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The first mission of the Eth2 validator launchpad is to make it possible and simple for its validators to educate themselves about all aspects of the process.
According to their official statement, they decided to release this now so in order to enable their users to keep the track of, and make deposits into, the upcoming Medalla multi-client testnet. However, the crew pledged to continue to fine-tune the interface in the run-up to mainnet launch.
The idea behind the launchpad is to make the process of becoming an Eth2 validator as simple as possible, without negotiating on security and education.
In contrast to using a third-party service, running your own validator comes with the responsibility of managing your own keys. This responsibility comes with an inevitable agreement between ease-of-use, security, and education.
Eth2 Validator Launchpad Aims
The first mission of the launchpad is to make it possible and simple for its validators to educate themselves about all aspects of the process. The company says that more than anything, they want to make sure validators know what they’re doing, and why they’re doing it.
Eth2 is the next generation of Ethereum, and even calling it Ethereum is a bit of a misnamed file – it’s an entirely different project, with a new zero-to-one paradigm for how blockchains can operate at scale.
The goal of Eth2 is to improve the scalability, security, and programmability of Ethereum. Instead of 15 TPS on a single chain, Eth2 will process thousands to tens of thousands of transactions per second (or possibly more) without compromising on decentralization.
It could be said that Eth2 will introduce a more economically secure consensus mechanism called Proof-of-Stake (PoS), in contrast to the Proof-of-Work (PoW) system that’s currently used in bitcoin and Eth1. In a traditional PoW blockchain (like Bitcoin), new Bitcoins are minted and transactions are processed by miners, individuals and institutions who use expensive hardware to solve very difficult math puzzles.
Miners give security to the network in exchange for inflation and transaction fees. In a PoS blockchain (like Eth2), to comparison, new Ether is minted and transactions are processed by validators, who offer security to the network in the way they are locking up their Ether. In effect, the security provided by validators is rebooted by and unforeseen on the value of the network itself. If a validator doesn’t act right (for example by approving a malicious transaction), their Ether can be slashed. This slashing mechanism gives validators a large incentive to follow the rules of the protocol.
Decide Whether to Run Validator or Not
Be it as it may, before deciding whether to run a validator, it’s important to have a good take on the number of rewards someone expects to get.
For example, it should be noticed that rewards are not fixed, but dynamic (a function of the amount of ETH staked in the network). That means that if the total amount of ETH staked is low, the annual reward is high, but as the total stake rises, the reward received by each validator starts to fall.
Once you feel you have a good overlook of the mentioned concepts, you’re ready to start the signup process. The first part consists of a series of statement pairs – a piece of information followed by an acknowledgment of the form “I understand this piece of information” – that can be broadly divided into three categories: risk, responsibility, and security (although there is some overlap between all three).
The eth2 network can only work optimally if validators get their responsibilities right and understand all the risks that are involved. User’s slashing risks are, as well as the inherent risks involved with being an early adopter.
The user will only receive rewards if actively participating in consensus, and that this process is non-reversible (he won’t be able to transfer your staked ETH out of eth2 until much later).
In contrast to joining a staking pool, running your own validator comes with the responsibility of managing your own keys. All keys are derived from a unique mnemonic, and funds cannot be withdrawn without access to this mnemonic.