Figment’s Q1 2024 Ethereum Validator Report

April 25, 2024

This report covers all of Figment’s Ethereum validators that were active throughout the months of January, February, and March in 2024. On Ethereum, we are one of the largest independent protocol staking providers. All of the data utilized in this report is powered by Figment’s Data team unless otherwise stated. 

In order to gain a complete understanding of a validator’s performance, it is crucial to consider various factors and evaluate their performance over an extended time frame. Comparing individual validators over a brief period of time does not provide an accurate representation due to selective data, transaction fee volatility, and validator selection randomness.  

Metrics:

  • ~26% of ETH Circulating Supply Staked 
  • Figment’s average SRR Rate throughout Q1 was 3.9%
  • 0 Double-sign Slashing Events on Figment validators
  • Figment Ethereum validators participation rate in Q1 was 99.8% 

EigenLayer Overview

EigenLayer is the first implementation of restaking on Ethereum. It allows those staking Ether (ETH) to secure additional protocols with their staked ETH and thereby earn additional reward streams. It’s helpful to think of EigenLayer as a marketplace that connects stakers, builders, and operators.

An operator runs Actively Validated Services (AVSs) – protocols built on EigenLayer. (Re)stakers delegate to these operators and thereby receive additional rewards. 

As of April 9th, 2024, you can now delegate your restaked ETH to specific operators on EigenLayer mainnet. Figment is live as a mainnet operator and has been participating in the EigenLayer ecosystem since early in its testnet. 

You can create your EigenPod and restake Ethereum validators in the Figment app today. To delegate to our operator, visit this page and click “Delegate”. We will support delegation in the Figment app soon.

Previously, ETH and ETH LST holders could restake on mainnet more broadly (see previous announcement here). Now you can choose to stake with Figment directly, a top institutional-grade staking infrastructure. 

In early February, Brianna from EigenLabs posted about how “in the past 30 days, 1 out of every 4 Ethereum validators joining the queue have set their withdrawal credentials to an EigenPod” and the chart below shows this growth in cumulative deposits over time on EigenLayer. 

Figure 1: 

Source: https://dune.com/blockintel/eigen-layer 

As of April 15th, there is over 4.5 million ETH restaked through EigenLayer, which totals over $14+ Billion USD value restaked. 

Source: https://app.eigenlayer.xyz/ 

After the successful launch of EigenLayer and the EigenDA AVS, EigenLayer has announced that it is now in on stage 3 of its mainnet launch. Following the launch of EigenDA as the first AVS on EigenLayer, this next launch stage introduces a new group of AVSs that are now live. Learn more about the recent EigenLayer launch here. 

Rewards

When staking Ethereum, validators receive both consensus layer (CL) and execution layer (EL) rewards. CL rewards account for the majority of the rewards in Q1 at ~77%, compared to ~23% for EL rewards. 

Consensus Layer Rewards

CL rewards are allocated to validators for attesting, proposing blocks, and participating in the sync committee. Attesting blocks is a frequent occurrence and is primarily driven by the participation rate of a validator which is discussed later in the report. Figment’s performance in Q1 for median CL rewards was 0.00219 ETH per validator per day, which was on par with network median. In the event a validator is selected to propose a block, they also receive EL rewards.

Execution Layer Rewards

Validators only receive EL rewards when they are proposing blocks, which is a random and infrequent event (happening, typically, once every 64 days or so). Even if a validator is randomly selected to propose a block, the size of the rewards are determined based on the cost of transacting on the network. These costs include priority and Maximal Extractable Value (MEV) fees in that block. The EL fees are volatile and primarily driven by the traffic on the network at the time of the transaction. In Q1, when Figment validators were selected to propose blocks, they received a median of 0.049, ~3% higher than the network median of 0.0476 ETH. With the EL rewards being random, we expect this number to fluctuate quarter by quarter. 

Between these two reward types, CL rewards are much less volatile and less prone to the “luck factor” than EL rewards — Figure 1 below displays the difference in variability between EL rewards and CL rewards. 

Figure 2: 

Utilizing the median as a metric for reporting Ethereum rewards is a more reliable method than using the mean, primarily due to the variability and presence of large outliers in rewards resulting from MEV activities. The median, as a measure of central tendency, is less sensitive to extreme values and outliers, providing a more representative value for the typical reward earned by validators. 

Participation Rate

Every 6-7 minutes, validators on Ethereum are randomly selected to propose and attest new blocks, where they are reviewed for correctness. Afterwards, the committee of attesting validators casts votes on whether to approve the proposed block, and if they reach consensus, the block will be added to the canonical chain. 

Participation Rate is a measure of how often a validator successfully attests when it is selected by the protocol to participate in a committee. A validator could be unable to attest for many reasons, including downtime or misconfiguration. As a result, Participation Rate is a reliable indicator of network uptime and validator stability. 

In Q1, Figment performed above the network average, with an average Participation Rate of 99.8%, which is 0.3% higher than an average validator.

Figure 3: 

Slashing 

Figment’s performance throughout Q1 2024 remained strong, having missed no proposals nor being slashed for any penalty. As the figure displays, on other validators throughout Q1, there were 20 slashing events on Ethereum, all related to attestation violations (source). 

Figment pioneered the concept of “Safety Over Liveness” on our validator infrastructure that minimizes the chances of being slashed. We also offer coverage to mitigate losses in the case of a slashing event.

Slashing is one of the greatest risks to validator performance and has the greatest negative impact on its rewards.

Figures 4 & 5: 

Stake ETH with Figment

Figment is the leading provider of staking infrastructure. Figment provides the complete staking solution for over 500 institutional clients, including asset managers, exchanges, wallets, foundations, custodians, and large token holders, to earn rewards on their digital assets. On Ethereum, Figment is the largest non-custodial staking provider of staked ETH. Institutional staking services from Figment include seamless point-and-click staking, portfolio reward tracking, API integrations, audited infrastructure, and slashing protection. This all leads Figment’s mission to support the adoption, growth, and long-term success of the digital asset ecosystem. To learn more about Figment, please visit figment.io.

When it comes to Staking Ethereum, Figment offers: 

  • Collect More Rewards: Figment supports Flashbots MEV relay.
  • Multi-Client Infrastructure: Figment supports both the Lighthouse and Teku Ethereum clients. Multiple client implementations can make the network stronger by reducing its dependency on a single codebase. Figment supports multiple clients to avoid client concentration and reduce the impact of a client-specific problem leading to potential penalties. 
  • Point-and-Click Staking: Experience the best staking interface for ETH with access to the Figment app. View your staking positions in real time as well as stake, unstake, and view rewards. Track your portfolio across multiple networks and download detailed reports.
  • Optimized Rewards Reporting: Access detailed and comprehensive rewards statements in various formats.

Figment offers point-and-click staking, insights dashboards, rewards tracking, and statements—providing a seamless ethereum staking experience. Individual users maintain control with true non-custodial staking while institutions benefit from Figment’s robust infrastructure that provides security and optimized rewards. Sign up now and start staking Ethereum. 

The information herein is being provided to you for general informational purposes only. It is not intended to be, nor should it be relied upon as, legal, business, tax or investment advice. Figment undertakes no obligation to update the information herein. 

 

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