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Under PoS, Ethereum block validators, also known as stakers, lock up a portion of their ether (ETH) as collateral to participate in the network's consensus mechanism. In return for their participation, stakers earn rewards in the form of new protocol emissions and transaction fees.

To fully achieve the promise of this innovation, a standardized benchmark can be produced by capturing and publishing the daily, annualized mean of on-chain rewards across all validators. It would be difficult to manipulate because of the inherent transparency, replicability and immutability of the blockchain in contrast, say, to the infamously manipulated LIBOR benchmark that powered traditional finance (TradFi) credit markets for years.

Based on a preliminary analysis of how such a benchmark would behave,

average protocol emissions appear to trend downward as new validators come online. But its clear that the rate skyrockets with material increases to network activity resulting from a flight to safety (FTXs insolvency) or new network activity (the recent PEPE meme coin frenzy).

A standardized ETH staking rate will provide immediate utility as:

As a benchmark, an ETH staking rate would work similarly to traditional instruments like overnight index swap (OIS) rates delivering reference rate utility to market participants. From new crypto-native Sharpe ratios to pricing benchmarks, a standardized ETH staking rate can be used to discount future cash flows letting investors better assess the present value of their investments in the Ethereum ecosystem.

A standard staking rate would form the underpinning of an important new tool for risk transfer. Interest among natural hedgers, especially validators, and prospective speculators will result in the inevitable formation of a forward curve resulting in swaps, futures and other derivatives. Basis swaps with traditional rates or cross-currency swaps with fiat currencies could provide an interesting new crypto rate onramp, while also allowing structured products to proliferate.

A new staking rate could unlock the next generation of financial products while serving as a building block of Ethereums monetary policy. As such, CESR represents an important development in the evolution of the Ethereum ecosystem and a new frontier for innovation in the world of decentralized finance and beyond.

NOTE: CoinFund recently announced that it had partnered with CoinDesk Indices to launch CESR, a composite ether staking rate.

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Ethereum Staking Needs Its (Honest) LIBOR - CoinDesk

Starknet, an open-source framework that aims to bring scalability and privacy to decentralized applications (dApps) built on Ethereum, has seen dramatic growth in various DeFi apps on the network over the past few months, with its total value locked (TVL) recently hitting a new all-time high

As of today, Starknet TVL stands at $10.49 million, a whopping ten-fold increase from $1.449 million at the beginning of March, according to DefiLlama.

TVL is a metric commonly used in decentralized finance (DeFi) to measure the total value of assets locked or deposited within a particular protocol, platform, or smart contract. It can serve as an indicator of the overall activity and popularity of a project.

Developed by Israeli-based company StarkWare, Starknet is designed to address the limitations of the Ethereum blockchain, such as high transaction fees and slow transaction processing times, by enabling off-chain computations and data storage while still leveraging the blockchain's security guarantees.

I certainly cannot give any investment advice, but there are many, many developers that understand that in order to unleash Ethereums scale reaching a global demand you need new, safe, and battle-tested technologies, StarkWare president and co-founder Eli Ben-Sasson told Decrypt, adding that Starknet is already recognized as a hell of a technology stack."

To achieve this, Starknet leverages a layer-2 scaling technique known as zero-knowledge rollups, which bundles hundreds of thousands of transactions together off-chain and then verifies them on-chain for just a fraction of the cost.

Source: DefiLlama

While Starknets current TVL may be much lower than that of some other protocols in the same category, the protocols TVL was just about $800,000 at the start of the year.

The major player responsible for more than 57% (over $6 million) of Starknet TVL dominance is JediSwap, a fully permissionless AMM that enables users to swap, earn, and build instantaneously on the decentralized, community-driven protocol.

Other members of the layer-2 market slice, like Arbitrum and Optimism, for example, command TVLs of $2.4 billion and $884 million, respectively. This is in part due to the swift adoption among DeFi heavyweights on each network, including Uniswap, Aave, and Curve.

Speaking about other likely drivers behind Starknets growing popularity, the StarkWare chief mentioned Cairo, the Rust-inspired programming language, which is the most modern and best smart contract language out there that developers are flocking to, said Ben-Sasson.

The next thing that everyone is excited about, according to Ben-Sasson, is the next upgrade of the networkversion 0.12 which is due to be released in June and is expected to result in a significant increase in the throughput on Starknet.

The rest is here:

DeFi Projects Built on Ethereum Scaling Solution Starknet Hit $10M - Decrypt

One week ago, the Ethereum network encountered a finality glitch that caused significant angst within the projects developer community.

The problem stemmed from two consensus clients, including one of the leading clients, Prysm, spending too much computing resources on processing mostly worthless block attestations a part of the proof-of-stake consensus mechanism.

In a report issued by the team behind Prysm, the failure to finalize while largely unnoticed by users was worse the second time around on Friday. In one epoch, client participation fell to 30.7%, which the Prysm team says was the lowest participation of any epoch in [Ethereum] Mainnet ever.

The Prysm client is run on 37.6% of Ethereum validating nodes, according to clientdiversity.org. It is developed by Prysmatic Labs, which was acquired by Offchain Labs the developers of Arbitrum in October 2022.

An Ethereum epoch is roughly 6.4 minutes and comprises 32 slots read blocks in the blockchain of 12 seconds each. The network failed to finalize on Friday for nine epochs (nearly an hour). This was long enough to trigger the first-ever inactivity leak mode, which penalizes validators that have stopped contributing to consensus.

But the damage was inconsequential: about $0.27 per validator.

In total, we estimate that 28 ETH of penalties were applied and validators missed 55 ETH or more of potential revenue, the Prysm team said. This is less than 0.00015 ETH per validator.

Prysms client began to struggle to handle incoming attestations with target checkpoints two epochs behind the then-current one. These valid attestations required clients to recalculate previous states of Ethereums Beacon chain and caused Prysm clients to exhaust their resources, resulting in a failure to meet validator clients requests promptly.

Ironically, contributing to the clients woes was the huge success of Ethereum staking post-Shapella, when withdrawals of staked ether became possible for the first time.

A sharp increase in new validators requesting to join the Beacon chain since the start of May has pushed ETH staked net of withdrawals up by about 1.3 million, to a total 20.5 million a value in dollar terms of more than $37 billion, on-chain data shows.

That has lengthened the queue to join the network by nearly 60,000 validators, meaning a new validator requesting to join today will not be active until some time in late June.

Beacon chain clients were stressed by all these incoming ether staking deposits, the Offchain Labs report explained.

When the beacon state was smaller, Prysm would be able to handle these attestations and recover appropriately. However, with the large spike in deposits and the growing validator registry size, Prysm was unable to recover this time, the team said.

The Prysm client now ignores attestations for old blocks, which the report says are generally of no value to the network. Minority client Teku implemented a similar fix last weekend.

The current majority consensus client, Lighthouse, already was programmed to drop the problematic attestations and suffered no loss of liveness. The mere existence of client diversity has been largely credited with allowing the network to recover on its own without any manual intervention.

Aside from the technical stress on the software and hardware, the incident also took a toll on some members of the Ethereum community.

Ethereums community health consultant, known as Superphiz, for one, declared he was taking some time off from Twitter, to regain some physical fitness routines and mental clarity.

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Ethereum Devs Issue Final Report on Finality SNAFU - Blockworks

Supporting Ethereums [ETH] causes is something Visa seems committed to. In another round of updates, the leading payment service provider displayed that it has been closely monitoring the blockchains ERC-4337, and focused on how it could help foster account abstraction.

How much are 1,10,100 ETHs worth today?

Developed recently, ERC-4337 allows users to automate transactions on the Ethereum blockchain with no consensus layer altercation. Besides that, the account abstraction feature on the standard enables decentralized multi-factor control and security.

Visas interest in ERC-4337 stems from its goal of expanding its presence in the digital asset and blockchain ecosystem.

By monitoring Ethereums evolving standard, the firm noted that the deployment of ERC-4337 on the Ethereum Mainnet could be advantageous for the projects compatibility with any blockchains.

This was not Visas first interaction with Ethereum. Since switching to Proof-of-Stake (PoS), Ethereum has been on Visas radar.

In December 2022, the firm proposed automatic payments for its users via StarkNet, Ethereums L2 solution in the developmental phase.

Now, its latest crypto thought leadership post opined that ERC-4337 could provide an end-to-end transaction flow for its users via a mempool.

For the unfamiliar, a mempool is a blockchain node responsible for verifying and approving queued or pending transactions. In explaining the process, Visa noted that,

Users generate UserOperations through ERC-4337-compliant smart contract wallets. UserOperations encapsulate the users intent to interact with the blockchain.

Although there were still some complexities with the blockchain standard, the payment firm deployed and processed an experimental transaction on it. While the test was termed successful, Ethereum developers had once mentioned that the functionality and security were still being worked on.

Meanwhile, Ethereums development activity had recovered from a slight decrease. The metric, which measures the public GitHub contribution to the blockchain, was 50.38 at press time.

This means that developers had returned to committing codes dedicated to ensuring Ethereums functionality. While Visas experiment was aimed at increasing ETH users, the yield has not yet been reflected.

Is your portfolio green? Check the Ethereum Profit Calculator

As of 18 May, the network growth had reduced to 17,200. The metric reflects the number of new addresses interacting with a blockchain network. Therefore, the decline means that Ethereum had significantly lost traction, and new addresses had restrained from making transactions on the network.

Lastly, Visa admitted that Ethereum not fully supporting account abstraction could be a hindrance to its objectives. However, it mentioned that StarkNets developmental model has the potential to make up for the drawback.

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Ethereum: Payment giant shifts focus to ERC-4337 and this means - AMBCrypto News

Ethereum ETH/USD and Dogecoin DOGE/USD were held flat by Bitcoin BTC/USD during Fridays 24-hour trading session, in tandem with the S&P 500, which gapped up higher but fell slightly lower intraday.

The cryptocurrency sector has entered into another consolidation phase, not offering the usual volatility experienced traders and investors in the space have come to expect.

Lower-than-average volume in the sector is to blame, with traders seemingly taking a break from buying and selling cryptos as the market moves into a lull, perhaps caused by the sell in May, go away theory that often holds some truth.

Periods of higher volatility are still likely, however, and that may take place for at least a short period of time when the three cryptos break up or down from the triangle patterns they have settled into.

Regardless, traders and investors will be watching the crypto sector over the weekend for clues as to how the S&P 500 may behave next week and if Bitcoin, in particular, continues to consolidate, there may be no surprises for the stock market next week.

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The Bitcoin and Ethereum Chart: Bitcoin and Ethereum both began trading in triangle patterns on May 12, making a consistent series of lower highs and higher lows. Both cryptos are set to meet the apex of their triangle on May 23, and traders and investors can watch for big bullish or bearish volume to come in when they breach the upper or lower trend line of the pattern to confirm it was recognized.

On Friday, Bitcoin and Ethereum were forming inside bar patterns, withall of their price action taking place within Thursdays range. The pattern is neutral in this case, but Ethereums inside bar is slightly more bullish than Bitcoin's.

Both cryptos are being held down by the eight-day exponential moving average on the daily chart, but if Bitcoin and Ethereum break up from their triangle patterns, they will regain that level, which would give bullish traders more confidence going forward.

Bitcoin has resistance above at $27,133 and $28,690 and support below at $25,772 and $25,288.

Ethereum has resistance above at $1,846 and $1,957 and support below at $1,717 and $1,554.

The Dogecoin Chart: Like Bitcoin and Ethereum, Dogecoin is trading in a triangle pattern, set to meet the apex on May 22. The Shiba Inu-themed crypto is also trading in an inside bar pattern, which leans neutral.

Unlike Bitcoin and Ethereum, Dogecoin is trending under the 200-day simple moving average, which is bearish. If the crypto breaks up from the triangle formation, Dogecoin is likely to find resistance at that indicator.

Dogecoin has resistance above at $0.075 and $0.083 and support below at 7 cents and at $0.065.

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Bitcoin, Ethereum And Dogecoin Lay Low Into The Weekend: What To Watch - Benzinga