Author: Tom Whitton, CoinDesk; Translated by: Baishui, Golden Finance
As the staking industry matures and more node operators enter the market, the need for performance metrics becomes increasingly important to gain a competitive advantage. The Ethereum staking rate is the closest to the “risk-free rate” for digital currencies.
Institutional staking service operators, such as Pier Two (where I serve as CFO) and Figment, are committed to providing security and stability to the Ethereum ecosystem while offering best-in-class staking returns to their customers.
Learn about CESR
The CESR (Combined Ethereum Staking Rate) benchmark is an increasingly respected metric created by CoinDesk Indices and CoinFund. CESR measures the average staking rate on the Ethereum network, providing a reliable performance measure for operators and stakers. By comparing staking rates to CESR, operators can objectively assess their competitiveness and efficiency.
Why Benchmarks Matter
Benchmarks are important in financial markets to create structure, standardization, and comparability for many financial products, including ETFs. The CESR is a useful rate for issuers looking to provide ETH staking funds, as well as validators who want to participate in performance monitoring or swaps to lock in an interest rate and build a more sustainable, less volatile business model.
How operators use the CESR benchmark
1. Performance Benchmarks
CESR provides operators with a metric to measure their validator performance to compare it to the broader network. By comparing their returns to a trusted industry benchmark, operators can identify areas for improvement and optimize their operations, as well as differentiate their staking products in a competitive market.
The CESR benchmark promotes healthy competition among operators. Operators with high performance will receive more commissions, while operators with low performance will be incentivized to improve their performance to remain competitive.
2. Market monitoring and strategic insights
CESR enables operators to gain deeper insight into the Ethereum ecosystem. By monitoring trends, operators can make informed strategic decisions and adapt to market conditions and network changes (including the recent Shapella and Dencun upgrades).
The CESR benchmark demonstrates that well-managed operators can achieve consistent returns despite market and network volatility. This highlights the value of robust operational practices and vigilant monitoring.
3. Enhance infrastructure performance with Rated RAVER
Reliable and well-performing infrastructure is key to success. Operators must leverage high uptime, low latency, and strict operating protocols to maximize staking efficiency and returns. Using Rated’s Validator Effectiveness Rating (RAVER) helps measure these factors, taking into account uptime, participation in consensus, and overall reliability.
By using CESR as an industry signal and Rated’s RAVER metric to measure infrastructure performance, institutional pledge service operators can optimize to maintain a competitive advantage. This comprehensive approach enables operators to continually fine-tune strategies and operations to further enhance services.
Summarize
The CESR benchmark provides operators with a tool to measure and improve their performance in the Ethereum ecosystem. By leveraging the CESR along with operational metrics like Rated RAVER, operators can achieve greater transparency, trust, and efficiency. As the Ethereum network continues to grow, these benchmarks will play an increasingly important role in guiding and evaluating validators’ success. Global market participants, validators, and financial institutions will continue to use the CESR as they participate in products that leverage Ethereum as the first cornerstone of the Internet for financial returns.