021

Ethereum node operators should upgrade their nodes prior to the fork block on the networks they want to participate in. Due to block time variability, it is recommended to update several days before the expected date. See the section below for the appropriate client versions to upgrade to.

Client Versions

In order to be compatible with the Berlin upgrade, node operators will need to upgrade the client version that they run. The versions listed below for each client support Berlin across all Ethereum networks, both testnets and mainnet.

• go-ethereum (geth) 1.10.1 — Download
• OpenEthereum (f.k.a. Parity) 3.2.0 — Download
• Nethermind 1.10.31 — Download
• Besu 21.1.1 — Download

TurboGeth and EthereumJS will not have client releases ready for the first testnets, but will have a release prior to mainnet. We will update this post as their releases become availabe. Trinity is now deprecated and will not be supporting the Berlin upgrade.

What’s Coming To Berlin: The EIPs

The Berlin upgrade introduces the following EIPs to the Ethereum network. For an in-depth explanation on each, we recommend reading the Ethereum Cat Herders’ Berlin Upgrade Overview. Here’s a summary:

EIP-2565: ModExp Gas Cost

• Lowers the cost of the ModExp (0x00..05) precompile.

EIP-2929: Gas cost increases for state access opcodes

• Increases gas cost for SLOAD, *CALL, BALANCE, EXT* and SELFEDESTRUCT when used for the first time in a transaction.
• One reason transactions have a cost is to ensure the network remains available and usable and not full of spam. With today’s exorbitant gas prices, it’s hard to imagine things being “too cheap” but new research shows that a few of the core opcodes are indeed underpriced.
• By bringing the cost of these opcodes in line with the actual cost to a network participants, it reduces the likelihood that we see a repeat of the 2016 Shanghai DoS attacks.

EIP-2718: Typed Transaction Envelope

• Introduces a new transaction type that is an envelope to enable easier support for multiple transaction types.
• Currently all transactions are executed in the same manner: X ETH is sent to Y address with Z data and the sender pays a fee of GL*GP ETH based on that data. EIP-2718 gives all transactions a “type” — a category of sorts — so that transactions of one type can be handled one way and transactions of another type can be handled another way.
• This means that, in the future, fun features like someone else paying for your gas or multi-signature transactions can be added more easily—without creating complex compatibility issues with the default transaction type and with each other.

EIP-2930: Optional access lists

• Adds a transaction type which contains an access list, a list of addresses and storage keys that the transaction plans to access. This mitigates some of the gas cost increases introduced by EIP-2929.

EIP-1559 is NOT in this network upgrade and is slated for later this year.

• The highly anticipated EIP-1559 is not in this Berlin network upgrade.
• This is the one that’s been described as a mechanism to make gas fees more predictable by burning a portion of each TX fee, affecting transaction costs for users, income for miners, and inflation.
• It’s tentatively scheduled for the next network upgrade, London, which was originally slated for July but will likely come in Q3 or Q4 2021.
• To understand why this EIP is so highly anticipated, we recommend Eric Conner’s intro explainer, Vitalik’s recent post on the reasoning behind EIP-1559 and Trent Van Epps’ summary of the benefits, challenges, and misconceptions.

FAQ

Why “Berlin”?

After Istanbul, we ran out of names for our planned network upgrades. It was suggested to use Devcon city names for upgrades, and we stuck with it! Berlin is where Devcon 0 took place, and the next upgrade will be called London, where Devcon 1 happened.

As an Ethereum user or Ether holder, is there anything I need to do?

⚠️ This is important to note, as it’s likely there will be scammers attempting to use this network upgrade as an opportunity to trick users into losing their crypto.

If you use MyCrypto, there’s nothing you need to do.

You should not need to do anything if you use another web wallet service like Metamask, an exchange (such as Coinbase, Kraken, or Binance), a mobile wallet service (such as Coinbase Wallet, Status.im, or Trust Wallet), or a hardware wallet (such as Ledger, Trezor, or KeepKey). If you are being told to take action for this upgrade, please verify that it’s from that service’s official communication channels.

As a node operator or miner, what do I need to do?

Download the latest version of your Ethereum client, as listed in the table above.

This is applicable to anyone running an ETH1 node, including those who are running validators for ETH2.

What happens if I am a miner or node operator and I do not participate in the upgrade?

If you are using an Ethereum client that is not updated to the latest version (listed above), your client will sync to the pre-fork blockchain once the upgrade occurs. You will be stuck on an incompatible chain following the old rules and you will be unable to send Ether or operate on the post-upgrade Ethereum network.

What is a network upgrade in Ethereum-land?

A network upgrade is a change to the underlying Ethereum protocol, creating new rules to improve the system. The decentralized nature of blockchain systems makes a network upgrade more difficult. Network upgrades in a blockchain require cooperation and communication with the community, as well as with the developers of the various Ethereum clients in order for the transition to go smoothly.

What happens during a network upgrade?

After the community comes to an agreement concerning which changes should be included in the upgrade, changes to the protocol are written into the various Ethereum clients, such as geth, Open Ethereum, Besu and Nethermind. The protocol changes are activated at a specific block number. Any nodes that have not been upgraded to the new ruleset will be abandoned on the old chain where the previous rules continue to exist.

Thank You!

A big thanks to the Ethereum community and to all Ethereum developers across all clients and platforms who came together to provide input, thoughts, and contribution for Berlin 😁🇩🇪

Now, onto London 🇬🇧!

Disclaimer

This is an emergent and evolving highly technical space. If you choose to implement the recommendations in this post and continue to participate, you should make sure you understand how it impacts you. You should understand that there are risks involved including but not limited to risks like unexpected bugs. By choosing to implement these recommendations, you alone assume the risks of the consequences. This post and recommendations are not a sale of any kind, and do not create any warranties of any kind including but not limited to anything related to the Ethereum network, or the Ethereum clients referred to herein.

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Ethereum Berlin Upgrade Announcement was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

What is the xDai chain?

The xDai chain is an Ethereum-based sidechain that uses a Proof-of-Stake mechanism. It has been live since late 2018 and uses a stablecoin, xDai, as its native cryptocurrency.

As the project’s site puts it, transactions on the xDai chain are “very fast, very inexpensive, and require a single token (xDai).”

What is the xDai cryptocurrency?

This native cryptocurrency of the xDai chain has a price that’s pegged to the US Dollar, making it a stablecoin similar to USDC, Tether, and… the original Dai! Being pegged to the US Dollar is what makes the cryptocurrency “stable,” as it’s supposed to always be worth 1 US Dollar.

You don’t need to understand all the mechanics of a stablecoin to learn about xDai, but it’s never a bad idea to learn!

The difference between the previously-mentioned stablecoins and xDai is that the others are tokens that operate on Ethereum, while the xDai chain is its own separate network.

What is xDai STAKE?

The xDai chain employs a Proof-of-Stake (‘PoS’) mechanism for confirming transactions, which is newer than the common Proof-of-Work (‘PoW’) mechanism. Ethereum, as an example, is currently transitioning from PoW to PoS.

A brief explanation of PoS is that users deposit their cryptocurrency into the blockchain in order to become validators. The more validators for a blockchain, the more reliable and secure that blockchain becomes. For this purpose on xDai, there’s a token aptly named xDai STAKE.

You do not need xDai STAKE if you want to use xDai — it’s optional, and only necessary if you desire to be a validator or delegator.

Why would one want to use xDai?

The xDai chain is a good companion to Ethereum.

As we briefly mentioned earlier, transactions on the xDai chain are very fast and very cheap. A transaction on the xDai chain costs a few pennies and will confirm in a matter of seconds, compared to many dollars and likely many minutes on the Ethereum chain.

Simply put, if you’re being stonewalled by Ethereum’s gas fees or if you want to explore what else is out there, you can ⭐actually do things⭐ on xDai!

Many people are already using xDai because of this.
Many dapps are launching on xDai or implementing support for xDai.

We’ll get into those later.

Coming Soon

Part 2: How to get xDai and how to manage your xDai on MyCrypto
Part 3: What dapps you can use right now on xDai! (spoiler: there are a lot)

References

• https://www.xdaichain.com/about-xdai/faqs/xdai-chain-basics
• https://jaredstauffer.medium.com/what-is-xdai-how-do-i-use-xdai-a-simple-explanation-7440cbaf1df6#
• https://www.reddit.com/r/ethereum/comments/krlugs/xdai_a_layer_2_is_literally_the_3rd_most_used/

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What is the xDai Chain and Why Should I Try It? was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

MyCrypto has a list of tokens that it will automatically scan your address for, which is regularly updated.

If you can’t see a token when you access your account with MyCrypto, it’s because we don’t have it on our default list. This happens if it’s a token that’s new, updated, or something we are unaware of for whatever reason.

Any ERC-20 token can be added to your local MyCrypto interface by following these instructions.

If you are missing a token, click the “+ Add” button on the left-hand side of the interface, which will bring up the fields below.

Adding a Custom Token

To add a custom token, you will have to find the contract address of the token that you would like to add. You can use Etherscan to find this address.

Copy the Ethereum address that holds the token that you would like to add, and enter it on etherscan.io.

Click the token balance drop-down, and a list of tokens that your address holds will show up. Click the token that you would like to add to your MyCrypto interface.

Then, copy the contract address of this token, highlighted in red.

Enter the symbol (name) of the token in the Symbol field, the contract address in the Address field, and the amount of decimals of the token in the Decimals field. Make sure that the correct network is selected as well.

If there is an issue with adding a custom token, try adding it again but suffixing the name with -1. For example, MYC becomes MYC-1.

Click the Add Token button, and your custom token will now be shown in your interface. You can now interact with it like any other token.

If Your Token Shows No Value

When you add a custom token manually, it should properly display how many of that token is held within your account(s). However, a token will show a value of “$0.00” until we have that token added to our manual list.

If you see a token with a value of “$0.00,” feel free to reach out to us via Twitter DM or Email or Discord and we’ll add the token to our list so you can see the value properly.

How to Hide/Delete a Token

There are two options for removing a token from view. You can visually hide the token by clicking the (-) icon in your Balance Breakdown, but this will not delete the token from your LocalStorage — it will only hide it from view.

If you need to completely delete a token (to re-add it with proper information, for example), you’ll need to reset your database for MyCrypto via settings.

For more help regarding custom tokens or anything else, please visit our Knowledge Base.

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How to Add a Custom Token to MyCrypto was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

We’re live!

From now on, visiting https://mycrypto.com will take you to a new landing page. This will lead to the web app at https://app.mycrypto.com. (bookmark the app!)

What’s New?

Manage your ETH accounts in one place.

You likely have multiple ETH accounts. A hardware wallet or two (you better have a damn hardware wallet), a few MetaMask accounts, and probably a mobile wallet that uses WalletConnect.

You can now connect all of these to MyCrypto, and they all persist.

The best part is that it’s not just view-only — you can actually manage your accounts directly from your dashboard.

Your Dashboard is the bridge of your ship.

Your dashboard is where you’ll spend most of your time on MyCrypto. It displays your accounts, balances, transaction history, and more.

You can take action on your accounts directly from this page or use the navigation along the left.

Protect your transactions.

Whenever you send a transaction, you should pause and make sure everything looks right. Protected Transactions is a new feature that will do the work for you; we’ve teamed up with Nansen to deliver information about who you’re sending to each time and give you some peace of mind.

Protected Transactions is free for all users at this time — give it a try at https://app.mycrypto.com/send.

Become a member.

MyCrypto Membership is a great way to support our future developments and to upgrade your MyCrypto experience. Right now it delivers an ad/sponsor-free experience and rewards you with physical swag.

We’re actively working on new features for the membership suite, including themes. More on that soon.

Complete your action items.

Over the last few months, there’ve been countless airdrops and token migrations, many of which are relevant to you. We developed a tool to help you complete these actions without leaving MyCrypto, and we’ll let you know what actions you need to take among your accounts.

Additional Updates:

• Transaction History — One combined transaction history across all of your accounts.
• Export/Import MyCrypto settings — Take your local MyCrypto settings with you and import them when you’re using a new device/browser/etc.
• Address Book — Every account you interact with is noted in your address book. They’re labeled “Unknown” by default, and you can edit their names and labels for your own record-keeping convenience.

Frequently Asked Questions

Need a demonstration?

Demo Mode is now available. Feel free to try it out and see what a full dashboard looks like before you add your own accounts. To access Demo Mode, visit https://app.mycrypto.com/add-account in a fresh browser.

Why a slow rollout?

There are a lot of big changes between this new version of MyCrypto and the one being launched now — to respect that, we’re rolling out slowly to make sure we can react quickly to any bugs that we may have missed! That being said, if you visit MyCrypto and don’t see the new version yet, you can skip the wait and go directly to https://app.mycrypto.com.

What about the MyCrypto Desktop App?

The MyCrypto Desktop app remains one of the most important parts of the MyCrypto toolset, and is available for download here.

The upgrades that MyCrypto’s web app has seen are not currently reflected in the desktop app because we’re working on something that’s even better. We’ll have more to share about this in the near future.

Is my privacy retained?

Yes. MyCrypto doesn’t store any of your information, addresses, settings, or anything else. Your accounts are persistent, and that’s because they’re stored on your end in your browser’s LocalStorage. The only time your address is touched or transmitted is when you submit a transaction to the blockchain through one of the nodes we use. Read our Privacy Policy for further info.

When Dark Mode?

Moon* Mode Soon™

Your feedback is extremely helpful for us to continue building things that you want. If you have any questions, comments, suggestions, or if you find bugs, please message us! support@mycrypto.com. ❤

>> Visit MyCrypto now.

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The New MyCrypto is Here. was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.

November 4th saw the deployment of the staking deposit contract, which required a minimum of 524,288 ETH for a successful launch of the first phase of Eth2 on December 1st. This threshold was met, and the launch (genesis) of the beacon chain went smoothly. More than 1,000,000 ETH has since been deposited for staking.

Congrats on the launch all!

We previously published a glance of how Proof of Stake works in our ETH2.0: Everything You Need to Know article, which we highly recommend you read first, that covers a wide range of topics within Eth2 and should give you a good foundation for what we detail here.

With so much ETH already being staked at this time, you might be inclined to get started with staking as well. However, is staking at this moment in time a good idea? And what are the risks involved? The following is included in this article:

• What is staking?
• Should I be staking?
• What are the risks, and how can I get started?

What is staking?

Right now, Ethereum works with a proof-of-work (PoW) consensus mechanism, just like many other blockchains, such as Bitcoin. In this system, miners perform difficult mathematical tasks in order to form blocks and mine transactions.

This process is insanely resource-intensive and consumes an enormous amount of electricity. Proof of stake (PoS) tries to solve these issues, aiming to provide even more decentralization than proof of work is currently able to achieve.

With staking, so-called validators keep an eye on the network and propose new blocks in which transactions will be included. These validators work together to keep the network as secure as possible, and any bad actors will be penalized by having their stake “slashed.” Slashing is a mechanism by which part of someone’s stake will be removed if they deliberately try to attack the network, and in the worst case, even one’s full stake (up to 32 ETH) can be slashed.

For more information regarding the differences between PoW and PoS, and the various other new exciting things that are introduced with Eth2, I highly recommend you to read our ETH2.0: Everything You Need to Know primer.

What is the genesis event?

The genesis event occurred on December 1st, and refers to the creation of the first (genesis) block of the beacon chain. This means that the first phase of Eth2 succeeded and that the validators can propose new beacon chain blocks.

These validator clients will be working on keeping the beacon chain running smoothly. Now usually, the beacon chain is there to keep track of all the shard chains (see primer) in the network, but these are not yet implemented in the current phase of Eth2 and are expected to launch at a later stage.

So the validators maintain the beacon chain, but what is its purpose right now? At this time, not a whole lot. The beacon chain itself doesn’t actually do anything for the time being, but it’s a crucial foundation for the rest of Eth2 updates to come. If this foundation proves stable and functions well, future upgrades will have a much bigger chance of succeeding.

Should I be staking?

Withdrawing your staked ETH and staking rewards will not be possible until Ethereum has fully transitioned to proof of stake.

This might take until 2021 or 2022, or even later than is currently anticipated. Withdrawing will only be possible once future upgrades are deployed to the network during an upgrade called “docking.” To allow the Ethereum network to “dock,” firstly both phase 0 and phase 1 will need to be deployed, which will allow beacon chains and sharding chains to operate with each other. Phase 0 has already just launched, and phase 1 is expected to be launched in 2021.

Docking is also known as phase 1.5, and only then will the Ethereum network as we know it be able to transition to a full proof-of-stake system, managed fully by the validators, beacon chains, and sharding chains. The Ethereum network as we know it today will become its own shard within this new system.

You will have to make the decision for yourself whether you are in a comfortable position to stake your Ether for this amount of time, especially when it’s still unclear when in the future you will be able to withdraw.

Can I make money from staking?

By participating as a validator, you will be able to receive awards for your efforts, just like with mining. The amount of ETH that you can expect to earn will depend on the amount of ETH that is staked in total. The less ETH that is staked by the ecosystem as a whole, the higher the rewards for individual stakers will be on a per-year basis, and vice versa.

The Eth2 Launch Pad has a nifty tool that allows you to see what kind of returns you can expect based on how much ETH is staked in total.

For example, if 1,000,000 ETH is locked up for staking, you can expect a yearly return of 15.7%. Keep in mind that even though you will be able to receive rewards, you will not be able to withdraw these until Ethereum has fully transitioned to proof of stake.

The benefit of the staking mechanism, as opposed to mining, is that you are not required to invest in expensive hardware and high electricity costs. Anyone could become a validator as long as they have the minimum amount of required ETH to stake and can keep their validator client up and running.

What are the risks?

First of all, you need to keep in mind that your ETH will be locked up, therefore illiquid, for an indefinite amount of time.

Second of all, staking requires you to maintain a bit of infrastructure, namely your validator client. Stakers can face being penalized if they aren’t able to keep their validator client up and running consistently enough. You might have to try and keep your client running for years, which is not a small commitment.

If your client is offline, you will lose roughly the amount of money that you would’ve been able to earn in that timeframe if the client was online. This means that if you were set to earn X amount of ETH in a set period, you would instead be penalized roughly that amount instead.

You can avoid this by joining a staking pool, in which the validator client and infrastructure will be maintained for you by someone else. However, this brings other risks along with it, as you might have to give up custody of your assets, so another party can handle the staking process for you. If the staking provider is not to be trusted or gets hacked, you might end up losing your funds, as we’ve seen countless times before with cryptocurrency exchanges.

Some popular exchanges are already introducing the possibility of staking ETH on their platforms, such as Coinbase, Kraken, and Binance.

Additional, indirect risks with ETH2 are the potential for new scams to pop up. When the ETH2 contract deposit address was revealed, a handful of mimics appeared shortly thereafter.

Misspelt depositcontract.eth and found a hit pic.twitter.com/DnQyQB6wT8

There will be many more ETH2-related scams that appear as the development progresses and releases occur, and you’ll need to look out for those. The most important thing you can do is always verify everything at the source.

How can I stake?

To get started with staking, you will firstly need 32 ETH. This is not a small amount, and is equal to roughly $19,000 at the time of publishing this article.

However, you can still participate with fewer funds by contributing a smaller stake to exchanges that have staking functionality, or by joining a staking pool. You can find a list of these pools here, but do keep in mind that you have to do your own due diligence to find whichever pool works best for you.

If you would like to stake 32 ETH, you can head over to launchpad.ethereum.org to start the staking process. This will require you to run an Eth2 validator client, such as Prysm, Lighthouse, Nimbus, or Teku.

Conclusion

The decision of whether to stake or not isn’t an easy choice to make at this time, and there are lots of different factors to keep in mind when choosing to do so. If you are comfortable with not being able to access your stake for most likely years, and you are confident that you can keep your validator client running for all that time, you might be able to earn a decent profit with the staking rewards.

It’s not an easy choice for now, and I would highly recommend you to continue reading about this topic to make an informed decision. You can find a great amount of information on the official Ethereum website. The knowledge base maintained by beaconcha.in is also a great resource, albeit a bit more technical.

To get started with staking, you can visit Ethereum’s staking launch pad.

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ETH2.0: Staking for Starters was originally published in MyCrypto on Medium, where people are continuing the conversation by highlighting and responding to this story.