Summary
We surveyed independent operators, often broadly referred to as Solo Stakers, to better understand their profiles, demographics, pain points, and motivations. We note that while respondents are starting to feel structurally disenfranchised and worried about the pressures of validator centralization, they still have high confidence in validators and resiliency.
The purpose of this data is to provide the views of a very private group of participants, in their own words, in order to accurately reflect their needs. The survey will be conducted annually and feedback on the question set is welcome.
method
collection and distribution
Survey results were collected using LimeSurvey software. To ensure that questions continued to be relevant to respondents, branching display logic was used. We use cookies to prevent repeat engagement and CAPTCHA to prevent bot activity. The survey is open to the public and all responses are anonymous.
We solicited responses on EthStaker’s social channels (Reddit, Discord, Twitter, Farcaster), Obol’s Twitter account, and the public channels of the most popular Staking as a Service providers, hardware device providers, and client software. The survey was also published on the Beaconcha.in website, Rhino Review and Week in Ethereum newsletters. The survey was conducted between April 8, 2024, and May 6, 2024.
analyze
Only data from completed surveys will be used, incomplete surveys will be discarded. Results are manually checked for bot activity without discarding complete questionnaires. The data shown in the pie chart is the result of the answers to the multiple choice questions. Multiple-choice answers are represented by the star ✶unicode✶character✶ in the discussion.
sampling bias
While the data suggests a preference for home staking as opposed to more passive staking methods, this may be due to differences in participants and survey respondents. People who regularly participate in the staking community often manage configurations themselves. And those who don't manage their own configuration are less concerned because their validators generally don't require their immediate attention.
This information is more qualitative than quantitative because it relies on subjective data from a self-selected subset.
How extensive is the coverage of this data?
Public node crawlers show the number of Ethereum nodes to be between 6,000 and 11,000. These nodes are not all verification nodes. Many nodes are operated by professional operators. This investigation only targets stakers using their own funds, and the question is not relevant to professional operators. At the time of writing, the number of validating nodes using Rocket Pool is estimated at 1,832, which is calculated by subtracting the number of Allnodes from the number of nodes with node ether at the time of the staking snapshot. This can serve as a lower limit on the number of independent operators. Of the 1024 total responses, 868 came from stakers who claimed to control their node configuration, so we estimate that somewhere between 8% and 47% of node operators participated in this survey, but neither end of the range is likely. Please note that this percentage includes all node operators, including professional operators. This survey focuses on non-professional operators.
While it is easy to see the number of validators on the network, there is currently no way to accurately count the exact number of validators, independent operators, or network nodes (this is more of a feature than a bug). Node operators can self-identify their validators, but most independent operators and many professional operators do not.
result
Raw data can be queried here.
Respondent Profile
32% are Genesis stakers.
80% are home stakers and another 4% are a combination of home and remote staking.
84% do not hold significant funds in liquid tokens.
85% have not changed their primary staking method.
77% have 66% - 100% of their ether staked.
30% use smoothing pooling, 61% do not use smoothing pooling, and 9% are unfamiliar with the concept or unaware of the options relevant to them.
95% use Linux to run the validator ✶.
51% do not use staking software to set up validators. 27% use Rocket Pool, 15% DAppNode and 10% Eth Docker ("not using staking software" generally means they follow the guidelines and use systemd)✶.
85% never changed their staking method from the beginning.
Figure source: ethstaker Figure 1: When did you start running the validator?
Picture source: ethstaker Picture 2: Where do you stake? Do you hold LST?
Figure source: ethstaker Figure 3: Have you changed your staking method, and how many Ethereum coins have you staked?
Figure source: ethstaker Figure 4: Are you in a smoothing pool?
Figure source: ethstaker Figure 5: What operating system do you use for staking?
Figure source: ethstaker Figure 6: Have you ever used software to help you stake?
main focus
Key concerns include overwhelming customer risk, sub-optimal tax structure for staking, hardware device issues and key management ✶.
69% do not track their bandwidth and 78% are not sure if bandwidth has increased since Dencun.
Respondents spend an average of 3.4 hours per month (median 2 hours) maintaining their settings. Excluding the single outlier data point (x = 155 hours) with a z-score of 22, the average monthly maintenance time is 3.2 hours.
On a scale of 1-10, with 10 representing the greatest possible risk to a network, voters rated the risk of supermajority at 7.4 and the risk of centralization of staking at 7.2 (the scoring scale is modified for clarity adjusted).
When asked what percentage of Ethereum was expected to be staked in 2-3 years, the answers (n = 1003) averaged 49.4% of Ethereum.
When asked what proportion of ether staking they suspected was operated by independent operators like themselves, the answers (n = 924) averaged 15.9% of ether staking.
Figure source: ethstaker Figure 7: What practical issues are you most concerned about?
Figure source: ethstaker Figure 8: How much bandwidth does your node use?
Figure source: ethstaker Figure 9: How many hours do you spend on maintenance each month?
Figure source: ethstaker Figure 10: Risks faced by the network
perceived value and representativeness
89% think independent stakers are as important or more important to the network now than when they first started staking (11% think they are less important).
66% believe individual voters today gain more or as much benefit from participating in consensus voting as they did when voting first began (34% believe they receive less value).
When asked how well they felt their interests were represented in ongoing research and protocol development, the average score was 5.8 out of 10, with 10 being "well represented" and 1 A score of 0 represents "not at all represented" (scale adjusted for clarity).
50% believe that protocol research either ignores solo stakers or is largely incapable of helping solo stakers fight against monetary interests (19% said they are not concerned).
92% of people support or are neutral on the statement that the issuance curve needs to change to better incentivize decentralized staking (regardless of existing recommendations).
Figure source: ethstaker Figure 11: Value of individual pledges
Figure source: ethstaker Figure 12: Distribution and representation in the study
Image source: ethstaker Figure 13: Promotion for individual stakers
continue to participate
Supporting the Ethereum protocol (84%) was the primary motivation for staking initially, followed by earnings (81%) ✶.
65% plan to continue to increase their staking market share.
35% plans to continue to increase staking market share, but plans to stop adding new staking after certain external conditions are met.
31% do not plan to add new pledges.
62% said they have no plans to exit staking ✶.
Figure source: ethstaker Figure 14: Do you plan to add new staking?
Figure source: ethstaker Figure 15: How long do you expect the validator to continue running?
Where do stakers learn from?
69% use technical guides as their main source of learning (e.g. some websites, CoinCashew, Rocket Pool docs, client documentation)✶.
63% use EthStaker as their primary source of learning ✶.
53% use ethereum.org as their primary source of learning ✶.
The most common sources reported to be informed about necessary updates and protocol research (these two issues seem to be confused with each other, so we will discuss them together) are Discord, Explorer Notification Service, Twitter and Reddit, ethresear.ch and Podcasts, quite a few of them Some people specifically mentioned Daily Gwei✶.
Picture source: ethstaker Picture 16: From which channels did you learn about staking?
Figure source: ethstaker Figure 17: Which channels do you use to learn about the latest information and news?
Figure source: ethstaker Figure 18: Through which channels do you learn about the latest developments in protocol research?
Open questions: unresolved concerns
At the end of the survey, voters were given the opportunity to comment on what they felt was not adequately covered in the survey. The full answer is available from the original data, and an AI-assisted summary of the answer is provided here:
n = 204
Decentralization and centralization risks (n = 68): Many respondents were concerned about the centralizing effects of current protocol developments and the underrepresentation of single stakers. LST is seen as a centralizing force that would make independent node operations less attractive and feasible, while re-staking is a potential medium for centralization.
User experience, technical barriers, hardware (n = 46): There were many requests to simplify the staking process and make it easier for non-technical users. Additionally, concerns about bandwidth, IPV6 support needs, and the need for estate planning solutions were mentioned.
Issuance Curve Adjustment (n = 38): There are significant concerns about the impact of changing the issuance curve, particularly the impact it may have on independent operators, but there is also some support for the research direction. Many believe that falling yields will lead to conditions that will only benefit large centralized pricing entities.
Economic and Tax Impact (n = 28): Tax policy is a significant burden for single stakers, making single staking less economically viable than holding Liquid Staking Tokens (LST), which have more favorable tax treatment.
MEV (n = 24): There is disagreement among stakers on the issue of using MEVboost, with some choosing not to enable MEVboost due to ethical concerns. These interviewees advocated for other solutions and further research to address the problems posed by MEVs. MEV is considered a tool that has the potential to enable protocol capture by large central entities. Respondents called for stronger measures to prevent MEV from undermining Ethereum’s decentralized nature.
Privacy concerns (n = 15): Stakers are concerned that details of their operations (such as IP addresses and transaction content) will be exposed, compromising their privacy and security. Respondents want to develop and integrate privacy-preserving technologies. Respondents pointed out that the lack of privacy forces some creators to censor transactions, impacting the network's neutrality and inclusivity.
Demographics
95% self-identified as male.
90% consider themselves to be somewhat or largely technical.
74% don’t work in crypto.
88% of pledges originate from North America, Europe or Australia.
Figure source: ethstaker Figure 19: Technology background and employment industry
Picture source: ethstaker Picture 20: From which region do you stake?
discuss
Respondent Profile
These results are not surprising as independent operators, mostly tech elites from North America, Europe and Australia, use the Linux operating system. Many diversity initiatives exist across the staking community. Little is known about how, why, and what percentage of ether these operators use to run validators, as stakers are often reluctant to share information that could create security breaches.
The large number of Genesis participants, 80% of them being Home Stakers, 84% not holding any significant amount of liquid staking tokens, and 77% staking over 66% of all Ethereum is very encouraging. New data demonstrates independent operators’ high level of confidence and resiliency in staking.
Proportion of independent operators
A recent StakeCat report surveyed addresses identified as independent operators (see methodology for details) and determined that the proportion of independent operators on the network has increased since the merger. These survey data show that a significant portion of respondents (32%) have been staking since the Beacon Chain Genesis incident. Because the survey data comes from a self-selected subset of stakers, these findings are likely biased toward stakers who joined around Genesis, when EthStaker was the only comprehensive source of staking education and support.
As more protocols and products that improve user experience and provide their own support are introduced to independent operators, these latecomer stakers may interact less with the general staking community. This is ideal as software, education and support for independent operators is shifting towards diverse self-sustaining projects that may attract less "tech-savvy" operators.
morale
Since the Shapella hard fork enabled withdrawals, Ethereum’s staking slope has continued to increase over time, as has interest from professional entities in using delegated staking.
Figure source: ethstaker Figure 21: Ethereum staking over time: the slope increases significantly after Shapella
These specialized entities often benefit from economies of scale, as they can run hundreds or thousands of validators per node, thereby reducing the cost of hardware per Ethereum, whereas independent operators typically run hundreds or thousands of validators per node. Run single-digit or double-digit validators on the node. Large entities can also pool execution layer rewards to smooth their validator sets, while independent operators have only recently launched two separate validator smoothing pools. Specialty operators can also gain additional revenue by engaging in off-contract services that require more powerful hardware or operational expertise. These factors result in LST holders sometimes receiving higher rates of return than independent operators, even taking into account fees paid to marking service providers.
Respondents felt a sense of disenfranchisement when considering these results. They feel that their role in the network is just as valuable or even more valuable now than when they first participated, but they do not have the same sense of how the protocol values their participation. When asked how to safeguard their interests in protocol research, the majority of respondents’ views ranged between “no representation” and “well representation”, with a slight preference for the latter. More than half of respondents felt that researchers were either hostile, neglectful or ineffective in representing their interests. The majority of respondents expressed support for changes to the protocol's reward structure to redress what they saw as disenfranchisement (of course, this support did not necessarily imply endorsement of existing recommendations).
The “stickiness” of independent operators
Over the years, independent operators have been called "irrational actors" and "altruists", with some arguing that the pledges they operate are more "sticky" than the inputs of delegated pledgers. This survey cannot compare the two groups, but respondents did express a desire to continue staking regardless of small fluctuations in APR or changes in the broader staking ecosystem.
While the majority of respondents expected to continue staking in the event of any positive returns, 21% stated that they had a specific return threshold at which they would quit (n = 184). The average yield is 2.3%*.
(*As a side note, this number should be understood as a departure from the rational desire to keep yields high, as some stakers have stated that they are currently running validators but will unpledge at a threshold we have long passed, suggesting that some Pledgers may not be actively tracking their current actual yield).
This reluctance to de-stake, combined with the original ideological motivation for de-staking (“support the Ethereum protocol”), is often cited as “altruism” on the part of independent operators. It’s important to note that their inertia may work both ways. Independent operators are unlikely to unwind holdings when there is a small movement in the market or issuance volumes, but are equally unlikely to bring holdings back online after unwinding them, even if conditions become slightly more favorable. Therefore, their losses are likely to be more lasting than losses from mandated holdings. Independent operators' overreliance on altruistic motives rather than structural fairness is likely to see this segment of shareholders disappear over time.
A series of airdrops targeting independent operators in 2023 and 2024 have recognized the current disparity in rewards and power between independent operators and professional operators, and the value of retaining independent operators in the network. These one-time incentives are helpful in the short term, but they should not be relied upon to close the gap in the long term.
Looking to the future
StakeCat’s recent report shows that people’s desire for solo staking (Solo Staking) is as strong as ever, and the ratio of independent operators to professional operators has remained relatively stable or even increased over time. Given the centralization pressures currently emerging in protocol design, many recent studies have attempted to retain meaningful participation by independent operators. These recommendations should rely heavily on insights gained directly from the motivations and concerns of independent operators – this survey and report are designed to provide these data for brainstorming and research purposes.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "Deep Wave TechFlow"
Original author: nixo
