Full guide on the Solana Gas settings for BullX Neo
Understanding Gas Settings on Solana
Unlike Ethereum, Solana doesn’t use the term “gas” in its native terminology, but the concept is similar – fees paid to prioritize and execute transactions. On Solana, these settings are typically divided into several components that sniper bot users must understand and configure:
Priority Fees: Extra payments to validators to prioritize transaction processing
Bribe Fees: Additional incentives for validators or specialized networks
MEV Settings: Configuration for Maximal Extractable Value optimization
Slippage Tolerance: Maximum acceptable price deviation during execution
BullX Neo Gas Configuration System
BullX Neo, one of the most popular Solana sniper bots, offers a sophisticated gas configuration system with multiple parameters that users can adjust based on market conditions and trading objectives.
Priority Fee (PRIO)
The priority fee in BullX is an extra payment to validators to prioritize transaction processing, especially critical during network congestion:
Default Value: 0.01 SOL
Configuration Options:
Rapid Preset: Sets a moderate priority fee for faster confirmations
Insane Preset: Sets a higher priority fee for the fastest possible confirmations
Custom: Allows users to specify their own priority fee amount
Priority fees are particularly important during high-demand events like token launches or market volatility, where transactißon speed can determine profitability.
Bribe Fee (BRIBE)
The bribe fee is an additional incentive provided to validators (or the Jito network) to further prioritize transaction execution:
Default Value: 0.01 SOL
Functionality: Significantly improves transaction confirmation speed, especially when using MEV Only Mode
Recommendation: For competitive sniping during token launches, experienced traders often set bribe fees between 0.01-0.05 SOL depending on expected competition
MEV Only Mode
BullX offers a specialized MEV (Maximal Extractable Value) Only Mode that routes transactions exclusively through Jito’s infrastructure:
Disabled (Default): Transactions are broadcast to both Jito and standard Solana block leaders
Enabled: Transactions go only to Jito’s infrastructure, potentially reducing sandwich attacks but requiring higher bribes
When MEV Only Mode is enabled, BullX automatically adds a static 0.002 SOL on top of any user-defined bribe to improve broadcasting reliability.
Comparative Settings for Different Scenarios
MEV Only Mode (Enabled)
Higher Bribe Recommended: Above 0.01 SOL to ensure transaction prioritization
Protection from Sandwich Attacks: Transactions are processed in an MEV-optimized environment
Variable Transaction Speed: Might slow down if bribe is too low; increase the bribe to speed it up
Priority Fee: Less critical for Jito, since the bribe is the primary factor for prioritization
MEV Only Mode (Disabled)
Lower Bribe Suffices: Transactions also go to standard block leaders, so even a small bribe may still get through quickly
Faster Transaction Speeds: Often confirmed more quickly if the network isn’t too congested
Wider Distribution: Transactions are broadcast across multiple validators and routes
Slippage Limit
Slippage is the difference between the expected trade price and the actual executed price:
Configuration: Users set a maximum slippage percentage they can tolerate
Example: If set to 1000%, users accept up to 1000% price deviation
Recommendation: For volatile memecoins, experienced traders often set high slippage (500-1000%) to ensure execution, while more stable tokens may use lower settings (1-5%)
Advanced Network Routing in BullX
BullX implements sophisticated network routing technologies to enhance transaction reliability:
Blockchain Distribution Networks (BDNs)
BullX leverages specialized routers designed to broadcast transactions with high reliability:
HyperRouter: BullX-exclusive BDN with global edge coverage
BloxRoute: Alternative service used as backup
Stake-Weighted Quality of Service (SWQoS)
This mechanism optimizes transaction propagation based on stake weight:
MEV Mode: A static 0.002 SOL is added to the set bribe
Non-MEV Mode: Bribes are distributed across multiple routers in increments of 0.0001 SOL
Optimal Gas Settings for Different Trading Scenarios
Token Launch Sniping
Priority Fee: 0.05-0.1 SOL
Bribe: 0.05-0.1 SOL
MEV Mode: Enabled for protection against sandwich attacks
Slippage: 500-1000%
Regular Trading During Normal Conditions
Priority Fee: 0.001-0.005 SOL
Bribe: 0.001-0.005 SOL
MEV Mode: Disabled (unless specifically concerned about front-running)
Slippage: 1-5% for established tokens
High Volatility Trading
Priority Fee: 0.01-0.05 SOL
Bribe: 0.01-0.05 SOL
MEV Mode: Situational (enabled for protection, disabled for speed)
Slippage: 10-50% depending on token volatility
Gas Settings in Other Popular Solana Sniper Bots
Maestro Bot
Uses similar priority and bribe fee mechanisms
Offers preset configurations for different network conditions
Includes an “Auto” mode that dynamically adjusts fees based on network congestion
Trojan Bot
Emphasizes MEV protection with specialized routing
Provides more granular control over transaction routing
Includes validator-specific optimization options
Sniper.sol
Focuses on minimizing fees through optimized transaction bundling
Offers “stealth mode” to reduce front-running risk
Includes automatic fee adjustment based on historical success rates
Common Pitfalls and Optimization Strategies
Underpaying Fees
Problem: Transactions get stuck or execute too slowly
Solution: Start with higher fees and gradually reduce them as you learn the minimum effective amounts
Overpaying Fees
Problem: Unnecessary reduction in profitability
Solution: Test different fee levels during similar market conditions to find optimal settings
Ignoring Network Conditions
Problem: Settings that work during normal conditions fail during congestion
Solution: Create multiple presets for different network states and monitor congestion indicators
Neglecting MEV Protection
Problem: Transactions get front-run by other bots
Solution: Use MEV-only mode for high-value opportunities, especially when price impact is significant
Conclusion
Gas settings on Solana sniper bots like BullX represent a critical aspect of trading strategy that directly impacts execution speed, success rate, and profitability. The optimal configuration varies based on market conditions, token characteristics, and specific trading objectives. Successful traders typically develop multiple presets for different scenarios and continuously refine their settings based on performance data and changing network dynamics.
This article explores the intricate relationship between transaction prioritization, validator incentives, and Maximal Extractable Value (MEV) on the Solana blockchain, with a particular focus on how these mechanisms impact sniper bot operations and overall network dynamics.
Priority fees on Solana represent an optional fee mechanism that allows users to incentivize validators to include their transactions in blocks more quickly. Unlike the fixed base fee of 5,000 lamports per signature, priority fees are dynamic and market-driven, priced in micro-lamports per compute unit.
The priority fee is calculated using the following formula:
Priority Fee = Compute Unit Limit × Compute Unit Price
Where:
Compute Unit Limit: The maximum number of compute units the transaction can consume
Compute Unit Price: The amount (in micro-lamports) the user is willing to pay per compute unit
Technically, priority fees are implemented through the Compute Budget Program, which allows developers to:
Set the compute unit limit for a transaction
Specify the price per compute unit they’re willing to pay
This creates an economic incentive for validators to prioritize transactions with higher fees per compute unit, especially during periods of network congestion.
Economic Impact on Validators
Priority fees have significantly altered the validator economics on Solana:
Additional Revenue Stream: Validators now receive income beyond the standard inflation rewards and base transaction fees.
Competitive Prioritization: Validators are economically incentivized to include transactions with the highest fee per compute unit first, creating a market-based mechanism for transaction ordering.
Validator Behavior Modification: The introduction of priority fees has led validators to optimize their transaction selection algorithms to maximize fee revenue.
Recent governance proposals have sought to adjust the priority fee structure to reward validators with 100% of the fees collected (rather than burning a portion), ensuring validators are appropriately incentivized to maintain network security and performance.
Maximal Extractable Value (MEV) on Solana
Understanding MEV in the Solana Context
Maximal Extractable Value (MEV) refers to the value that can be extracted by validators and network participants through the strategic ordering, inclusion, or exclusion of transactions within blocks. On Solana, MEV manifests differently than on Ethereum due to the blockchain’s unique architecture:
Parallel Transaction Processing: Solana’s ability to process non-conflicting transactions in parallel changes how MEV can be extracted.
Sub-Second Block Times: With slots occurring approximately every 400ms, the window for MEV extraction is much narrower than on other blockchains.
Leader Schedule Predictability: Solana’s deterministic leader schedule allows MEV extractors to target specific validators.
Common MEV strategies on Solana include:
Front-running trades on decentralized exchanges
Sandwich attacks (placing orders before and after a large trade)
Arbitrage between different liquidity pools
Liquidation sniping in lending protocols
MEV’s Impact on Network Performance
According to research by Jito Foundation, MEV activities have had a significant impact on Solana’s network performance:
Over 30% of transactions on Solana are from arbitrage bots
In some epochs, 60% of block compute resources are consumed by arbitrage transactions
More than 98% of arbitrage transactions fail, meaning validators waste approximately 58% of their processing time on failed MEV attempts
This inefficiency creates network congestion, increases transaction failures for regular users, and degrades the overall user experience during periods of high volatility.
The Bribe Economy: How Transactions Get Prioritized
Direct Validator Incentives
The term “bribes” in the Solana ecosystem refers to the economic incentives provided to validators to prioritize certain transactions. These incentives take several forms:
Priority Fees: The official, protocol-level mechanism for transaction prioritization.
Direct Validator Payments: Some high-frequency traders establish relationships with validators and pay them directly (off-chain) for preferential treatment.
Specialized MEV Infrastructure: Services like Jito Labs provide infrastructure that allows validators to capture MEV and share the profits with stakers.
A notable example of the scale of these incentives occurred during the launch of the TRUMP token in January 2025, when validators reportedly received over 100,000 SOL (worth millions of dollars) in priority fees and MEV rewards over just two days of active trading.
Transaction Bundles and MEV Extraction
To address the inefficiencies of the current MEV landscape, specialized infrastructure has emerged:
Jito-Solana: A fork of the Solana validator client optimized for efficient MEV extraction, which supports “bundles” that allow traders to specify the exact ordering of their transactions.
BloXroute’s Order Flow Relay (OFR): A system that injects transactions directly to validators without exposing them to public mempools, reducing the risk of front-running.
Searcher-Validator Relationships: Advanced MEV extractors (“searchers”) develop direct relationships with validators to gain priority access to block production.
These mechanisms create a more efficient market for transaction ordering, potentially reducing the spam and failed transactions that currently plague the network.
Implications for Sniper Bots
Competitive Advantage Through Fee Optimization
For sniper bots, understanding and optimizing around Solana’s priority fee and MEV landscape is crucial:
Dynamic Fee Calculation: Sophisticated bots implement algorithms that adjust priority fees based on network congestion, potential profit, and competitor behavior.
Validator Targeting: Some bots specifically target transactions to validators known to be running specialized MEV infrastructure.
Bundle Strategies: Advanced bots utilize transaction bundles through services like Jito to ensure precise ordering of their transactions.
Private Mempools: Top-tier sniper operations use private transaction routing to avoid having their strategies front-run by competitors.
The Arms Race Dynamic
The relationship between sniper bots, validators, and MEV infrastructure creates an ongoing arms race:
Increasing Sophistication: As basic strategies become commoditized, bots implement increasingly complex approaches to maintain an edge.
Infrastructure Investment: The most successful operations invest heavily in low-latency connections, private RPC nodes, and direct validator relationships.
Fee Escalation: During high-value opportunities (like token launches), priority fees can spike dramatically as bots compete for inclusion.
Specialized Validator Selection: Some bot operators stake to (or run their own) validators to gain advantages in transaction processing.
Future Outlook and Ecosystem Evolution
Governance and Protocol Changes
The Solana ecosystem continues to evolve in response to MEV and priority fee dynamics:
Fee Distribution Proposals: Recent governance proposals have suggested adjusting how priority fees are distributed to better align validator incentives with network health.
MEV-Aware Protocol Design: New protocols are increasingly designed with MEV considerations in mind, implementing mechanisms to reduce harmful extraction.
Validator Specialization: The validator ecosystem is likely to continue specializing, with some validators optimizing specifically for MEV capture.
Balancing Efficiency and Fairness
The challenge for the Solana ecosystem is balancing the efficiency gains of market-based transaction ordering with concerns about fairness and accessibility:
User Experience Considerations: Ensuring that regular users can still access the network during high-congestion periods without paying exorbitant fees.
Validator Decentralization: Preventing MEV extraction from centralizing the validator set around a few highly-optimized operators.
Sustainable Economics: Developing fee and MEV capture mechanisms that provide sustainable economics for validators without excessive extraction from users.
The evolution of these mechanisms will significantly impact the future landscape for sniper bots, traders, and all participants in the Solana ecosystem.
TOKEN2049 Dubai will take place at Madinat Jumeirah from 30 April – 1 May 2025, bringing together 15,000 attendees from across the globe for an unparalleled festival experience
TOKEN2049 – the world’s largest crypto event – will bring together 15,000 attendees from over 4,000 companies and more than 160 countries in Dubai. With demand for tickets at unprecedented levels, prices will increase ahead of schedule on Thursday 3 April. Following the resounding success of the 2024 edition, the event is once again on track to sell out weeks before the opening day on 30 April.
TOKEN2049 Dubai 2025 is scaling up significantly, transforming its unique indoor-outdoor venue at the luxurious Madinat Jumeirah Resort into an extraordinary, festival-like environment. Attendees will experience a spectacular new outdoor Amphitheater Stage, expansive exhibition and networking areas, and thrilling activities such as a zipline soaring from an 18-meter tower over the iconic Fort Island. Exclusive wellness experiences, including ice baths, IV drips, and fresh hand-carved coconuts, will further elevate the attendee experience.
While set to be the most immersive experience TOKEN2049 has ever delivered, the event will also feature an all-star lineup of speakers and side events. The back-to-back agenda will serve as the industry standard for exploring the frontiers of the digital asset ecosystem.
Alex Fiskum, Co-Founder of TOKEN2049, said: “TOKEN2049 Dubai is already surpassing last year’s extraordinary demand, set to reach capacity weeks before we open doors. This will truly be a landmark global gathering, redefining what attendees expect from industry events. We’re redefining the conference experience, pushing boundaries to provide the world’s best environment to connect, exchange ideas, network, and shape the future of the industry. We strongly encourage everyone planning to attend to secure tickets now, as a complete sell-out is imminent. We can’t wait to welcome our global community to Dubai next month”
Haider Rafique, CMO of OKX, commented: “TOKEN2049 has injected fresh momentum into the crypto industry, inspiring a new wave of entrepreneurs, developers, creators, and curious investors. The exceptional programming helps steer our industry away from speculation and toward genuine innovation and meaningful collaboration. At OKX, we’ve set the standard for compliance, security, and transparency—core values reinforced by our partnership with TOKEN2049. Together, we’re spotlighting the companies that do things right, setting a new narrative for the future of crypto. We look forward to seeing everyone in Dubai!”
The first 100 headline speakers have already been announced, with more than 200 global thought leaders, innovators, and influential voices set to take the stage. Early confirmed speakers include The Network State author Balaji Srinivasan, Binance CEO Richard Teng, Tether CEO Paolo Ardoino, Maelstrom CIO Arthur Hayes, and Circle CEO Jeremy Allaire among others. Additional major speaker announcements are scheduled in the coming weeks, building excitement and anticipation as the event approaches.
Over 200 industry-leading exhibitors have also been confirmed – they will showcase their innovations throughout the most immersive TOKEN2049 exhibition to date. Title Sponsors include OKX – a leading technology company building a decentralized future; Binance – the largest crypto exchange by trading volume and users; BloFin – a global, secure, and user-first platform for premium futures trading, Spacecoin – a decentralized internet satellite network using blockchain technology for global connectivity, MEXC – a global exchange known as “Your Easiest Way to Crypto,” and KuCoin: Shaping the Future of Crypto.
Complementing the main event, TOKEN2049 Week will showcase an impressive roster of more than 500 side events throughout Dubai, including exclusive networking events, parties, hackathons, workshops, and investor meetups. The full side events calendar is available online.
Tickets are quickly running out. Reserve your ticket today at dubai.token2049.com/tickets.
About TOKEN2049
TOKEN2049 is a global Web3 event series, organised semi-annually in Singapore and Dubai, where decision-makers in the global crypto ecosystem connect to exchange ideas, network, and shape the industry. TOKEN2049 is the preeminent meeting place for entrepreneurs, institutions, industry insiders, investors, builders, and those with a strong interest in the crypto and blockchain industry.
Yellow Network ($YELLOW) is a decentralized Layer-3 peer-to-peer mesh network that enables real-time, cross-chain trading by allowing brokers to communicate, trade, and aggregate liquidity without relying on block creation. They have recently launched their testnet and Galxe campaign, which would pave the way to a potential $YELLOW token airdrop! Here is our Yellow Network ($YELLOW) token airdrop guide.
What is Yellow Network ($YELLOW)?
Yellow Network ($YELLOW) is a decentralized system that lets brokers trade and share liquidity across different blockchains in real-time without needing to create new blocks. Here are some of its main features.
Decentralized Trading: Yellow Network enables genuinely decentralized trading by allowing participants to swap assets across different exchanges without relying on block creation.
Layer-3 Mesh Network: It operates as a decentralized Layer-3 peer-to-peer mesh network, facilitating communication, trading, and liquidity aggregation among brokers.
State Channel Technology: Utilizes state channel technology for real-time settlement between brokers, enabling cross-chain trading without the need to bridge assets.
Scalability and Efficiency: Improves blockchain throughput by reducing the computational load on nodes, making it easier to run a node and decentralizing the certification process.
How to get the Yellow Network ($YELLOW) token airdrop?
Here is a step by step guide on how to get the Yellow Network ($YELLOW) token airdrop
Make sure you are on the Ethereum, Linea or Polygon networks, select the amount you wish to lock up and click “Lock”. Note that Season 1 of this campaign is live until 11th November 2024.
Verify task
Go back to Yellow Network’s Galxe page and verify the task.
Complete social tasks
Follow Yellow and Twitter and interact with their posts as per the Galxe tasks. Remember to verify your tasks in order to earn points.
Visit pages
Visit the pages specified on Yellow Network’s Galxe page and verify the task.
Refer friends
Refer your friends to participate in Season 1: The Future.
SunPump ($SUN) is the world’s first platform dedicated to the fair launch and trading of meme coins, offering a user-friendly, low-cost, and secure environment for creators and traders on the TRON network. The SunPump platform is part of SUN.io, Tron’s first decentralized autonomous platform integrating stablecoin and token exchanges whilst supporting liquidity mining. Here is our review on everything you wanted to know about SunPump ($SUN).
What is SunPump?
SunPump is a platform on TRON that facilitates the fair launch and trading of meme coins. It offers creators an accessible, low-cost way to create their own meme coins in a secure and user-friendly environment. Here are SunPump’s main features:
One-click token generation: Users can easily create meme coins by providing a token name, symbol, image, and paying a small fee.
Bonding curve mechanism: SunPump adjusts prices based on token supply, ensuring fairness and transparency.
Instant market access: Newly created tokens are immediately listed, allowing seamless buying and selling.
Liquidity and token burn: When a token’s market cap meets specific criteria, SunPump injects liquidity funds into SunSwap and executes a token burn.
Transparency: All transactions are public, allowing users to monitor activity. Additionally, SunPump has introduced a gas fee reduction program to make participation more accessible.
Fees
SunPump charges its fees at a very competitive rate for both meme coin creators and traders. SunPump fees are as follows:
Trading fee: There is a 1% trading fee on transactions conducted on the SunPump platform.
Creation fee: SunPump charges a creation fee of around 20 $TRX for launching a memecoin on the platform.
Liquidity fee: When a project reaches 100% of the Bonding Curve, the smart contract will automatically add around 100,000 TRX and 200 million tokens to the SunSwap V2 liquidity pool, deducting about 3,000 TRX as a liquidity addition fee.
Deposit/withdrawal fees: SunPump does not charge any additional deposit/withdrawal fees aside from the usual gas fees for blockchain transactions.
What is the SUN.io ($SUN) token?
The SUN.io ($SUN) token is the platform’s native token. As a governance token, $SUN grants holders voting rights to influence the platform’s direction, including decisions on upgrades and protocol updates. The $SUN token can also be locked up to earn veSUN rewards. In turn, holding veSUN entitles to multiple rewards such as TUSD rewards, accelerated liquidity pool mining and voting rights to decide the weights of liquidity pools.
How does SunPump work?
SunPump’s main features for traders are they they provide a secure and verifiable token contract, with no presale and no team allocation. You can trade on SunPump in 5 simple steps as follows:
Explore Meme Coins: Visit the SunPump platform and browse through the available meme coins.
Select a Coin: Choose the meme coin that interests you the most.
Purchase Tokens: Use the Bonding Curve mechanism on the platform to buy tokens.
Trade Tokens: You can sell your tokens at any time to lock in profits or cut losses.
Engage with the Community: Participate in community activities to help increase the market value of your chosen meme coin.
Is SunPump safe?
SunPump launched just 11 days ago on the Tron network, has already generated over $1 million in revenue. While SunPump itself hasn’t been hacked, remember that investing in highly volatile meme tokens carries risks, so users may want to always be cautious.
Conclusion: Pros and Cons of SunPump
SunPump ($SUN) is a world’s first platform on TRON that facilitates the fair launch and trading of meme coins. Here are some of SunPump’s main pros and cons.
Pros
One-Click Token Generation: Creators can easily create meme coins by providing a token name, symbol, image, and paying a small fee.
No token presale: The benefit of no token presale means the token launch is more fair and allows for wider community participation.
No team allocation: This prevents concentration of pair and ensures a fairer ecosystem. In addition, it means team members are motivated to work for the project’s success without a guaranteed allocation and will only be rewarded on the project’s performance.
Bonding Curve Mechanism: SunPump adjusts prices based on token supply, ensuring fairness and transparency.
Instant Market Access: Newly created tokens are immediately listed for seamless buying and selling.
Transparency: All transactions are public, allowing users to monitor activity.
Gas Fee Reduction Program: SunPump introduced the gas fee reduction program to make participation more accessible.
Cons
Inherent Risks: Meme coins can be subject to price manipulation and fraudulent activities such as hacks.
Costs: SunPump charges a creation fee for launching meme coins, and there’s a 1% trading fee on transactions.
Space for Improvement: While successful, SunPump may need ongoing enhancements to address challenges. However, SunPump has only recently launched so it’s expected they will continuously improve on their platform.
Myria nodes are primarily used for gaming based layers, often referred to as Layer 2, which is essentially a scaling solution designed for games. The main function of these nodes is to promote the concept of zero gas fees.
Becoming a node owner enables you to directly generate Myria. Additionally, as a node holder, you will also receive daily Myria rewards, voting rights, and NFTs. The more nodes that are online, the more the rewards slightly drop.
Myria Node Tutorial
https://youtube.com/live/_jJFrtaUAbk
Acquire Myria tokens which can be converted to U.S. dollars or USDT. Tokens can be purchased and sold on both centralized and decentralized exchanges, such as Bybit or Uniswap.
Calculate the expected return and the break-even point. A rough calculation can be obtained by multiplying daily rewards by 28 (days of a month). The quantity may decrease as more nodes join. This data provides a general estimate, and the price of Myria could change over time.
Running a node is a technical task that will require some learning. Two strategies include running it on an old PC or with DigitalOcean.
Connect your wallet to the Myriad node. Once connected and signed in, transfer your Myria tokens, taking note of the specific value and associated transaction fee.
Myriad is a gaming-specific blockchain, often referred to as Layer 2. Myriad Node acts like a highway, allowing faster transactions and reduced costs by limiting the amount of information it reports back to Ethereum.
Proceed with the purchase of the Myriad Node using the Myriad tokens deposited.
Download the Myriad node client suitable for your operating system (Windows/Mac/Linux). Run the install process until it’s completed.
Enter your Myriad Node API Key into the installed Myriad Node client. You can locate your Node API Key within your Myriad account.
Key Updates for Myria
Metarush reached a new milestone with the first-ever closed demo in February 20231.
The Myria lore received new chapters in March 20231.
The Myria Whitepaper was released in March, providing detailed information about the ecosystem, tokenomics, and various features1.
The MYRIA token went live in early April, launching first on the OKX exchange and then on KuCoin, Gate, MEXC, Bitmart, and Uniswap1.
The founders, Andrew and Brendan, discussed the biggest crypto highlights of 2023
Phemex is a professional-grade Cryptocurrency exchange offering both Bitcoin spot and options trading. The exchange offers an innovative zero-fee trading model where fees are not charged per transaction. Phemex also offers Bitcoin, Ethereum, and Chainlink Perpetual futures. The exchange is built by ex-Morgan Stanley executives, aiming at providing institutional-grade trading tools and security. Derivatives trading allows traders to increase their exposure to certain assets and the ability to “short”.
Key Features of Phemex
Free trades on Spot Exchange (Premium account)
Institutional grade trading and security
Robust trading insurance
Free deposit fees
Ability to Leverage up to 100X margin
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Phemex Spot Exchange & Free trades
One of the key advantages of Phemex exchange is the ability to have free zero fee trades. This concept is groundbreaking for the cryptocurrency exchange industry because the previous model charged trading fees for both buying and selling crypto. These fees would add up over time, with many traders paying thousands of dollars to cryptocurrency exchanges. With Phemex, these traders can take advantage of the zero fee trading model and only pay a monthly premium of $9.99 USD per month. This is a huge game changer for cryptocurrency daytraders and technical analysts.
Phemex is also offering a US$6,050 sign up bonus, as well as 2 BTC and 10,000 USDT in trial funds! Sign up here.
I think that this is a trend and responsibility of exchange is to reduce fees for small capital users And, for the institutional clients, they willing to pay more fees, but to have a better service, like data-wise, analysis wise, right? So that’s two different groups. So we, and we announced our zero fee permission, they just to benefit our retail customers.
Jack Tao, CEO of Phemex
Bitcoin Perpetual Futures
The core trading product offered by Phemex is cryptocurrency derivatives trading such as Bitcoin Perpetual Futures. Derivatives are financial tools that derive value from the underlying product – in this case cryptocurrencies such as Bitcoin. Phemexexchange trades contracts based on the underlying asset instead of the asset themselves – this allows higher leverage and more types of products. Phemexallows up to a 101X max leverage on derivative products. This means a 1% change in the price of Bitcoin could result in 100% change in the funding amount – potentially allowing traders to double or nothing on the exchange. This type of leverage is popularized by the BitMEX exchange which also allows 100X leverage.
Supported Countries
Phemex exchange does not offer its services to the following countries: US, UK, Canada, Cuba, Crimea, Sevastopol, Iraq, Yemen, Iran, Syria, North Korea, South Korea, Sudan, China, Hong Kong, Republic of Seychelles, and Bermuda.
Supported Cryptocurrencies
Phemex only 6 cryptocurrencies for the time being: Bitcoin, Ethereum, Ripple, ChainLink, Tezos, Litecoin. Though for contracts, Phemex also does offer a GOLD/USD trading pair.
Phemex Trading take profit orders and stop-losses
One of the key advantages of Phemex is use of stop-loss and take profit orders. These orders allow professional traders to fine-tune their trading strategies and set up opportunities to take profit or stop-loss. By default, Phemex has quick options to take profit at 25%, 50%, 75% and 100% profit. These can be set when the initial position is established with a clear indication the mark price and estimated profit or loss. It’s important to remember that when take profit or stop losses are triggered, the position will be sold as a market order – meaning that the algorithm will automatically match a trade even if it’s not at the same price.
Phemex Fees
Trading Fees
The standard contract trading fees on Phemex is set at 0.01% for makers and 0.05% for takers. Whilst standard spot trading fees are 0.1% for makers and 0.1% for takers. Phemex offers trading fee discounts for VIP users i.e. those with high trading volume on their Exchange. Users can also enjoy trading fee discounts by staking Phemex’s native $PT token in return for $vePT, enough $vePT tokens.
There is no addition transaction fee for the exchange, so users can trade even small quantities without fear of having overwhelming fees. Taker fees are higher as the exchange promotes users to fill the order books and establish higher liquidity for the exchange.
Funding fee is feature that is extremely important to take into consideration on Phemex. Funding rate is paid directly to holders of either long or short positions depending if its “negative funding” or “positive funding” rate. On Phemex, the fee is charged every 8 hours and can be negative or positive – meaning it’s possible to gain or lose money every 8 hours. If funding rate is negative, shorts holders will pay longs a percentage of their position. In the example above, the funding rate is -0.0094%, so short holders will be charged 0.0094% of their entire position. This also means that long holders will gain interest on their position.
Click HERE to learn more about crypto funding rates and how to earn passive income from them.
Deposit/Wtihdrawal fees
Phemex does not charge a deposit fee, but there are minimum deposit requirements. As for withdrawals, there is also a minimum withdrawal limit and the fee charged depends on the cryptocurrency. For example, Phemex charges 0.0005 BTC for BTC withdrawals, and 1 USDT for USDT withdrawals.
Phemex has a utility token known as Phemex Token ($PT). $PT gives holders various benefits including staking yields, trading fee discounts, VIP privileges, cashback airdrops, DAO governance, as well as launchpad and launchpool access. Phemex Token cab be purchased on the Exchange, and it can be staked to obtain Vote Escrow PT ($vePT). $vePT grants exclusive voting rights in the PhemexDAO, staking yields and buy crypto airdrops privilege.
Payment methods
Phemex only accepts the following cryptocurrency deposits onto the Exchange: Bitcoin, Ethereum, ChainLink, Tether and Ripple. Due to the Exchange not having any KYC procedures in place, traditional payment methods such as credit or debit cards and PayPal are not accepted.
Sub-accounts feature
Phemex offers an easy method to create sub-accounts – each with their own individual account balances and permissions. This feature allows traders to isolate their different trading strategies from each other – as it is possible to set a limited balance to each sub-account. Balance can be transferred freely between the accounts via the sub-account system. Traders can create new accounts for each new strategy they want to test out. In addition, sub-accounts can be used for trading bots – so automated trading can be done within controlled limits.
Is Phemex Exchange Safe?
Phemex has never been the subject of a significant hack. They also have the following practices to keep user funds safe:
Cold wallets: Phemex assigns separate cold wallet deposit addresses to each user and keeps 100% of user funds in reserve. It also uses offline signature and Merkle-tree Proof-of-Reserves so users can see where their funds are in Phemex’s system.
Risk controls: Phemex uses a two-factor authentication mechanism, an anti-phishing code, and a double-entry bookkeeping system to protect user accounts from tampering and malicious actions.
Firewall and network management: Phemex deploys its system on the AWS Cloud and uses several firewalls to separate different zones and machines for different trading purposes. It also applies restrictions on system and instance accessibility.
Trading platform:Phemex uses C++ engines that are fast, reliable, and customized to provide high performance and seamless disaster recovery for 24×7 trading.
Phemex Team
The core of Phemex team is comprised of ex-Morgan Stanley executives and developers. CEO Jack Tao has worked at Morgan Stanley for 11 years with experience developing Equity trading algorithms in the US. This work is pivotal to Phemex’s long term growth strategy and mission to bring professional trading tools to the cryptocurrency space.
Conclusion: Phemex Exchange Pros and Cons
Pros
Developed by ex-Morgan Stanley Executives
Industry trend-setting Zero Fee Trading
Sub Accounts and easy to use APIs
Top tier exchange and wallet security
No KYC for small withdraws
Cons
Relatively new.
Regional restrictions without providing alternatives for users from those jurisdictions.
Phemex is currently looking for regulation via the Monetary Authority of Singapore (MAS) and SEBA for custody of customer assets. Similar to other derivatives exchanges such as BitMEX, PheMEX is currently not regulated.
Is Phemex allowed in the US?
Phemex does not offer services to the following countries: US, UK, Canada, Cuba, Crimea, Sevastopol, Iraq, Yemen, Iran, Syria, North Korea, South Korea, Sudan, China, Hong Kong, Republic of Seychelles, and Bermuda
Does Phemex have a token?
Phemex has a token known as Phemex Token or $PT. It is a utility token that provides benefits such as staking yields, fee discounts, and Phemex DAO governance.
What is the difference between PT and vePT
PT is Phemex Token, the native token of Phemex Exchange. Users stake PT in order to get vePT (vote escrow PT).
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
ZigZag Exchange will do a total of 7 airdrops totaling around 35 million $ZZ (35% of total supply). They recently finished their first airdrop round for market makers. This means that everyday users of the protocol are up next! The second airdrop criteria have been announced! So we compiled the latest guide to help you position for the $ZZ airdrop.
Here’s how users were eligible for the second round of ZigZag Exchange ($ZZ) token airdrops. There is speculation that the third round of airdrops may have similar eligibility:
ZigZag Exchange is a decentralized order book exchange powered by zkSync and Arbitrum. It provides users with a familiar trading experience similar to that of a centralized exchange (CEX), except they have full control of their funds. Users can trade directly from their wallets on ZigZag with low fees. This is possible because the platform’s market makers extract price feeds from centralized exchanges (CEXs) and relay them to the order books on ZigZag. As a result, the price quotas on ZigZag are the same as CEXs, allowing users to trade at competitive prices.
Who is the Team behind ZigZag Exchange?
An open community of coders, designers, mathematicians, cryptograph experts, high-frequency traders, researchers, market makers and other contributors, developed ZigZag Exchange. Their code is public on GitHub, and smart contracts are regularly audited by the community.
Does ZigZag Exchange have a Token?
ZigZag Exchange has its $ZZ token. $ZZ can be purchased on their own platform and Uniswap. The total supply of $ZZ tokens is 100 million, of which 60.7% will be allocated to the community. This community allocation is further divided into three categories: ecosystem (DAO, marketing, incentives, liquidity), community contributors, and airdrops.
The ZigZag token is a governance token and will also share the revenue from fees that are generated on the ZK-Rollups.
How to be Eligible for Round 2 $ZZ Airdrop?
Round 2 of the ZigZag $ZZ token airdrop has just been completed! It was a record breaking airdrop with over 100,000 users receiving an airdrop of 34% of the total $ZZ token supply. There were seven subcategories of users who were eligible for the $ZZ token airdrop:
Trader airdrop ✅ (open)
Market maker bots airdrop ❌ (closed)
IDO participant airdrop ❌ (closed)
Atlendis liquidity provider airdrop ✅ (open)
Discord member airdrop ✅ (open)
Gitcoin donator airdrop ✅ (open)
POAP holder ✅ (open)
The following categories were eligible for airdrops in season 2: Traders, Atlendis liquidity providers, Discord members, Gitcoin donors, and POAP holders. Follow these steps to be eligible for the upcoming $ZZ airdrop:
Trade on ZigZag Exchange for Trader Airdrops
Although ZigZag stated that trades between 5th November 2021 and 31st December 2022 are the base criteria, there is no list with eligible addresses yet. So it is worth a shot to make frequent trades now on the platform if you haven’t yet. Go to trade.zigzag.exchange and connect your MetaMask or Argent Wallet. If you don’t have funds, you can use their bridge to transfer assets.
A total of 92,000 addresses qualified for this airdrop. There are 3 categories of those who will receive trader airdrops based on a snapshot taken on 31st December 2022: Base Criteria, November 2021 traders, and December 2021 traders. Those who (1) had 1-month activity (first and last swap 30 or more days apart); and (2) 4 unique days with swaps qualify for Base Criteria and would receive 300 $ZZ. Those who reached Base Criteria and made their first swap before December 2021 qualify as a November 2021 trader and will get a 300 $ZZ early adoptor bonus. Users that reached Base Criteria and made their first swap before 1 January 2022 qualify as a December 2021 trader and will receive a 100 $ZZ bonus. In short, the eligibility criteria for ZigZag Exchange Trader Airdrop are:
300 $ZZ for only reaching Base Criteria.
400 $ZZ total for December 2021 trader.
600 $ZZ total for November 2021 trader.
Obtain Discord Roles for Discord member airdrop
ZigZag will airdrop $ZZ to three Discord roles: (1) Member, (2) Senior Member, and (3) OG. As they are still working out the details, there is still time to get to “Member” at least. You will need to actively engage with the community, help other users, give feedback to the team, find bugs on GitHub, create content or write Twitter/Medium posts.
253 addresses qualified for the Discord member airdrop. The amount of $ZZ airdrops depends on your Discord member role. 1,000 $ZZ to Og, 750 $ZZ to Senior, 500 $ZZ to Member.
Donate on Gitcoin for Gitcoin Donor Airdrop
Go to their Gitcoin and donate to their grant’s address 0x9B67d3067fA606BE28E56C1aB184725c07b7B221 on zkSync, Polygon, and Ethereum.
7,600 addresses qualified for ZigZag’s Gitcoin Donor airdrop. Gitcoin donors will receive 2 $ZZ for every USD donated (minimum US$3 donation).
Atlendis liquidity provider airdrop
2,100 addresses qualified for the Atlendis liquidity provider airdrop. Atlendis liquidity provider will receive 500 $ZZ per depositor (minimum US$5).
POAP holder airdrop
In February 2022 ZigZag launched a Lantern Festival Trivia event for its Chinese users. POAP holders will receive 300 $ZZ per POAP.
How do I claim my ZigZag Exchange ($ZZ) airdrop?
The airdrops have been distributed. $ZZ tokens will automatically be airdropped on zkSync Lite. You can check how many $ZZ tokens were airdropped to you by viewing your zkSync wallet at https://zkscan.io/. Check frequently as the tokens were airdropped by the team over multiple rounds. (Tramadol online)
ZigZag Exchange will definitely do a third round of airdrops. This is because they have confirmed in their Documentation they will do a total of 7 airdrops. Whilst ZigZag has not announced details of when they will do their third $ZZ airdrop yet, we it will be after the second round of airdrops in March 2023.
ZigZag has just announced their Zap bridge supports zkSync Era. Go onto ZigZag Bridge, bridge assets to and from zkSync Era to position yourself for a potential ZigZag (and zkSync) airdrop!
When reviewing an airdrop, there are several factors to consider. First, the likelihood the project will even do an airdrop in the first place. Then, to look at how many tokens the project intends to allocate towards airdrop campaigns, as well as the difficulty in participating in their airdrop. It is also important to look at the utility of the token so that there will be an actual use and purpose in participating in the airdrop in the first place. Finally, a factor to consider when reviewing an airdrop is whether the airdropped tokens are subject to any lockup period.
Likelihood of Airdrop: ZigZag Exchange confirmed they will do a total of 7 airdrops.
Airdropped Token Allocation: Around 35 million $ZZ will be distributed over 7 airdrops (35% of its total token supply)
Airdrop Difficulty: For the second round of airdrops, there were 7 eligibility criteria. For example, trading on their platform, donating on their Gitcoin or obtaining a Discord “Member” role. This makes the ZigZag airdrop relatively easy.
Token Utility: $ZZ is a governance token built on the ERC-20 standard that enables token holders to participate in the decision-making process for ZigZag Exchange’s multi-chain ecosystem. The ZigZag token will also share the revenue from fees that are generated on the ZK-Rollups.
Token Lockup: $ZZ tokens will be directly distributed in the airdrops without any vesting.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
Ethereum 2.0 (Formerly known as ETH2) is a series of upgrades to the Ethereum Blockchain which will improve its speed, efficiency, and scalability. This will allow Ethereum to handle significantly more transactions, improve smart contract stability and reduce network fees. Upon reaching the final phase of the upgrade, Ethereum will meet its goals of becoming a transparent and open network for Decentralized Finance (DeFi). This article breaks down the roadmap for this upgrade and key milestones of when they are released. The next big update coming in the second half of 2023 is the “Shanghai upgrade” which will have a significant economic impact.
What is Ethereum 2.0?
Ethereum 2.0 will involve sharding to drastically increase network bandwidth and reduce gas costs, making it cheaper to send cryptocurrencies and interact with smart contracts. There will be fundamental economic changes too, Ethereum 2.0 will allow support to stake nodes and to earn Ethereum as passive income. The Ethereum 2.0 upgrade will be done in 3 distinct phases starting with Phase 0 (after all, developers count from 0 instead of 1). Over the past few years, opponents of Ethereum have often criticized the network’s high transaction costs and fragility during peak usage. This guide will cover the timeline for the upgrade to ETH2.0 and the solutions proposed.
Ethereum 2.0 Key features and what you need to know video
Key Features of Ethereum 2.0
Efficiency – Ethereum will become 99.95% more energy efficient. It is estimated that after the upgrade, the network will no longer require an entire country’s worth of power.
Sharding – Ethereum will be broken into 18 “Shards” that operate simultaneously. This will drastically improve efficiency.
Staking – Ethereum will move to Proof-of-Stake Consensus, so everyone can stake and help secure the network.
Security – Compromising the network will become much more expensive under Proof-of-Stake. 51% of attackers will also be easily identifiable with validator addresses and can be forked away from the network.
The 3 Phases of Ethereum 2.0
Ethereum 2.0 will be launched in 3 phases:
Phase 0- Beacon Chain – Completed in 2020
Phase 1- The Merge – Completed September 2022
Phase 2- Sharding
Phase 0: Beacon Chain
Launched on 1st December 2020, the Beacon Chain introduced Proof-of-Stake to the Ethereum ecosystem. The purpose of the Beacon Chain is to coordinate the Ethereum network and serve as the consensus layer. This Beacon chain is necessary to generate the randomness that actual proof of stake uses. It also acts as a crucial precursor to upcoming phases such as sharding.
The Ethereum Merge was completed on the 15th of September 2022. This merged the Beacon chain from phase 0 into the original proof-of-work mainnet (i.e. the “execution layer”, formerly known as “Eth1”). After the Merge is completed, ETH1 and ETH2 become the same network that uses the same ETH coin. Why the merge is so important and such a difficult task because it involved switching consensus mechanisms. An analogy for this would be switching the engine of a car from a gas to an electric-powered engine – whilst the car is still moving.
The Merge made the Ethereum network substantially more energy efficient as it no longer required cryptocurrency miners that consumed a huge amount of electrical power. It is calculated that there is an incredible 99.988% reduction in the energy necessary to run the network, meaning that current Ethereum Staking Nodes are incredibly energy efficient. It will also set the stage for future upgrades to the scalability of Ethereum such as sharding.
Phase 2: Sharding
By then, the Beacon Chain has already been launched and merged with the Ethereum Mainnet. The next stage will introduce sharding to the Ethereum Network.
Sharding on Ethereum means the database would be split horizontally to spread the load. Sharding will work together with layer 2 rollups. This divides the burden of handling large amounts of data needed by rollups over the entire Ethereum network.
Ethereum Sharding is realistically expected to be released in 2024.
Main features of sharding:
Everyone can run a node: Validators will no longer need to store all the data themselves. This drastically reduces the cost of storing data on layer 1 by reducing the hardware requirements.
More network participation and security: With sharding, you will be able to run Ethereum on a laptop or phone. This means more participation, greater decentralization, and more security.
What are layer 2 rollups?
Layer 2 rollups are an existing “layer 2” technology. This allows decentralized applications (dApps) to “roll up” transactions into one off-chain for submission. The effect of this is that it reduces the data needed to execute a transaction.
The combination of layer 2 rollups and sharding is what will achieve a transaction speed of 100,000 tps.
3 upgrades have been introduced since the launch of the Beacon Chain on 1st December 2020: the Berlin upgrade, London upgrade, Altair upgrade and Shanghai upgrade.
The Berlin upgrade was launched on 15th April 2021 and optimized gas costs for some EVM actions and increased support for several transaction types. The London upgrade was launched on 5th August 2021 and reformed the transaction fee market for the ETH 1.0 chain via EIP-1559 and removed or reduced gas fees for specific functions (Learn more about the London upgrade). The Altair upgrade was launched on 27th October 2021 and is the first scheduled upgrade for Ethereum’s Beacon Chain. It added support for “sync committees” which enabled light clients, brought validator inactivity, and slashed penalties up to their maximum values.
The Ethereum network’s Shanghai upgrade (also known as Shapella) was successfully completed at 22:27 UTC on 12th April 2023. To celebrate this milestone, ConsenSys launched an NFT collection called “Ethereum, Evolved: Shanghai”. The NFT claim period begins on April 12, 2023, at 9pm EST and lasts for 72 hours. Find out how to claim this FREE NFT with our guide here.
The next major Ethereum upgrade is titled Cancun, which will feature proto-dank sharding,a feature that aims to improve scalability by improving fees and transaction times. The details of the Cancun upgrade have not yet been finalized.
Shanghai (Shapella) upgrade
The Ethereum network’s Shanghai (also known as Shapella) upgrade took effect at 22:27 UTC on 12th April 2023 and was very successful. This upgrade combined changes to the execution layer (i.e. Shanghai), consensus layer (i.e. Capella), and engine API at epoch 194,048. The Shapella upgrade is important because it finally enabled withdrawals of ETH stakers/validators from the Beacon Chain, ahead of the implementation of the Ethereum Improvement Proposal (EIP)-4884 related to The Surge. This will improve the security of Ethereum’s post-Merge proof-of-stake protocol.
Additionally, a set of EIPs that upgrade the Ethereum Virtual Machine (EVM) will be included in the Shanghai upgrade, such as EIP-3651: Warm Coinbase, EIP-3855: PUSH0 instruction, EIP-3860: Limit and meter initcode and EIP-4895: Beacon chain push withdrawals as operations. The EVM Object Format (EOF) may be removed from the Shanghai upgrade if it is not ready by the time of implementation. Once the Shanghai upgrade is complete, the network’s next major event is the Sharding upgrade, which is expected to take place between 2023 and 2024.
How much ETH has been withdrawn since the Shanghai (Shapella) upgrade?
Since the Shanghai (Shapella) upgrade 228.82K $ETH has been withdrawn with 100.51K $ETH deposited (as of 10:00am HKT on 14th April 2023). At the same time, the current amount of $ETH being staked is 17.38M ($34.97B). And the pending withdrawal amount (including rewards) is 981K ($2.07B). Around 60.99K ($126.89M), is expected to be withdrawn in the next 11 hours.
You can see how much ETH has been withdrawn, deposited or staked since the Shanghai (Shapella) upgrade here.
Ethereum ETH prices since the Shanghai (Shapella) upgrade?
The Ethereum Shanghai (Shapella) upgrade took effect at 22:27 UTC on 12th April 2023 (06:27 on 13th April 2023 HKT). Before the upgrade, ETH was only trading at around $1,920 and remained the same a few hours after. However, the full effect of the Shanghai upgrade on Ethereum prices was seen around half a day and particularly 24 hours after the Shanghai upgrade. As of 11:30am HKT on 14th April 2023 (nearly 1.5 days after the Shanghai upgrade), Ethereum is trading at $2,109.87.
How to set up an Ethereum Validator Node
Check out our LIVE demonstration on how to set up an Ethereum 2.0 Node
How to set up an Ethereum 2.0 node
I’ve also set up something called an Ethereum validator node for Ethereum 2.0. These nodes will be how Ethereum would run and how transactions are going to be validated in the future. So we’re going to explore all of these concepts as well in this guide.
Currently you can test out Ethereum staking on the ETH 2.0 Testnet set up by Prysmatic labs (aka Topaz). Since it’s a test, Ethereum will not be used, instead, it will use Göerli ETH, a free testnet version of ETH.
Time needed: 2 days
How to set up an Ethereum (ETH) Validator Node This guide has been adapted from the Prysm ‘Topaz’ Testnet Guide
Get some Göerli ETH
Göerli ETH is free to obtain and will be used to stake the 32 ETH required for the node. The easiest way to obtain the Göerli ETH is to use the social faucet.
Spin up a Server
You’ll need to be familiar with running a VPS server (you can use AWS, Hetzner or Linode). Recommended specs include an Intel Core i7 processor with 100 GB of SSD storage
Start your Beacon Node
Easiest way we found to do this is via Docker docker run -it -v $HOME/prysm/beacon:/data -p 4000:4000 -p 13000:13000 \ gcr.io/prysmaticlabs/prysm/beacon-chain:latest \ –datadir=/data
Wait (roughly 2 days) to get activated, and then you’re good to go!
Staking Ethereum on a validator node
Ethereum 2.0 migrated the network consensus to a proof of stake mechanism. The staked 32 ETH2 is used to validate the transactions and states on the network. It also acts as a guarantee that the validator node will be honest and operational. In return, stakers will be rewarded with Ethereum.
This means that validators will generate Ethereum as passive income and receive ETH payouts slowly over time. Current calculations of Ethereum 2.0 staking show an annual 14.2% Return on Investment (ROI).
This will be great for those who stake ETH. This is because they can enjoy the benefits of passive income whilst personally holding their funds on the validator node. Analysts predict greater demand for ETH once proof of stake is implemented. This is due to additional demand for ETH from staking and validator nodes. Whilst at the same time, reduced demand for GPUs as Ethereum mining will eventually be phased out.
You can see the status of our Ethereum validator node in the image above. We had some initial downtime for the node, so we actually lost 0.01333 Ether. This was a penalty for missing our votes. So it is important to remember that votes are mandatory once a node is activated. An offline node will mean that votes are missed, resulting in a penalty of loss of ETH.
On 4th Nov 2020 the required specifications of ETH2 v1 and the Mainnet Deposit Contract Address for staking were released. This allowed ETH2 users to stake their ETH and become validators to help secure the network.
It’s important to remember that it is not possible to simply send ETH to the contract. This will result in your transaction failing. You need to go through the launchpad and follow the guide. Moreover, as we stated previously, staking and running a validator requires effort, time and technical expertise. Failing to meet requirements can result in loss of part of, if not all, your ETH as penalties add up.
Ethereum Staking Update: Yields?
As of April 2023, I have earned around 4.373 ETH since setting it up 3 years ago. Note that results may vary. Those who set up their node earlier (as was in my case) were able to enjoy 16% APY. The current APR yield for staking ETH is around 5.16%. You can check the current APR, total ETH staked, and number of validators here.
Ethereum staking since the Shanghai Upgrade
The APR yield for staking ETH since the Shanghai Upgrade is still very good at around 5.16%. So I am planning to continue staking ETH so I don’t miss out on this opportunity to earn more yield.
My logic right now
* unstake ETH node
* move from paper to hardware wallet
* buy more ETH
* stake more #Ethereum is going to some crazy places, definitely don’t want to miss out
More than 17.3 million $ETH is currently staked. Since the Shanghai Upgrade on 12th April 2023, over 107K $ETH has been deposited in the contract address. There are currently 568,291 validators and a Participation Rate of over 99%. The Participation Rate is a measure of ETH2’s network health as it shows the number of validators actively participating in the consensus mechanism. A good rate would be always above 80-90% to ensure the security of the chain.
Unlike before, Ethereum 2 proceeds in epochs (32 blocks), every 6.4 minutes (if no abnormalities are detected). You can always check this metric here: beaconscan.com/epochs.
What’s next in the development of Ethereum 2.0?
Phase 0 – Beacon Chain is already completed, and development would move onto building Phase 1- The Merge and Phase 2-Shard Chains.
Ethereum 2.0 setup and architecture
Currently, we are in Phase 1 of the roadmap the road towards Ethereum 2.0. The Ethereum network is now around 55% complete following the Merge of the Beacon Chain with the Ethereum mainnet in September 2022.
After the Merge, Ethereum will have further upgrades which Vitalik calls the “surge”, “scourge”, “verge”,”purge” and “splurge”. This refers to Ethereum’s scaling, cleanup and evolution.
What is the “surge”, “scourge”, “verge” “purge” and “splurge” in the development of Ethereum 2.0?
After the Merge, Ethereum will undergo further upgrades known as the “surge”, “scourge”, “verge” “purge” and “splurge”.
The “surge” in the development of Ethereum 2.0 refers to adding Ethereum sharding. The purpose of this is to enable more affordable layer-2 blockchains, reduce the cost of rollups, and make it easier for users to operate nodes to secure the network. Once the surge is completed, the Ethereum network is expected to be able to process transactions faster. Ethereum could process up to 100,000 transactions a second once sharding is completed. This is much faster than traditional payment systems such as Visa which can handle around 1,667 transactions per second.
The “scourge” is a new phase announced by Vitalik on 5th November 2022. The purpose of this stage is to ensure reliable and credibly neutral transaction inclusion. Also, to avoid centralization and other protocol risks from MEV.
The “verge” will introduce “stateless clients” and “Verkle trees”- which are a form of mathematical proof. This enables users to become network validators without storing lots of data on their machines. This is a further step in the move toward a Proof-of-Stake consensus model as any validator with staked ETH can confirm and verify transactions. This will be hugely beneficial for decentralization.
The next stage, the “purge” will involve cleaning up old network history. This is to reduce the amount of space required on your hard drive and remove the requirement of nodes to store historical information.
The “splurge” would be several smaller upgrades and fine-tuning in order to ensure that the network operates smoothly. Or as Vitalik calls it, “all the other fun stuff”.
Currently, the Ethereum network can only process around 12 to 25 tps with an average confirmation time of 6 minutes. The result is that the Ethereum network is heavily congested with people all vying to process transactions, resulting in high gas fees.
Many “Ethereum killers” have therefore been launched. These are alternatives people can use for processing transactions. Some Ethereum alternatives include Solana, Avalanche, Polkadot, Algorand, and Cardano. They are a direct competitor to Ethereum as they offer similar features but at lower cost and higher speed.
Eventually, the number of transactions per second will drastically increase to over 100,000 tps. So the question would be, what would happen to the competition i.e. the “Ethereum killers”? Find out more in our article: Ethereum Merge is coming, is this the end of Ethereum killers?
Frequently Asked Questions (FAQ)
Will Ethereum 2.0 replace Ethereum?
Ethereum 2.0 will not replace Ethereum. Rather, Ethereum and Ethereum 2.0 will be merged together into 2 layers of the same blockchain. Ethereum as we know it will be the execution layer, whilst Ethereum 2.0 will be the consensus layer.
Will there be any difference in using the ETH as I am used to?
No, ETH1 will continue as it is with no differences. ETH2 is setting up on a parallel line and the two will merge in the future. The merge will happen without ETH users being able to notice it
When will Ethereum mining end?
Ethereum mining will not end for quite a few years. Ethereum will retain mining on the main chain until at least 2020. The main ETH1 chain will continue to use mining and run parallel to the ETH2.0 chain. This is to ensure stability during the migration
Should I stake my ETH for ETH2?
It does not cost any money to set up a validator node to stake ETH for ETH2. Staking ETH will allow you to generate passive income. However, you will need to stake at least 32 ETH, and if your node suffers downtime your ETH will be partially deducted as penalties. Also, your staked ETH cannot be unstaked until after the Ethereum Shanghai Upgrade.
What are the minimum hardware requirements to become an ETH validator?
Following this list on Prysm website to install the client:
Minimum specifications
Operating System: 64-bit Linux, Mac OS X 10.14+, Windows 64-bit Processor: Intel Core i5–760 or AMD FX-8100 or better Memory: 8GB RAM Storage: 20GB available space SSD Internet: Broadband connection
Recommended specifications
Processor: Intel Core i7–4770 or AMD FX-8310 or better Memory: 16GB RAM Storage: 100GB available space SSD Internet: Broadband connection
Can I lose my ETH Deposit in the Node?
Yes. The 32 ETH staked for the validator node is designed as an insurance that the validator node is operational and online at all times. Penalties will be given if the node is offline, and small amounts of ETH will be deducted over time.
What is the expected APR yield for staking ETH?
The current APR yield for staking ETH is 3.7%. Here you can have an idea of the APR (in ETH) as it varies with the number of ETH staked (source).
Is staking ETH for ETH2 safe or risky?
Staking ETH for ETH2 is safe and does not have any significant risks. However, stakers will not be able to withdraw their staked ETH until after the Shanghai hard fork in March 2023. Also, if your validator node goes offline, you will be penalised by a deduction of your staked ETH.
Are there projects that will allow me to stake even if I have less than 32 ETH?
If you want to participate in ETH2 staking but you don’t own the minimum amount required to become a validator, or you don’t want to stake an exact multiple of 32 ETH, don’t worry. There will be possibilities through Centralized Exchanges (like Binance and Coinbase) and not only. A big advantage in this case, is to receive liquidity for your staked ETH. RoocketPool ($RPL), now in beta, will correspond rETH (1:1 with ETH), a tokenized asset that you will be able to trade freely. Lido Finance will do a similar thing through their stETH. LiquidStake will instead let you borrow USDC for your staked ETH collateral. Many other solutions will arise as ETH2 will start its journey; for example, Cream Finance ($CREAM) has recently released an article explaining that user will receive the ETH2P token when joining ETH2 staking through them
Can you withdraw ETH2 back to regular ETH?
In Phase 0, ETH2 cannot be withdrawn back to regular ETH. Once converted, ETH2 will only be usable on the Staking Chain until Phase 3.
What can I do with my ETH2?
At the moment you cannot do anything with your ETH2. They are just “digital receipts”. Transactions or other features we have now on ETH won’t be available on ETH2 for probably years. There are rumors of a possible secondary market where to trade them though.
When can I buy and sell ETH2?
You cannot buy or sell ETH2 yet. ETH2 will only be available for trading or transfer until Phase 3 when the upgrade of the Ethereum protocol is complete.
Should I buy ETH2 or ETH?
ETH2 is not available for sale yet, so users should be careful of any places that offer ETH2 for sale. ETH on the other hand can be bought and traded at almost every cryptocurrency exchange.
Is testnet ETH worth the same as ETH?
ETH on testnets do not have any monetary value. They essentially allow developers to test and troubleshoot DApps and protocols before going live on the Ethereum mainnet. As a result, there are no markets for testnet ETHs.
Will Ethereum gas fees be cheaper after The Merge?
The Merge will not make Ethereum gas fees cheaper. This is because The Merge is only a change in the consensus mechanism from Proof-of-Work to Proof-of-Stake. Only an expansion of the Ethereum network capacity and throughput would lower the gas fees. However, this is still in development.
Will I be able to withdraw my staked ETH after The Merge?
There is currently locked staked ETH (stETH) on the Beacon Chain. stETH is backed 1:1 by Ether (ETH). However, developers have confirmed that users will not be able to withdraw their locked stETH after The Merge. Withdrawal of stETH will instead be possible after the Shanghai Upgrade which is expected to be in second half of 2023.
Will Ethereum transactions be faster after The Merge?
Ethereum developers believe that transitioning to Proof-of-Stake will result in a 10% increase in block production. However, users are unlikely to be able to notice this slight improvement.
Will Ethereum ETH 2.0 be a new coin?
No. There will not be a new ETH coin after the launch of Ethereum 2.0. Therefore, existing ETH holders, users of dApps, and traders do not have to do anything in anticipation of Ethereum 2.0. Therefore, users should be wary of websites or services claiming that they will allow users to trade, invest, mine, swap, or stake the ETH2 token. This is because the ETH2 token doesn’t actually exist.
Will there be any tax implications resulting from The Merge?
If The Merge does not result in a hard fork, then there are no tax implications because no new tokens would be created.
However, if the Merge results in a hard fork, ETH holders would be sent duplicate tokens which may have tax implications. If the ETH is held in user-owned wallets, new proof-of-work ETH tokens would be considered as income, and its valuation calculated at the time the user comes into possession of the tokens. On the other hand, if the ETH is held in custodial wallets such as cryptocurrency exchanges, the implications would depend on the custodians’ stance on supporting the forked ETH chain.
Will dApps or exchanges be affected by Ethereum 2.0?
The launch of Ethereum 2.0 will not cause a huge impact on users’ interactions with blockchain dApps or cryptocurrency exchanges and services.
Will exchanges be shut down during the ETH Merge?
Ethereum developers have confirmed that during the Merge, there would not be any downtime.
When was the Ethereum Merge?
On 15th September 2022 at 06:42:42 UTC at block 15537393, the Ethereum Merge was completed.
Will ETH holders be airdropped new tokens after Ethereum 2.0?
There are currently no plans for an airdrop of new tokens for ETH holders after the launch of Ethereum 2.0. So far, Vitalik Buterin and the Ethereum Foundation have expressed that they are firmly against any forked ETH tokens.
Therefore, any websites or social media accounts purporting to airdrop Ethereum tokens are most likely a scam.
What is the ETHPOW or ETHW token?
ETHPOW or ETHW is the token that will emerge if there is a fork of the Ethereum blockchain. During the Merge, some community members may disagree (e.g. want to stay with the Proof of Work mechanism) and fork ETH. What they may do, is “copy and paste” the Ethereum blockchain. The result of this is there would be 2 blockchains and 2 tokens. There would be the existing Ethereum blockchain that goes through the Merge with the ETH token. And then there would be the forked chain with a new token called ETHPOW or ETHW.
How can I get the airdropped free ETHPOW/ETHW token?
If you held Ethereum prior to the Ethereum Merge, you will be airdropped (via the fork) free ETHPOW tokens
When can I stop staking my ETH?
Those who have staked their ETH cannot stop staking until the Shanghai hard fork, which is expected in the second half of 2023.
Where can I buy or trade the EthereumPoW ($ETHW) token?
The EthereumPoW ($ETHW) token is not widely traded on cryptocurrency exchanges. However, you can buy or trade the EthereumPoW ($ETHW) on these exchanges: OKX, ByBit, Kraken, Huobi, MEXC Global, Gate.io, Bitfinex, Bittrex, Poloniex and Hotbit.
What is the next upgrade to the Ethereum network
The next upgrade to the Ethereum network is known as the Shanghai upgrade. A major anticipated feature of this upgrade is that withdrawals of ETH stakers/validators from the Beacon Chain will be enabled. The Ethereum network Shanghai upgrade is expected to be in March 2023.
Will there be an Ethereum hard fork after the Merge?
A hard fork is a backward-compatible and permanent split or fork of the blockchain. After a hard fork, a separate version of the blockchain will emerge, as well as a new cryptocurrency token. There is speculation that the Merge may result in a hard fork. This is because some want to take advantage and profit from the Merge. Alternatively, a hard fork may be formed by those who disagree with the direction of Ethereum’s development. A group known as ETHW Core announced they will launch a hard fork within 24 hours of the Merge. This is because they oppose the change to a proof-of-stake mechanism, which essentially puts an end to ETH mining. Several hours after the Merge, the ETHW mainnet and fork of the Ethereum blockchain was launched.
Tax implications resulting from The Merge or Ethereum hard fork?
If The Merge does not result in a hard fork, then there are no tax implications because no new tokens would be created.
How has Ethereum 2.0 impacted its price
If all the phases are completed successfully, Ethereum prices are expected to increase. This is because each phase of the upgrade gives significant upgrades that will improve the performance of the blockchain. This will further grow its utility and value.
What will happen to Ethereum mining?
Ethereum mining is the process of adding blocks of transactions to the Ethereum blockchain. This is to help secure the Ethereum network through a Proof-of-Work (PoW) mechanism. Miners are then rewarded with ether (ETH) which can be traded on cryptocurrency exchanges. Therefore, many people would run Ethereum miners for profit. However, the launch of ETH2.0 will fundamentally change the current economics. The existing Proof-of-Work (PoW) consensus mechanism will be replaced by Proof-of-Stake (PoS). The concept of mining will be retired once the Ethereum 2.0 update is fully completed. For more details check out our article: The end for Ethereum miners after ETH 2.0?
What is the status of the Ethereum Shanghai upgrade?
The Shanghai (Shapella) network upgrade took place at 22:27 UTC on 12th April 2023.
Will Ethereum 2.0 replace Ethereum?
No, but how transactions will be confirmed will change. Previously Ethereum uses Proof of Work (PoW) to confirm transactions. However, Ethereum 2.0 will transition to a Proof of Stake (PoS) consensus mechanism.
What is the Shapella upgrade?
The Shapella upgrade is another name for the Ethereum Shanghai upgrade. It is called the Shapella upgrade because it combines changes from the Shanghai (execution layer) and Capella (consensus layer). This upgrade took place at 22:27 UTC on 12th April 2023.
How much ETH has been withdrawn since the Shanghai (Shapella) upgrade?
Since the Shanghai (Shapella) upgrade, 228.82K $ETH has been withdrawn (as of 10:00am HKT on 14th April 2023). The pending withdrawal amount (including rewards) is 981K ($2.07B). Around 60.99K ($126.89M), is expected to be withdrawn in the next 11 hours.
Where can I see how much ETH has been withdrawn or staked since the Shanghai (Shapella) upgrade?
You can see how much ETH has been withdrawn, deposited or staked since the Shanghai (Shapella) upgrade here.
Ethereum ETH prices since the Shanghai (Shapella) upgrade?
Ethereum ETH prices eventually received a positive boost hours after the Shanghai (Shapella) upgrade. Before the upgrade, ETH was only trading at around $1,920. Nearly 1.5 days after the Shanghai upgrade, Ethereum is trading at $2,109.87.
What is the current APR for staking Ethereum?
The current APR yield for staking Ethereum is around 5.16%
Updates:
Update Nov 2022: Ethereum 2.0 has recently gone through some changes – it is now called the Ethereum Merge. Update Jan 2023: Added details about Ethereum Shanghai Upgrade Update Apr 2023: Added details about Ethereum Shanghai Upgrade and its effect on ETH prices.
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Ethereum Shanghai Upgrade is scheduled for April 12th and includes key economical changes to Ethereum and fee optimizations that will improve the network. This upgrade is part of Ethereum’s upgrade plan into Ethereum 2.0 – a faster, cheaper and more stable public blockchain. The main purpose of the Shanghai Upgrade is financial – it will allow stakers and validators to withdraw staked ETH from the Beacon Chain, which has been locked since December 2020. Some users have feared that this change will unlock $26 billion USD worth of Ethereum, potentially causing Ethereum’s prices to fall.
Staked Ethereum is Unlocking
The key feature of the Shanghai Upgrade is Ethereum Improvement Proposal (EIP) 4895, which will enable validators to withdraw staked ETH. Validators have staked approximately 16 million ETH to secure the network. Validators can participate in validating blocks by staking 32 ETH in the chain, and each staked ETH increases the likelihood of a validator receiving block rewards.
Validators have been staking ETH and earning rewards for validating blocks since the launch of Ethereum’s Beacon Chain in December 2020. However, the rewards earned by validators have been locked since the transition to PoS consensus in September 2022. With the Shanghai Upgrade, validators will finally be able to withdraw their rewards.
The withdrawal of staked ETH has been successfully simulated on the Zhejiang testnet. The Zhejiang testnet is the first of three testnets that will run the simulation. The Sepolia and Goerli testnets will follow, running the simulation in the coming weeks.
Key Improvements (EIP) in the Shanghai Upgrade:
EIP-3651: Warm COINBASE – This EIP aims to lower the gas cost of accessing the COINBASE address, which is a software component that allows developers to receive new tokens.
EIP-3855: PUSH0 instruction – This EIP aims to lower the gas cost of deploying contracts by introducing a new PUSH0 instruction.
EIP-3860: Limit and meter initcode – This EIP introduces a gas cost limit and meter for contract initialization code, which should help to reduce gas costs for developers.
EIP-4895: Beacon Chain push withdrawals as operations – This EIP is one of the key features of the Shanghai upgrade, as it allows validators to withdraw staked ETH from the Beacon Chain.
EIP-6049: Deprecate SELFDESTRUCT – This EIP aims to reduce the risk of contract failure by deprecating the SELFDESTRUCT instruction, which can lead to the loss of funds if used improperly.
These EIPs will reduce gas costs related to Maximal Extractable Value payments when accessing the COINBASE address, lower gas costs for developers, cap developer gas costs in certain cases, and address a similar concern.
The Shanghai Upgrade does not include EIP-4844, which facilitates the “sharding” of the Ethereum blockchain into multiple chains to enhance scalability. Sharding is a scalability solution that divides the whole network of a blockchain into multiple smaller networks called shards.
Validators will have two options for withdrawing their staked ETH. The first option is to create a “withdrawal credential” to unstake their staking rewards accumulated over the past years. The second option is to exit the Beacon Chain completely by unstaking all of their 32 ETH, which is the maximum allowed per validator.
The Shanghai Upgrade is expected to have a significant impact on the market. Approximately 16 million staked ETH will be available for withdrawal, and traders are paying attention to how the market may move. Some traders believe that the upgrade will trigger a selling wave, with many taking profit once staked ETH is unlocked. Others believe that the upgrade will encourage more staking.
Conclusion
The Ethereum Shanghai Upgrade is a minor upgrade for the Ethereum network (albeit a large upgrade in terms of unlocked Ethereum). The Ethereum core developers use this upgrade to stabilize the network rather than to deploy aggressive changes. This is why most of the improvements are smaller quality of life improvements rather than fundamental architecture changes.
The biggest impact of Shanghai has to do with staking and locked tokens. It will enable validators to withdraw staked ETH from the Beacon Chain, which has been locked since December 2020. The upgrade includes several other EIPs that aim to reduce gas costs for Ethereum developers. While it is unclear how the upgrade will impact the market in the short term, it is certain that traders will be watching how much of the available ETH will be cashed out, which could push the price of ETH down.
