Nixo 🛸 Are Solo Stakers Valuable for Censorship Resistance?

[Music] great so the the topic we're going to be talking about is are Solo stakers valuable for censorship resistance uh my name is nixo I currently lead a uh staking Community called eth Staker which is first and foremost a community that is committed to the health and decentralization of the network and that means that we support the validator set any way we can we create solo node operators when we can and we also support existing node operators uh we do that by uh creating and supporting resources tooling and facilitating community events for stakers uh the takeaway from this talk is that solo stakers are mostly a fallback I'm glad that shiram already mentioned it in his talk um it's a small percentage of the validator set but it is a critical line of defense and they sort of set a standard of behavior they act as Auditors and uh if there there's some sort of amount of censorship going on that's degrading the value or the quality of the network they don't need to go through some sort of governance process because this is permissionless Network so they just need to participate in a sensor in a uh sensorless way so why is a large entity more likely to censor so a large entity has customers that it has obligations to and it has a duty to maximize staking rewards which means that it's going to be connecting to me boost or Mev boost um and at that point censorship is really in the hands of Builders and relays and Builders and relays are known entities with a limited landscape so they're relatively easy to Target uh for any entity that has an interest in censoring certain transactions uh so how is a solar solo Staker different uh they're generally not subject to the same pressures as each other and as large entities they're abundant so uh this is almost like a meaninglessly uh large number but the last number that I saw was that solo stakers actually represent 35 to 75% of uh nodes on the network whereas they're only 6.5 is% those those are uh both numbers from rated network uh so they're they're actually a a large amount of people whereas uh when you go to a large staking operation it's usually like two three four people who understand the system and making decisions for that system they can be geographically located anywhere they're under different isps they're running different hardware and software because they don't have to have commercial setups which often look very similar to each other they're not a commercial business so you can't Target with them you can't Target them with like this the same pressures that you would use to Target any sort of business in general it's a it's a lot of work and very little reward to Target solo sckers um and quick note the way that solo stakers sensor or not sensor is uh solo stakers can build local blocks any Staker any validator can build local blocks um and when they're building local blocks they're not they're not censoring because they get it blind and then uh if they choose to use Mev boost to maximize their rewards it's just in the hands of the builders and the Builders of the relays uh whether they're sensoring but there's also a flag that they can enable on Mev boost which is the Min bid flag which allows them to set um set a target for if if the block coming in is higher than that with Mev boost they'll take that but if it's lower than that they'll just build locally so who are Solo stakers we're going to give like a little profile of solo sakers to sort of give you an idea of why they're so important and uh how people can support them so this is these are two screenshots from East acr's YouTube channel and the first screenshot uh is our live streams and you can see that the first or three of four of those are just Network upgrades and they're they're uh highly attended and it's just people interested in watching Network upgrades happen and the second one is our pre-recorded uploaded videos and uh the first one is how to shop for ethereum Hardware so that's people who are interested in becoming validators and the next three are sort of targeting people who are already running nodes um and so you can like from both of these things that you can see that validators solo stakers are generally a highly engaged subset of people um and they range from less technical to more technical less technical folks are the ones who are following the guides and the more technical folks are the ones who are writing the guides the more technical folks who are writing the guides are generally really proud of what they're doing and this is their Hobby and they're they're happy to be engaged so they come back to the staking community and sort of help people troubleshoot help people get on board um and I'm all the way on that less technical side and I like to think that I'm uniquely positioned there to sort of bring people onto this scale because if I can run a validator anyone can uh so they understand how to update upgrade and troubleshoot their nodes and they're highly engaged in the network uh solo stakers often fundamentally care about the network and I'm going to prove that to you over a few slides uh so liquid staking token holders and staking as a service provider customers require less understanding about the network as a whole because they generally just have to go to a UI and deposit their money there and so they don't necessarily have to have a fundamental understanding of staking to be a ble to participate in the consensus layer um and so their interests generally lie in maximizing rewards and um when you have a bunch of customers who are just interested in maximizing rewards that can often aggregately influence the operators who are running their stake um so this is I think a lot of you already know about client diversity um but generally we want lots of clients on the ethereum network because if one of them goes down we don't want that affecting the network as a whole or affecting the value of the network so in 2021 there was a social layer campaign to increase uh client diversity and run minority clients and that was generally a bottom up uh sorry campaign and I would say that it was it was uh very successful uh the majority of or the super majority of validators went from running prism to having a pretty balanced uh consensus layer landscape so this is data from the execution layer clients and data from the execution layer clients is generally harder to get at and the reasons for that are outside of the scope this talk uh but this data is from ether no.org the beacon chain guys people associate with Beacon chain put this together um and the way that this data is collected is it um connects to a Val a node with uh an empty Pier slot and then it sort of gathers data about what execution layer client it's running and then it disconnects and in that time it doesn't actually get any information about how many validators that node is running so this is more of a of an overview of the uh node execution layer uh client landscape um and so what but what we care about is the validator client landscape so uh the same guys the beacon chain guys um did another did another data set where they basically reached out to uh a bunch of pools and asked them what valid what clients they're running and um this is survey data I think it covered like I want to say 40 to 50% of the network and then hanni Abu from client diversity. org extrapolated this to the rest of the network and came up with this data which looks a lot different than the than the left data on the left and it's a lot more concerning over here um so given the fact that uh solo stakers home stakers map to a very large percentage of the network in terms of nodes but a very small percentage of the network in terms of validators I would say that the left one over represents solo stakers and the right one over represents large staking pools and large staking operations uh so this is this is just evidence for the fact that solo stakers are generally a lot more responsible in making sure that they're supporting the health and decentralization of the network uh this is so when you when you spin up um a validator on Rocket pool what it does is it sort of randomly chooses your clients and it automatically sets it in the graffiti what clients you're using so it's a lot easier to measure and they also do um they also do pushes in the in their Community to run minority clients and so just from this you can see the rocket pool validators who I think like 70% of them are running from home 30% are on all nodes um they're mostly running Lighthouse te and N Lighthouse te and nimus um whereas the overall uh validator set is running prism and Lighthouse and so that shows that people who are running from home are more engaged know what they're um do they take action on uh Network Health um and this is just the top four uh Reddit posts from eaker in the past year two of them are about liquid staking provider centralization concerns one of them is about execution layer client uh uh the campaign and then the the third one or the fourth one is a uh technical guide and so this is what solo stakers the Sol Stak Community is up voting and engaging with they're they're sort of values based uh so solo sakers are concentrated in developed Nations which is not ideal uh more than 50% of them can be found in the US Germany and the UK and I hope that I'm not exaggerating when I say that I think that East taker had an outside influence an outsized influence on who is staking and the resources that they're using to stake and so uh East Acer has a knowledge base and up until this year it's only been available in English but there has been a u push this year to make it available in more languages and so it's now available in Spanish Dutch French Malay Portuguese and Turkish and some of those are in progress and need more help so um we're attempting to help uh validator Geo GE Geographic diversity um one of the last points I'll make is that solo sckers are really risk overse and they're careful uh Diva liquid staking protocol recently did a token launch and they did an airdrop where they favored solo stakers and a lot of them didn't claim it because they said I'm not I I would rather turn down free money than claim something with an address that I'm using to stake um and I didn't have to go very far both of these both of these posts one from Discord one from the subreddit are from uh people who are wondering should they censor certain transactions they're located in places where they're worried about um running a validator if they should be censoring or not um and so they they need a little bit more clarity and need to know that they're they're uh not on the hook for these kinds of things because they do want to comply any way they can they're just nerds running computers that generate rewards they're not like rule Breakers or um crazy people uh so just an overview solo stakers under understand the fundamental of nature of staking they're engaged they pay attention to what's going on in the network they place a high value on Network Health and decentralization they're careful they need some clarity and they're motivated mostly by stable income and Security in their investment overall the takeaway is going to be a bit muddled I don't think solo stakers necessarily have an impact on day-to-day operations because um on sensor on sensor resistant because a lot of them are connected to me boost at this point I think 95% of the network is connected to Mev boost and I would guess that that 5% is um disproportionately made up of solo stakers because large business operations do have um an obligation to their customers to maximize rewards and so solo stakers sort of act as a critical social layer feedback fallback um and they standard bearers and they can act as Auditors of the network and so when it's business as usual censorship resistance is is basically in the hands of Builders and relays but in critical situations they sort of act as uh the knights watch um from Game of Thrones if uh everything is going on you're not paying attention to the fact that they exist they're just doing what they do but uh when the white walkers comes out they are a critical line of defense so how do we ensure that solo stakers continue to participate more resources more education more support and all of the above in more languages uh we solidify validators as neutral parties without a burden or ability to censor uh we lower the cost of altruism in local block building so that can be things like Mev burn or the Min bid flag tweets my friend L slous from the East Acer Community recently mentioned to me that he wished that the Min bid flag that the value you set there would be relative to market conditions rather than absolute things like that so what can solo stakers do build your local blocks or turn on your mid bid flag and that is it [Applause]