SPEAKER_00: 0:00

Hey there, Crypto Curious gang. It's time to plug in and play with the blockheads at BlockCast. Strap in for a weekly whirlwind tour through the blockchain jungle, where NFTs, shiny coins, and crypto titans tango. Serve that with a side of spicy insights and the crunchiest bits of the digital sphere. Let's dive into the decentralized deep end. BlockCast is live in 3, 2, 1.

SPEAKER_02: 0:35

Hey guys, welcome back to another episode of Blogcast. Thanks for tuning in this week. I'm very excited to bring on a guest on the show, Samuel Chong. He runs a platform called Stakersaurus. He's going to tell us what it's about, what is ETH staking, and why we should all get involved. And along with me, we have... GMGM, your hua kuih of broadcast over here, bringing you the latest crypto content. But today, we have a special guest, Sam, to share with us ETH staking.

SPEAKER_01: 1:07

Hi, everyone. Thanks for having me. I'm excited to share... more about Stachysaurus and e-staking.

SPEAKER_02: 1:12

Hey Sam, so what exactly is Stachysaurus and perhaps could you tell us a little bit about your journey and what led you to this, to doing this?

SPEAKER_01: 1:22

For sure, for sure. So Stachysaurus basically helps people, individuals in Southeast Asia become solo node operators. And in doing so, we are growing a grassroots community of solo node operators in this region. We have a dual mission of improving and strengthening the the decentralization on the Ethereum consensus layer and also at the same time to leverage on the skill set of blockchain node operations to improve the lives of the less privileged in Southeast Asia. So my journey with running Ethereum validated nodes as a solo staker began actually all the way back since 2017. I remember the first day I bought my first Ethereum was the first day of 2017 and it was when myself and two other three other friends caught up in a food court of Tampines Mall. And we were just debating about the role of Bitcoin and cryptocurrencies in the wake of the financial crisis just a few years back. And then we thought that we were too late to Bitcoin. And hence, we looked at the second biggest, which was Ethereum. And they were fresh out of the ruins of the DAO fork and the DAO hack. But what really got us interested was the concept of smart contracts and then how they were moving towards POS or proof of stake, even back then, and how anyone could participate in concept of mining or block validation back then. So it meant that anyone could make a living, make a decent income, going towards a universal basic income kind of concept by participating in Ethereum. But because I didn't have a technical background, so it took me a long time. I began earnestly in trying to study how to run my own infrastructure. at the end of 2020. But it wasn't until the start of 2022 that I had all the necessary knowledge plus the confidence to launch my own home-based validator and put my own batch of Ethereum tokens into my own setup.

SPEAKER_02: 3:25

Right, right. But before you came to this, you were, if I'm not mistaken, in the VC space?

SPEAKER_01: 3:31

Yes, yes. So that's very interesting. So I did not have a technical background. So I spent instead the last five years doing early stage tech investments in Southeast Asia with a VC fund called TMB Aura. And some of the more notable names that we invested in in Singapore would include the likes of Prism Plus, the displays and monitors brands. In Singapore, there's also, you know, Gouache Paints. They're one of the only anti-VOC. VOC is the harmful substances emitted by paints and coatings. They're one of the only, all the only anti-VOC paints players out in the market. Right, right. Yeah. Okay. But Ethereum has always been my personal passion project and I've always wanted to you know be more hands-on and contribute directly and yeah so it was my passion project while I was still doing my full-time job in VC but earlier this year I decided to take a leap and kind of double down on building out this passion project of mine

SPEAKER_02: 4:30

right okay but what exactly is ETH staking you know is it any different from you know staking offered on centralized exchanges or similar platforms and you know there was a also a lot of discussion about changes coming to ETH staking with the Shanghai upgrade, right? Maybe that prompted some changes or like, you know, so maybe you can take us through all that.

SPEAKER_01: 4:52

Sure, sure. So to start from the top, ETH staking is basically a way for network participants on the Ethereum network to put their assets at stake to vote for valid and honest transactions. And at the same time, this provides security to the network. So these such network participants are called a validators and in layman terms validators basically process transactions for the users on the ethereum network and ensures that these transactions are set in stone once they have been processed so since the uh the merge happened in september 2022 ethereum no longer relies on the proof of work to achieve consensus among participants but they they instead rely on proof of stake which is where the the original term of staking the original concept of staking comes from right right okay yeah So the Shanghai upgrade, one of the major features of the Shanghai upgrade was that it allowed proof-of-stake stakers. Previously, people who ran validators, who staked via pooling platforms, spun-out validators, they could not withdraw their staked ETH. So the Shanghai upgrade basically allowed anyone to come and go freely. So now, if you want to enter, maybe you wait like... two days at max 48 hours. And then if you want to withdraw, I think within three to five days, you'll get your ETH back in your wallet.

SPEAKER_02: 6:15

Okay. Hockwee, you also said that you have tried your hand with this platform. Yeah. So I'm very interested in e-staking. So that's why I was talking to Sam. And apparently he's been sharing a lot on his Twitter account and very knowledgeable. So I asked him to come and share a little bit

SPEAKER_01: 6:33

more. Thanks for checking it out.

SPEAKER_02: 6:36

So to clarify this is that at the start of, from what I understand, you shared earlier. So there was a period of time when we staked ETH. We cannot withdraw that ETH. That's correct, right?

SPEAKER_01: 6:47

Correct.

SPEAKER_02: 6:47

That was in 2020.

SPEAKER_01: 6:49

Yes, I believe it was that end of 2020, that was when you could stake ETH natively on the protocol level. This is, of course, there are other platforms where you can do like borrowing and lending, but those are not proof of stake staking. Those are just CD5 lending and borrowing.

SPEAKER_02: 7:05

Yeah. Okay. But that period of time, I just want to give our audience some context. So during that period of time, ETH was still POW. That was before the...

SPEAKER_01: 7:14

Yes, before the merge. Yeah,

SPEAKER_02: 7:15

before the merge. And there was yield to it, so when you stake. Correct. So now for POS, after the merge, the Ethereum becomes proof of stake and now when we stake it, we still earn yield plus because of the Shanghai upgrade, it is now available to withdraw. Like you say, maybe two,

SPEAKER_01: 7:32

three,

SPEAKER_02: 7:33

five days. Oh,

SPEAKER_03: 7:34

okay.

SPEAKER_02: 7:34

So for users like us, what are the staking options and what are the yields that we are looking at? I understand you advocate for slow staking and I'm interested in slow staking because I like to tinker around and I have an MCU, I mean I have a machine been ready that's why I like to tinker around so just wanted to also hear from you what are the different options of staking if staking so it can come from CEX all the way to LSD or home staking

SPEAKER_01: 8:03

yeah sure so in the first place the yield comes from transaction fees that are paid by users and also issuance by the protocol itself and on the other hand if you are performing dishonest behaviors then and you will be penalized by having your staked assets slashed. So the different types of staking, you can think of it on a spectrum of decentralization. And on the least decentralized side, you have the centralized exchange based staking. You have the likes of Coinbase, Binance, blah, blah, blah. These guys take custody of your assets. And then on the back end, they will spin up validators either on their own or they will delegate to an institutional node operator. These guys are the likes of Block Payment, or Figment, or Kiln, or Steakfish, whichever. But at the end of the day, the yield still comes from transaction fees paid by users and issuance by the protocol. So then as we move up on the decentralization spectrum, you have smart contract based staking or pooled staking. Under this model, you have more control and more custody. You're supposed to have full custody of your ETH stake of your assets, but then you are still subject to risks like smart contracts, exploits and bugs, and you're subject to governance risk, which leads to some level of counterparty risk. there is governance risk is because smart contracts are not set in stone at least most of them are not set in stone today they can be upgraded if you know a certain number of signatures have signed off on changing the rules of the smart contract so there is some risk there but of course these staking pool staking players they have reputational capital at stake as well so they would not under the normal course of business defraud their own customers and users. But if you're paranoid and very neurotic like me, then you go all the way to the end of the decentralization spectrum and you do solo staking. With solo staking, basically no one can rock you. You have full control of your hardware, you have full control of your stake ETH. No one can censor you even if they wanted to. So this is the difference here. And the decentralization spectrum can also be seen as a risk spectrum. So the less decentralized you are as an option to stake, then you're exposed to higher risk. And then the more decentralized the option is, you have lower risk. Right.

SPEAKER_02: 10:39

Oh, okay.

SPEAKER_01: 10:40

Having said that, there is a benefit to participating in pooled staking models because, number one, there is a stable and a variable segments of rewards as Ethereum validators. The stable rate is around maybe 2.4 to 2.6%. This is issued directly from from the Ethereum network itself, from the protocol. And you think of it as like inflation. And then the variable part are the transaction fees that are paid by users. So depending on the point in time where you proposed a block, the transaction fees you get could be different from others. So to give you some example, I think a few months back, there was a very lucky individual that got 500 ETH worth of block rewards. oh wow became an instant millionaire yeah yeah and it it was issued i believe to a solo staker and and what pool staking does right is that it smooths out all these variable lottery kind of rewards and distributes to everyone so the net effect is the the average yield is higher if you go through pool staking yeah but you lose the lottery aspect of it

SPEAKER_02: 11:49

okay So just to recap, it's a spectrum of decentralization, right? So I can stick with CX, but to hold my ETH, I can withdraw. But still, there's a risk that if the CX goes down, bye-bye to my ETH. Then we can go to the pool, but that will be a smart contract risk. And also very much dependent on which pool we are joining, right? So if the validator runs, then game over, my ETH.

SPEAKER_01: 12:16

Then

SPEAKER_02: 12:16

finally, we have the solo staking, which we have a complete control but that on a certain level we require more technical knowledge because then there's another concern or rather there's another point is that I can see like being a solo staker you have the luxury element because you will be getting the execution reward which is also the variable reward correct and the consensus reward is the one that is the inflationary

SPEAKER_01: 12:41

yes

SPEAKER_02: 12:42

how about the part where we need to commit 32 ETH that is only valid for solo staking I mean all the less decentralized options we are able to, you know, even to even commit one ETH.

SPEAKER_01: 12:56

Yep, yep. No, you're absolutely right. So, the other benefit of going through smart contract models of staking is that you don't need a full set of 32 ETH to start putting your assets to work. And it's because they pull individuals from everywhere and then, but they still need to reach batches of 32 or multiples of 32 before they can spin up a single valid, a new validator key. Yeah, so you can get started with, with lower amounts and you don't have to bother about like you know the hardware maintaining the hardware learning the skill set and all that but at the same time you're giving up control to a large extent and the good thing for solo stakers or aspiring solo stakers now is that you can get started with less than 32 ETH examples of these will be you know use Rocketpool I think the it should be around 10.4 ETH to get started now and then you have the likes of Stata 4.4 ETH you can get started and then now there's even a diva staking yet to launch but once they launch the minimum amount required should be one ETH and then the platform diva staking will match you with the remaining 31 ETH so this is a trend where more LSD players LSD means like the smart contract based staking players will come up with more and more innovative solutions to lower the financial barriers to entry so it's never a better time to be a solo staker to learn this skill set because now you'll soon be able to get the best of both worlds

SPEAKER_02: 14:18

yes so So I think this is a good segue to the gist of the podcast because earlier on we gave an introduction, right? And I also think that it is because by lowering this barrier, that means you can solve like solo stake or group stake or whatever you can call it, cluster stake, but you don't need to commit the full 32 ETH. I mean, in the long run, if it's bullish enough, then it will be a very crazy price for Ethereum. That 32 ETH will be worth a lot more. So you mentioned some protocols that enables this like StataLab and RocketPool and

SPEAKER_01: 14:53

Diva. And even Lido, you know, you see in their governance forums, right, that they're proposing opening up their validator set or the node operator set to include solo stakers or community stakers as well.

SPEAKER_02: 15:07

So for this, for what is the typical operations or the things we need if, let's say I'm interested, what is the machine specs that we are looking at? For example, example, RocketPool, you need to commit, you commit RE but you also need to buy RPL. So maybe you can walk us through, you can use either one of the protocols as an example.

SPEAKER_01: 15:29

On the hardware level, the basic set of hardware you need will cost around$800 USD or maybe slightly above$1,000 SGD. And that is enough to run even minority clients. Minority clients are basically the validator software, choice of validator software that you choose to run your validator on. And without going too deep into it, the best practice is to always choose a minority client, an implementation that does not have majority market share. So with just$800 USD or 1000 SGD, you can get started on the hardware. Now, electricity costs around 100 SGD or maybe 85 USD per year. So it's so negligible and so accessible to the everyday person. If you want to participate using RocketPool or Stata, then you do need exposure to another asset class other than ETH. And for RocketPool, for example, is the RPL token. And RPL token basically serves as an insurance policy of sorts. to ensure that the node operators of RocketPool perform the duties well. Maybe the utility has changed, right? I'm not too far up to date on that. But you need to buy both ETH and you need to buy an RPL in order to spin up a RocketPool node. And for Stata, it will be ETH and the SD token.

SPEAKER_02: 16:48

Oh, okay. So it's like you need to hold the project, the protocol token, and of course, and also the smaller amount of ETH.

SPEAKER_01: 16:56

Yeah. And to your question on like the minimum system requirements it's very accessible so on the CPU side your Intel i5 is sufficient if you want have better performance you can go for the AMD series the 5600 series RAM you need 32GB SSD you need an NVMe at least 2TB and then what else let's see you need backup power supply just get a cheap one just to prevent power surges and blackouts from harming your hardware

SPEAKER_02: 17:28

I saw your tweet Like recently you got affected, right?

SPEAKER_01: 17:32

Correct, correct. Yeah, yeah. The lightning storm yesterday. And then I was just thinking about it. I was like, okay, when is the blackout going to come? Then right after that, the blackout.

SPEAKER_02: 17:42

So I just want to bring back one point earlier on is that you say if there's any malicious actor or situation like this where you get blackout and you have no backup power supply and you incur this penalty called slashing, is it?

SPEAKER_01: 17:56

Ah, okay, okay. So slashing is actually very rare and very difficult to happen if you just go offline your power goes off your internet goes down you won't be slashed you'll be penalized to a very minimal extent and if you are offline for an hour you would have recouped all your losses by the next hour so it's as minor as that when you be slashed right is if you are very negligent or very fraudulent negligent in the sense that if you somehow spin up two instances using the same invalidate the key. the same private key, then what will happen is you will end up signing the same transaction twice. And then at that point, then the network thinks that you're trying to change the blockchain's history. And then that's when you'll be slashed.

SPEAKER_02: 18:45

I see.

SPEAKER_01: 18:46

Yeah. And another way you'll be penalized very heavily to the extent of slashing is that you go offline together with a large portion of the network. For example, AWS has 12.5% of market share of all Ethereum validators a day. If somehow there's a company-wide AWS outage for an extended period of time, let's say maybe a week, then everyone will be penalized very heavily. Everyone who used AWS to run their validators will be penalized very heavily.

SPEAKER_02: 19:16

Ah, I see, I see. Because from your experience, right, Dacosaurus, you're helping people. What is the numbers, like the ROI we are looking at? So we have a thousand SYNC for the machine, maybe a hundred a year, right, for the bill. That's a thousand, one But API right now for ETH staking is 4%. So assuming I join Rocketpool, aside from the RPL, do you think it makes sense from a staker's perspective?

SPEAKER_01: 19:45

Let's think about it from vanilla solo staking first.

SPEAKER_02: 19:49

The

SPEAKER_01: 19:50

feedback period given the 4% APR today is around 4 to 5 months to break even on the hardware. The payback on the hardware, sorry. Then everything else above that is gravy. Now, if you want to use things like RocketPool, Stata, or even Diva, then the payback period extends, fortunately. Because even though you're taking fees from the matched ETH, like you put 4 and then they match you with 28, but the absolute income that you get is still lower than if you were to stake 32 of your own ETH. So, you're right. The ROI model still needs some work to encourage solo stakers to purchase chase hardware and then put four ETH or eight ETH in the hardware and then have the project match them with the remaining. Having said that, I think the way forward for this, right, to encourage solo staking would be then for Ethereum-aligned projects to start offering or providing hardware grants to solo stakers because having an increased amount of solo stakers will benefit everyone.

SPEAKER_02: 20:50

Yeah, I followed that tweet and I went to Google the Ethereum Foundation hardware grant.

SPEAKER_01: 20:55

Yeah, yeah, correct, correct. The run-of-the-node grant.

SPEAKER_02: 20:58

Yeah. by the way anyone listening that is closed I have to wait for the next opening

SPEAKER_01: 21:03

yeah yeah but I would say that it will make sense for more projects to do these grants and even for myself I'm working with few organizations and even like universities in Southeast Asia I mean nothing is confirmed yet to provide these grants for their students and then create like a curriculum like a learning platform for their students you know to pick up this skill set

SPEAKER_02: 21:25

yeah actually it's quite fun if you can tinker around and really see where the yield and how are you contributing to the Ethereum network and security I just want to add on like on top of the machine price that we are talking about personally for me i have two machine i have another one that is a mac mini it's a super old mac mini but i upgraded the ram and also upgraded the ssd to 2tb it's a 2007 i think

SPEAKER_01: 21:56

wow

SPEAKER_02: 21:57

i don't know 2017 2017

SPEAKER_01: 21:59

so

SPEAKER_02: 22:01

i mean if you are hardware not like thinker or builder and you're like this kind of stuff, sometimes you can get it less than 1K. I mean, you can use a very old Mac Mini. Because I believe that one thing that all the client the ethereum staking client are pushing for is on the hardware side the cpu is not much of a consideration correct you can actually use an older machine but the ram and the ssd is the key

SPEAKER_01: 22:27

the the ssd is a key actually okay okay auto net cpu if an intel i5 works right then it's as minimal as it gets ready

SPEAKER_02: 22:36

yeah mine was an i5 okay cool so i think we know that older machine works but there's a minimum spec to it but if you want a machine that's like a thousand exactly price hundred

SPEAKER_03: 22:47

yeah that's

SPEAKER_02: 22:48

right then we move to the next part where we look into this and from another point of view where i want to talk about statewide

SPEAKER_03: 22:56

right

SPEAKER_02: 22:56

is that i don't need to be a operator I can stake with operator. Can you explain how

SPEAKER_01: 23:03

does it work? Yeah, yeah, yeah. Okay, so this StakeWise V3 module is one of the most exciting things for solo stakers today. And just to give some context, StakeWise, I think, if I'm not wrong, they were one of the first few staking as a service or smart contract-based staking players back in the day, together with Lido and another one that I just can't remember. Anyway, the V3 module basically allows anyone to spin up their own staking pool on top of their own infrastructure, which means solo stakers can now open up their infrastructure, their hardware, the$1,000 hardware, to allow everyone, anyone to stake ETH with their own hardware and then Once it reaches multiples of 32, a new validator key will be automatically spun up and this batch of 32 if will be put to work.

SPEAKER_02: 23:52

So for example, like I'm running a machine, a validator machine. Tim can, quote unquote, deposit his if with me.

SPEAKER_01: 24:01

Correct.

SPEAKER_02: 24:01

Let's say he has 16, I have 16, then together we can go in

SPEAKER_01: 24:04

as 32. Or I have 16, he has 16, you have none. And then you can spin out a validator key through this method as well. So essentially, you... as a solo staker don't even need any ETH to get started. Let's take BlockCast or BlockHead for example. What this module opens up as a possibility is something that I like to call stick to subscribe. So imagine if you have a bunch of followers today.$10,000. And you want to start monetizing your podcast. You want to pay all the premium content. So now instead of your users, your customers paying a subscription fee, they can instead stick a minimum amount of ETH into your creator-branded vault to get access to premium content of BlockCast.

SPEAKER_02: 24:53

How does the premium content work? Because I put five ETH with BlockCast, who is running the operation of validation.

SPEAKER_01: 25:02

yeah

SPEAKER_02: 25:02

how is he going to send me that exclusive content

SPEAKER_01: 25:05

yeah yeah okay yeah so let me let me clarify the paywalling mechanism is a feature that is yet to be built but I believe it's quite trivial for people to come in and build on top of it what's interesting is for this statewide module is that anyone can spin up their own liquid staking pool and allow their followers or their community to stick with them instead of someone some other pools that they don't know

SPEAKER_02: 25:29

ah I see so from my point of view statewide wise actually reduce the time for me to break even when i am a small sticker that's how i see it because i so let's say i have eight or i have 16 then you put eight team put eight i become 32 we go in by the same time my machine price is fixed my exit bill is estimated already and i get a small commission out from both of you correct

SPEAKER_01: 25:56

yes that's correct

SPEAKER_02: 25:57

therefore the timeline to break even shortened

SPEAKER_01: 26:00

it won't be shorter than if you stay 32 ETH of your own. You're putting a larger amount of capital to work.

SPEAKER_02: 26:07

I

SPEAKER_01: 26:07

see. But what can happen with this as well is that if you have 32 ETH on your own anyway, or you're using, say, RocketPool A plus 24, then you can run the statewide service on top of that on the same device and then the statewide device will allow you to pull ETH from everyone else to spin up say the next 32 ETH or C4E or like whichever multiple. It depends on how much TVL you can attract on your own.

SPEAKER_02: 26:37

Ah, super. That means you are already running. Now you're opening up the same machine. Correct. Other people join in. Yeah. And this is like additional income because the more TVL you get, the more commission you get.

SPEAKER_01: 26:48

Yes. And the good thing about this, at least right now, is that you don't need to put up any collateral. You know, so for Rocket Pool, you need to put up 8 or 10.4, including the RPL bond. But for Stakewise, you don't have to put up any. You can start with zero.

SPEAKER_02: 27:00

Oh, super.

SPEAKER_01: 27:01

Yeah. Yeah. But then again, you know, the problem is you still need to attract on TBL, which for most solos takers is no mean feat. If you're a nerd like ourselves, right, how do we have followers?

SPEAKER_02: 27:14

I read your post also. Big follower, you see. I read your Medium. Is that Medium or Substack? There you talk about attracting, growing TBL through, it's like a partnership, right? The nerd handles the tech, the KOL handles, you know, the audience bring in.

SPEAKER_01: 27:28

Correct, correct. So that is my idea of how, you know, this, uh, nerdy node operators who don't like to show themselves, put themselves out there, can still grow their own TDL and income is by partnering with people who have that distribution, basically creators, community builders, maybe even DAOs or aspiring fund managers.

SPEAKER_02: 27:48

I'd like to come back to Stakewise one more time to clarify one thing is, so let's say together, three of us, we hit 32, we start, I'm an operator, I'm a Stakewise operator.

SPEAKER_03: 27:59

Yeah.

SPEAKER_02: 28:00

I have eight, you have eight, team has 16. Suddenly, one day, team decided, oh, I have urgent need for liquidity. I want to pull out that 16. What happens during that process?

SPEAKER_01: 28:11

Yeah. So whenever it falls below multiples of 32, right, the state-wise operator service will automatically trigger an exit message on the beacon chain where the validator leaves. And teams, it will automatically be triggered withdrawn to his wallet, then yours and my ETH will stay in the statewide vault and we can also withdraw anytime. But while it sits below the 32 ETH multiple, it will not be productive, if that makes sense. It will be dormant on the vault and not living on the beacon chain.

SPEAKER_02: 28:45

I understand. So I assume it also has to go through the three to five days of weekends, right?

SPEAKER_03: 28:51

Yes.

SPEAKER_02: 28:52

Okay. So let's say one day teams decided to pull for liquidity, cost for exit, operations stop wait three to five days and all of our asset goes back to the you and my asset goes back to the vault teams go back to his wallet and he leaves from there

SPEAKER_01: 29:06

all right correct

SPEAKER_02: 29:07

i see okay okay

SPEAKER_01: 29:08

the other way would be because with each statewide vault you can after you stake you can mint the statewide native free staking ETH token which is called OSETH And OS ETH, a statewide team will provide liquidity for OS ETH on various DeFi platforms, which means that on Uniswap, you can swap OS ETH to normal ETH.

SPEAKER_02: 29:29

Oh, okay. If you don't want to wait, you

SPEAKER_01: 29:32

can do that. But I expect there will be some discount it won't be one to one

SPEAKER_02: 29:37

yeah yeah for sure for sure because of the time right

SPEAKER_01: 29:41

yeah

SPEAKER_02: 29:42

wow super how about setting up the machine the operation for stickwise is it something that is complicated or is it like the same as like setting up solo staking

SPEAKER_01: 29:53

yeah so on the most basic level is 90% or at least 80% similar to solo staking and then you just run an additional lightweight client on top of it for example right you know that. to run a validator node, you need three key pieces of software. One is the execution client, then the consensus client, and then on the top is the validator client. So the execution and consensus client is one set, so you always have to run those together. Then on top you can run the validator client, you can run things like the Rocketpool client, the Stata client, then here you have the Stakewise client.

SPEAKER_02: 30:29

Oh, I see.

SPEAKER_01: 30:32

But of course, if you want to inspire confidence amongst the public market to encourage them to stick with you then you need to showcase a bit more infrastructure knowledge like you need to have a backup node somewhere you need to be able to use DVTs distributed validated technologies when they become available to everyone there is a range you can get started with very minimal knowledge but you can work to improve your setup to a very high degree if you want to

SPEAKER_02: 31:03

I see so from your perspective I know you've been a big advocate for solo staking. For a user, let's say the user only has five ETH, should with moderate technical knowledge, should the user go to just an LSD like Rocketpool, just change for RE and leave it there? Or should that person start exploring things like Stakewise or MiniPool?

SPEAKER_01: 31:30

I would say that for someone just getting started, I would encourage them to explore solo staking anyway. So while you're learning, you can put your ETH into Rocketpool, Stata, or Lido, whichever. Once you've acquired some basic level of proficiency, then you can apply for hardware grant. So think of it as a roadmap. You can apply hardware grant with your skill set. It can showcase that you are proficient enough. Then, once you have your hardware grant provided, then what you can do is you run a combination of Diva, Rocketpool, Stata, whichever. Just split your assets up into various of these LSD ETH players as a node operator, not as just a normal staker now. And this will allow you to cultivate your on-chain reputation so that you are able to show these on-chain reputation to new LSD initiatives. For example, Diva and SSV, they were running their testnet programs recently. If you can show that, then you build off-chain reputation with these Ethereum staking projects. So the Now you will likely be able to get priority access to any future initiatives that allocate some of the TVL to community stakers. Yes. So this is a trend that you have to see in the long term because growing the solo staker community is very important to everyone on the Ethereum network. Every project, from researchers to even the centralized exchange, they want Ethereum to thrive. So solo stakers are very crucial to this. So position yourselves in a way that you are able to capitalize on all these upcoming initiatives is what I would advise people with small amounts of ETH to do. Now that you have all these parts, components done, then the last step is then to launch your own Stakewise Vault and then scale your TVL. If you just start with the Stakewise Vault, then no one will stick with you. You can't show proficiency, you can't show any reputation, any track record at all.

SPEAKER_02: 33:29

Yes, that I agree. Because I was looking at Lido Testnet for... so they are going with simple dbt right

SPEAKER_01: 33:38

ah yes yes so you know yeah

SPEAKER_02: 33:40

mix of ssv and obo correct so give context ssv and obo they are both dbt providers in the application form they will ask you if you have previous experience know all this stuff other i mean if you don't have previous experience it's unlikely you get into that that that testing phase i feel and this is what I'm guessing that this is what you say, like the on-chain reputation, right?

SPEAKER_01: 34:04

Yeah. And then once you participate in these initiatives, you have off-chain reputation.

SPEAKER_02: 34:09

Yeah, yeah, yeah. Oh, super, super. I think I need to buck up on my technical knowledge to... I mean, I can set it up. It's just I have no confidence to know whether is it like secure or not because, no.

SPEAKER_01: 34:23

Is it correct or not? Yeah,

SPEAKER_02: 34:24

yeah, yeah. Like, you're not sure.

SPEAKER_01: 34:26

That is a problem with a lot of new solo stakers when they use a setup that is highly automated because once the environment variables change a little bit and then they face an error they are paralyzed they don't know what to do right and then they panic and when you panic is when you make stupid mistakes then that could lead to you being slashed so far all the slashing events has not been due to dishonest behavior but more of stupid mistakes yeah

SPEAKER_02: 34:55

I agree there's too much magic in EVE Docker so EVE Docker is kind of like a software that you you run then a lot of things are automated populated right

SPEAKER_01: 35:05

yeah

SPEAKER_02: 35:05

yeah it's easy but there are too many magic

SPEAKER_01: 35:08

right and docker to me isn't the most easy for someone new to linux and devops to use

SPEAKER_02: 35:14

yeah yeah yeah okay i think i need to arrange another lesson with

SPEAKER_01: 35:19

you happy to help you anytime man so that is why i always advocate for aspiring solo stakers to learn the basics first before using any abstraction layers such as if docker or even an installation script because you need to know the concepts you need to know how things can affect you when they change and what are the limits to your tinkering there are some things that you cannot do absolutely

SPEAKER_02: 35:45

hey sam i wanted to ask okay i know that you do workshops on on eve home staking maybe you can just talk about what is covered whether you think that's enough or i mean you've also put out a document on your twitter um you know, the ETH full home staking setup guide.

SPEAKER_03: 36:03

I

SPEAKER_02: 36:03

mean, is that enough? If, you know, if listeners want to try their hand at it, is following that sufficient or is there more to it which you cover in your workshop?

SPEAKER_01: 36:12

So to be very frank, if you are able to sit down and focus for two, three hours, the documentation, the guide that I put out should be enough for you to set up your own validator node on the test net or even on the main net end to end. But because, you know, being in this space our attention span is really short so a lot of times people don't even read properly or they skim through right and then they encounter some errors and mistakes and then they feel that they get discouraged and oh it's so difficult but actually it's not difficult if you copy it and paste the commands line by line and do it read exactly what the change you'll get there without even the workshop the workshop is a way for me to do what I like to call physical activation in a workshop setting, there's more that I can convey to the participants like, oh, you know, this is an exciting opportunity. I can get excited and pumped up easier. And the workshop also helps the people who are less technically adept so that I can help them troubleshoot even the most basic things. Like my documents encourage them to use a virtual machine on the cloud service to practice. But a lot of people are stuck even on creating the virtual machine itself. And even on the first installation command, they're stuck. Something is wrong. Yeah.

SPEAKER_02: 37:33

So prior to joining a workshop like yours.

SPEAKER_01: 37:37

Yeah.

SPEAKER_02: 37:38

Is there any prerequisites? What should I

SPEAKER_01: 37:43

be set with? The only thing you should have is a working laptop and sign up for the Google Cloud account with the free$300 of credits. And with$300 of free credits from Google Cloud, you're able to practice for months. Because even if you leave it running every day, you only burn$320 over three months.

SPEAKER_02: 38:06

Okay.

SPEAKER_01: 38:07

Yeah.

SPEAKER_02: 38:07

How's the reception been for your classes so far? How many people have you trained?

SPEAKER_01: 38:12

I've lost count, to be honest. So I've been running on and off for the past nine months, eight, nine months. Class sizes varies quite a bit. The most recent one I did had 33 attendees with a university in Malaysia. Sorry, 33 sign-ups, and then I think it was 18 to 20 people actually showed up. Each class is around 10 to 20 packs, and I've done around maybe to 10 so far

SPEAKER_02: 38:39

okay

SPEAKER_01: 38:39

yeah but to give you a more definite metric right i have this uh public telegram group chat that i encourage all students to join after that to know they can get nice triage support before i funnel them to the more technical teams there are 112 people in that group right now

SPEAKER_02: 38:58

Okay. So he said, like Sam mentioned, his Telegram group, 100 plus people, which also tells us there's a big opportunity out there in this space for homeschooling. Like, there is more to be educated. Like, if everyone needs to come on the Ethereum to secure the network, I mean, it's a plus, right? Not everyone is into this kind of validation. On the other end, as a normal user like me, who tinkers around, yet at the same time, like to look at the yield like for example you have mentioned like solo stickers someone managed to get 500 ETH for block rewards but of course that could be like 1 in 10,000 we don't know but yeah it's

SPEAKER_03: 39:42

like

SPEAKER_02: 39:43

total but in the spectrum of 4% APY and with more tools and projects coming out lowering the barrier there's an opportunity there's definitely opportunity in this space it's just we need a little bit of technical knowledge to take this opportunity I feel and it's something that I'm interested in because I mean to me the machine is a sunk cost the next task for me is how do I make this work as hard as possible on top of my own if sticking how can I use the same machine to provide value to others then I think it's a plus as a user

SPEAKER_01: 40:23

and so that's why even if you don't have a spare machine lying around the existence of hardware grants should lower the barriers to entry to to new solo stakers, the hardest part so far to me is getting people interested in this concept in itself. I was actually initially quite surprised at how many people did not know about the ability to run your own Ethereum node at home. Everyone is still thinking about, oh, don't you need expensive GPUs, and it consumes a lot of electricity, and then you can slash if it turns off. A lot of my time has been trying to just debunk these myths, people here. And this is in Singapore and Malaysia still. So imagine if I go to Indonesia, Vietnam, Philippines, the understanding is even worse. And in some of these Southeast Asia regions, there are zero Ethereum nodes running. I think Philippines and Vietnam has zero. Singapore has around 200, 400 maybe. The rest of Southeast Asia has less than 100 in total.

SPEAKER_02: 41:20

So I'm going to divert a little bit. I want to hear from you who is a strong advocate on solo staking. Your thoughts on other protocols like Solana, where you require bare metal right and there was i think two weeks ago or maybe three weeks ago there was strong conversation running around between the importance of home sticking or rather solo sticking the ability to use a lightweight machine to stick vs i actually need a like bare metal server kind of setup to stick what's your thoughts on this

SPEAKER_01: 41:51

as a general rule of thumb right the easier it is for anyone to participate in blockchain consensus the stronger and the more decent centralised the network should be. Because when shit hits the fence, for lack of better phrasing, you want to make it as easy as possible for the everyday person to participate in correcting the wrongs. So if you need bare metal service in order to make your voice be heard, basically vote on the rightful chain, it restricts a lot of people from being able to do this and only the large players will be able to do it, like the institutions. And who would be the most likely to collude it won't be the everyday person it'll be the institution so this is where the contention is having said that there's some nuance to the solana validator model you don't actually need a bare metal server but you do need expensive hardware which is like i think six thousand to eight thousand usd you can get the solana hardware but the real cost comes from the opex of running a solana validator because the act of voting on solana requires you to burn solana tokens you need to burn at 1.1 solana token per day to perform validated duties, which is close to 25K a year, which means you need to stake at least, actually I don't remember how much, but I think it's around 375,000 USD worth of Solana just to break even. So this is the real barrier to entry for Solana validators actually.

SPEAKER_02: 43:23

Oh, wow. Machine price 6,000 plus.

SPEAKER_01: 43:27

Yeah. And

SPEAKER_02: 43:28

OPEX. OPEX, which is kind of like account rental, right? 1.1.

SPEAKER_01: 43:32

Yeah, yeah, yeah. Yeah, you know your stuff.

SPEAKER_02: 43:35

Yeah, account rental 1.1 so yeah okay okay

SPEAKER_01: 43:38

yeah

SPEAKER_02: 43:39

It's good to hear your take on this.

SPEAKER_01: 43:42

So this is why the Ethereum ecosystem is trying to lower the barriers to entry for individuals to run their validator nodes. But I would say despite these efforts, there's only still like 6.5% of the network being run by home stakers or solo stakers. But on the other side of the coin, then this is the opportunity. So you take the trend of Ethereum staking projects trying to expand their node operator set to include solo stakers and assign the TVL to these solo stickers. And then on the other side, you have only 6.5% of the network of people are proficient in running validator nodes. So if you join now, you'll have a bigger piece of the pie than if you join later.

SPEAKER_02: 44:24

Yeah, that I agree. Tim, I think Blockhead needs to set up I mean, that's why you brought it up again last week, right? Yeah, yeah, yeah. I'm going to have to go through that document that Samuel shared. I mean, we'll also share it on the show notes. We need to attend Sam's lesson.

SPEAKER_01: 44:40

Yeah, yeah, yeah. You try it yourself first and if you still have trouble, then yeah, I'll send you the link to the next upcoming sessions.

SPEAKER_02: 44:46

Sure. I mean, I think that's a good point to close up this conversation. I mean, Sam, where can we find all these resources and how can our listeners learn more?

SPEAKER_01: 44:56

Yes, So I think the best platform to go to is my Twitter. It's easy to find me, just Stegosaurus. There's only one Stegosaurus. There's no scams yet because I'm still a small account. And within my profile, you'll see my pinned tweet will be the full guide itself. If you want other resources, I also linked a Linktree link in my profile. And then you just click on it and choose whatever you want.

SPEAKER_02: 45:20

You mentioned a Telegram group as well.

SPEAKER_01: 45:22

Yes, the Telegram group can be found in my Linktree as well. I'll be releasing more guides for more use cases, like, you know, your SSV setup overall, Lido's simple DVT if solo stakers want to join the next cohort, maybe Diva staking if they want to, and similar ones like this.

SPEAKER_02: 45:40

Right, okay, I'll be sure to add all these links into the show notes, and, you know, please stay in touch and keep us posted on, you know, on developments at Stakersaurus and, you know, what you're up to generally. Happy to do a follow-up on a subsequent episode down

SPEAKER_01: 45:55

the road. Yeah, yeah, I would love to, like, come back and reprise my role and see, maybe we can do a pop quiz on how much your knowledge has improved on

SPEAKER_02: 46:05

that one. Okay, I'll brush up in the meantime. Huat Kuei, where can listeners find more of your stuff? Same, on Twitter. You can find me on GoingOnChain. Yeah, it's a Twitter handle or the X handle. Nice, nice. And, of course, through your articles that you contribute to BlockHitler. Yeah. Great. So, Sam, thanks for your time. Thanks for speaking to us. We'll be carrying out updates on stakeholders on Blockit.co. So stay tuned. Thanks a lot.

SPEAKER_01: 46:33

Awesome. Thanks again. Thank you.