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Ethereum 2.0 Validators May Earn up to 10.3% in Annual Returns
October 25  |  2 min read

Ethereum 2.0 Validators Could Earn up to 10.3% Per Annum, but Hardware Cost May Increase

The COIN360 Editorial Team

Collin J. Myers, head of Global Token Strategy at ConsenSys, claimed that Ethereum 2.0 validators (users who stake on the network) would be able to earn from 4.6% to 10.3% in annual returns on their locked-up Ethereum. To become a validator, users need to stake at least 32 ETH, around $5,800 at press time.

In a Devcon presentation, Myers revealed that he was developing an ETH 2.0 Calculator, an application that will allow validators to calculate their potential returns per annum and expenses such as hardware costs and power bills. The launch is planned for Q1 2020, at the same time as Ethereum 2.0 itself.

The current reward figures (4.6-10.3%) may be subject to change as they are still being debated by the Ethereum community.

Meanwhile, the latest proposal by Vitalik Buterin may lead to higher hardware costs for potential Ethereum 2.0 validators. As suggested, only 64 shards, or mini-blockchains, will be initially launched on Ethereum 2.0 instead of 1,024. This will improve cross-shard communication and reduce the network’s complexity. The disadvantage of this decision is that it will lower the number of validators. Thus, validators will have to become more powerful to secure the network.

“You’re going to have to increase the power of the independent [validators] running on the network. It’s a higher grade of hardware. It’s going to be a bit more expensive for me to participate as a validator,” Myers commented.