This report covers all of Figment’s Ethereum validators that were active throughout the months of October, November, and December in 2023. On Ethereum, we are the largest independent  staking provider with over 5% of staked ETH on Figment validators. 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:
  • ~23% of ETH Circulating Supply Staked 
  • Figment’s average SRR Rate throughout Q4 was 4.2%
  • 0 Double-sign Slashing Events on Figment validators
  • Figment Ethereum validators participation rate in Q4 was 99.9% 

Ethereum’s transition to Proof-of-Stake went live in September 2022. This network upgrade instituted staking for validators who commit ETH to help secure transactions and mint new ether. In the lead-up to The Merge last fall, over 10 million ETH was poised to begin staking across 400,000 validators right from launch day. 

In the months since The Merge, staking has increased steadily as more holders stake the minimum 32 ETH. According to BeaconScan, the total value locked in staking has grown from 495,000 validators on January 1st, 2023 to over 800,000 validators as of December 2023, equalling over 23% of the total ETH supply.

Rewards

Since Ethereum’s move from Proof-of-Work to Proof-of-Stake, validators receive both consensus layer (CL) and execution layer (EL) rewards. CL rewards account for the majority of the rewards in Q4 at ~75%, compared to ~25% 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 Q4 for median CL rewards was 0.002282 ETH per validator per day, which was slightly above the network median at 0.002279 ETH per validator per day. 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 Q4, when Figment validators were selected to propose blocks, they received a median of 0.052516 ETH, ~3% higher than the network median of 0.05111 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. 

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 Q4, Figment performed above the network average, with an average Participation Rate of 99.9%, which is 0.3% higher than an average validator.

Slashing 

Figment’s performance throughout Q4 remained strong, having missed no proposals nor being slashed for any penalty. As the figure displays, on other validators throughout Q4, there were 127 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.

If you are interested in staking Ethereum, Figment offers a host of services aimed at delivering safe and reliable staking rewards for your assets. Figment is the leading provider of staking infrastructure with over $3B in total assets staked. We provide the most comprehensive staking solution for over 250 institutional clients, including asset managers, exchanges, wallets, foundations, custodians, and large token holders, to earn rewards on their digital assets. These clients rely on Figment’s institutional staking service, including rapid API development, rewards reporting, partner integrations, and slashing protection. 

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.

On Ethereum, we are the largest non-custodial staking provider with over 5% of staked ETH on Figment validators. Figment’s team has extensive Ethereum knowledge intended to help dive into the specifics such as network updates and staking information.

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.