Valid Points: Price Dips, 60K Validators and Eth 2.0’s ‘Graffiti’ Messages

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It’s been a tough start to the week for crypto investors, although the numbers are back on the up.

Eyes were eager to see a new all-time high for ether that did not materialize as the bitcoin miners largely pulled the price rug out from under the entire crypto market last weekend.

But let’s not despair too much. There is a lot to talk about in the world of Ethereum 2.0. This week we’re going to look at some network stats that continue to show healthy growth across several key metrics such as active validators and slash events. After that, we’re going to look at the role of Graffiti Messages – the secret notes you can sign for on-chain messages.

Pulse check

Source: Beaconcha.in, Dune Analytics and Staking Rewards (data from January 12th, 2021 at 19:20 UTC)

Ethereum investors are still lifting their teeth off the ground after a 30 percent drop in the price of the cryptocurrency over the weekend from a high of $ 1,334 to $ 926, according to data from CoinDesk 20.

And while red became the unofficial color of many DeFi (decentralized finance) users, Eth 2.0 stakers kept swaying in this sweet, sweet ether. In fact, Eth 2.0 is spewing steady rewards regardless of market conditions, and funds are locked for at least a year or more. So what do you have to worry about in the short term, right?

Looking at the network, the total amount of ether used on the network has increased about 5% since Jan 5th, although the total value of the contract decreased by about $ 2 million as the price of ether fell.

The Beacon Chain also has a 98% network participation, which means the network is doing well. According to Beaconcha.in, there are almost 60,000 active validators on Eth 2.0 as well.

After all, Eth 2.0 went almost a full week without a bat event. Unfortunately, the validator 57976 could not correctly confirm a vote and was then shortened and removed from the validator pool. According to Beaconcha, this event follows on from 35 other slashing events so far.

New frontiers

The start of a new blockchain is a historic event. For this occasion, a small note is often included in the Genesis block of the chain. For example, the first block of Bitcoin contained the following Times heading:

The Times 03 / Jan / 2009 Chancellor on the verge of second bailout for the bank

A note also accompanied the launch of Ethereum 2.0 on December 1st. In the end, however, it was less dramatic than Satoshi Nakamoto’s call to arms against central banks: “Mr. F was here, ”is the graffiti on the block.

As Trustnodes reported, Mr. F. is a decentralized application developer (dapp) who happened to be in the right place at the right time. No, it doesn’t matter. However, according to Vitalik Buterin, co-founder of Ethereum, it fits in pretty well with the quirky nature of the Ethereum community.

You may be wondering what “graffiti” is – at least what it is in the context of blockchains. The Eth 2.0 specification describes graffiti as essentially arbitrary data with no “protocol-level significance”. Graffiti is signed on the block Level compared to other arbitrary data inclusion points on the transaction Level.

So far, graffiti has mainly been used by stakeout companies to identify the blocks they have validated. A few trite jokes have been added here or there, such as “Why hodl, when you can put -P?”

Any on-chain data

There are several ways to include data such as signed messages on the Eth 1.x blockchain, Teku project owner at ConsenSys Ben Edgington told CoinDesk in a direct message.

The additional data field is possibly the best continuation of the graffiti field as both occur at the block level and allow a limited amount of any information to be entered, he said.

(You can also upload information in a separate function, Ethereum’s data field, similar to Bitcoin’s op_return function. These functions work at the transaction level rather than the block level, Edgington said. Eth 2.0 can’t send transactions yet, so it works this function does not exist).

Storing random arbitrary data is easier with Ethereum than Bitcoin, Edgington said.

In fact, Buterin and most Ethereum developers have never dealt too much with the so-called “bloating” of the blockchain with data compared to Bitcoin developers, as CoinDesk reported in 2014 during the op_return conflict. Data can be stored in the chain as long as the necessary fee is paid.

“The miner’s ability to pack a small amount of arbitrary data into a block has always been a feature of Ethereum and has been undisputed. It’s typically used for entering data into smart contracts, but it doesn’t have to be, ”Edgington said.

Validated takes

  • Bitcoin Goes Institutional, Ethereum Spreads Its Wings: CoinDesk Q4 2020 Review (Research, CoinDesk)
  • Scaling Solution Hermez Network Adds Tether Tokens to Handle High Ethereum Fees (Article, CoinDesk)
  • Ethereum at $ 1000, Redux (blog post, Evan van Ness)
  • DeFi Top 20 with Arthur0x, Su Zhu and Hasu – Part Two (Podcast, Uncommon Core)
  • Why we need broad acceptance of social recovery wallets (blog post, Vitalik Buterin)
  • An incomplete guide to rollups (blog post, Vitalik Buterin)

Factoid of the week

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We will shortly be including data directly from CoinDesk’s own Eth 2.0 validation node in our weekly analysis. All profits from this stake will be donated to a charity of our choice once the transfers are activated on the network. A full overview of the project can be found in our announcement post.