How Ethereum co-founder Vitalik Buterin on may 20. April on Github stated, could be the Staking Reward for Ethereum-validators to be higher than previously planned. This is possible as soon as the Ethereum algorithm is switched to Proof of Stake (PoS). Currently, the Ethereum algorithm is still working on the Proof-of-Work System (PoW).
Users of the system pay to the Miner, currently a fee to initiate a transaction. The Miner, in turn, generates new transactions and receives his reward in the Form of Ether. PoW systems have, however, consumption has the disadvantage of relatively high energy and therefore in the criticism.
According to Vitalik Buterin, the change from PoW to PoS is not intended to reduce in the future, only energy consumption but also to improve efficiency. Currently, it is expected that the introduction of the PoS-algorithm in the next 16 months. In the Community is discussed, even now, hot on the future Rewards.
How does the proposal concretely?
According to Vitalik Buterin on the basis of the Community feedback, an increase in the Ether-Emission on 2.097.152 Ether in a year when around 134.217.728 to be validated. The resulting annual rate of return for the Staker amounts to around 1.56 percent. According to Buterin, a rate of return, provide incentives for Staker, on the other hand, a strong Ether-Inflation should be avoided. In the future, a base-to-reward ratio should, therefore, be defined based on a preset maximum output, which will enter into force once all the Protocol are explored in details. Here is a table with the new total output Rates of the proposal:
ETH validating Max annual issuance Max annual return rate
1.000.000 181.019 18,10 %
3.000.000 313.534 10,45 %
10.000.000 572.433 5,72 %
30.000.000 991.483 3,30 %
100.000.000 1.810.193 1,81 %
134.217.728 2.097.152 of 1.56 %
Also, Justin Drake commented on Vitalik’s GitHub comment and expressed its consent to Buterin’s idea. The Ethereum researchers referred to 32 million Ether as an ideal size to maintain the network security of the Ethereum block Chain. He is of the opinion that under such conditions, the underlying inflation will be approximately one percent and the base rate of return of approximately 3.2 percent. This would be much lower than the average U.S. Dollar inflation rate of 3.22 percent. Its adoption would consume each Shard an average of 1,000 ETH Gas per year, which would be about 100 times less Gas than it is today. According to Drake, the Inflation would be around 0.5 percent, and the return of the Validators approximately five percent. Values, with which Drake could live with that and the network would healthy can seem.
A view of the Staking
Meanwhile, the Buterin discussed the proposal seems to encounter mostly positive reactions. The Details of the Ether Staking are currently, however, only formally known, and most of the rules are, however, still discussed. Also, the number of Ether seems to be still not set in stone.