How to Become an Ethereum Validator with Just 1.5 ETH?
Ethereum has become one of the leading blockchain technologies, supporting numerous projects using smart contracts. For those who want to delve into its technology and participate in the network’s operations, becoming a validator opens up the path to earning rewards and supporting the system. In this material, we will explore how to become a validator in the Ethereum network, based on Dmitry Gusakov’s video from Lido.
How to Become an Ethereum Validator through Lido
Validators are the foundation of the Proof of Stake (PoS) consensus mechanism in Ethereum, ensuring the network’s security by validating transactions and adding blocks to the blockchain. To become a validator, a deposit of 32 Ether (ETH) is required, which can be a significant barrier for many users due to the high cost. However, Lido offers an alternative approach through its Community Staking product, which allows you to start with a smaller deposit — just 1.5–2 ETH, providing an opportunity to participate in validation without large investments.
The entire process is based on the operation of two blockchains — the execution layer and the consensus layer. The execution layer is responsible for executing transactions and interacting with smart contracts, while the consensus layer ensures agreement on which block will be added next to the chain. On the consensus layer, validators propose blocks, and the Casper mechanism selects who will add the next block.
A validator joins the network through a node, as it cannot directly connect to the network. A minimal setup for validation includes a consensus client, a validator client, and an optional Boost tool that allows validators to buy pre-built blocks at an auction, choosing the most profitable offers.
Under the hood, Lido uses a system of liquid staking. When users stake their Ether through Lido, they receive stETH tokens in return, which represent their staked assets plus any earned rewards. These tokens can be used across the DeFi ecosystem, providing liquidity that is otherwise locked in traditional staking. Lido pools the staked Ether and delegates it to professional node operators, ensuring network security and high uptime, while maintaining a decentralized approach by distributing the stake among multiple validators.
It’s important to note that Ethereum validators do not actually perform any form of traditional validation, like verifying transaction data. Instead, they propose and attest to blocks, helping the network reach consensus. Validators are essentially voting on the correct version of the blockchain and ensuring finality. The execution layer handles the actual transaction validation, while the consensus layer focuses on reaching agreement about the chain’s state.
Lido’s system also mitigates some of the risks associated with staking, such as the need for constant uptime and the risk of slashing. By using professional validators and distributing the stake, Lido minimizes the chance of penalties. Additionally, Lido charges a fee for its services, which is shared between node operators, the Lido DAO, and an insurance fund to protect stakers from potential losses.
Concept of Weights, Slots, and Epochs
To understand how validators work, it is important to consider the concepts of slots and epochs. A slot is a 12-second interval during which a block should be proposed. An epoch consists of 32 slots. At the beginning of each epoch, all validators are divided into 32 committees, each responsible for attesting to a specific slot. Attestation consists of three parts: a vote for the current chain (Head vote), the initial block (Source vote), and the target block (Target vote). Votes help the network reach finality — a state where the block and all its ancestors cannot be changed.
If 2/3 of validators cannot agree on the same block, the epoch will not be finalized, and the process continues until consensus is reached. Validator attestations are aggregated, which helps ease data storage and makes the network more efficient.
Validator Rewards and Penalties
Validators in the Ethereum network receive rewards for adding blocks, attesting, and participating in consensus committees. Attestation makes up almost 85% of the total rewards for a validator. Additionally, validators can receive extra rewards for helping identify violations by other network participants. Furthermore, there are penalties for those who fail to fulfill their obligations, such as missing attestations or participating in sync committees. A serious violation, such as signing two different messages with the same key, can result in the validator being completely expelled from the network and losing a significant portion of their deposit.
The reward system for validators is akin to a lottery — the reward per block can vary from a few Ether to hundreds or even thousands of Ether, making the process unpredictable. Of the total rewards, 70–80% are regular rewards, while the remaining 20–30% are unpredictable and depend on network conditions.
Why Lido?
By becoming a validator through Lido, participants can delegate their funds and start working with a lower initial deposit than is required for solo validation. Lido provides a convenient interface for managing contracts and allows validators to receive “averaged” rewards, reducing the risk of unpredictable reward fluctuations. Additionally, the Community Staking Module (CSM) makes validation accessible and less complex for those without the experience or capability to run a full node independently.
Furthermore, Lido solves the problem of the lack of native delegation methods in Ethereum by offering users an easy way to participate in supporting the network without requiring significant investments or specialized knowledge. This helps increase the number of validators and makes the network more decentralized and resistant to attacks.
Lido’s infrastructure is built to provide maximum security and efficiency. By pooling staked Ether and distributing it among professional node operators, Lido ensures that the network is always maintained by experienced validators. Additionally, Lido’s use of liquid staking provides flexibility, allowing users to continue using their assets within the DeFi ecosystem while still earning staking rewards.
Responsibilities and Challenges
Despite the numerous advantages, becoming a validator is a serious responsibility. Validators are required to maintain constant connectivity to the network and sign messages at different times. Violations can lead to penalties, while attempts to manipulate the network can result in significant losses. For example, a Split Node attack can occur if a validator uses multiple machines for a single node and signs different messages, leading to conflicting data in the network. In such cases, the validator may be fined a substantial amount, up to the loss of their entire deposit.
It is also important to maintain an online presence, as offline validators can lose part of their funds and may not be able to continue participating in the network. In the case of a significant violation, the validator will need to apply for an exit from the network, which may take anywhere from one to ten days, depending on the situation.
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Becoming a validator is not only an opportunity to earn rewards but also a contribution to the security and decentralization of the Ethereum network. Thanks to Lido, participating in Proof of Stake has become more accessible to everyone who wants to support the network without making large investments. The Community Staking product allows you to start small while becoming part of one of the largest blockchains in the world. Dmitry Gusakov emphasizes that the more people run nodes at home, the stronger and more decentralized the Ethereum network will become, making it resistant to external threats and attacks.
Lido’s approach, with its liquid staking mechanism and professional node operators, provides a robust solution for those who want to participate in Ethereum staking without the complexities and risks associated with solo validation. This makes staking more accessible and beneficial for both individual participants and the entire Ethereum ecosystem