Eth2.0-specs: Economic calculator for Eth2.0

[dankrad]

Currently, in order to understand the exact economic implications of being a validator, a very careful reading of the spec is required in order to know what the exact risks and benefits are. We want to create more transparency around this issue by adding a visual calculator, that given a number of inputs will show what the individual validator stands to gain and lose.

Target group: Individuals running validators and economists analysing Eth2.0 incentives for validators

Technology: This should probably be a web app, ideally a node module that can either run standalone or be integrated into another app such as a validator client GUI to give more information to the user

Inputs:

• Should be a number of sliders:
  
  
  
  • expected online time
  
  
  • cost to run validator node (electricity/hardware deprecation/cloud rental)
  
  
  • cost of capital
  
  
  • probability of failures that lead to penalties and/or slashing (equivocation, key reveals, incorrect custody bits, missing of custody deadlines, incorrect attestations (fraud proofs))
  
  
  • probability of those failures being caught by a second "don't slash" layer that polices validator client outputs
  
  
  • probability that these failures are correlated with other validators (fraction of other validators using the same client software)
  
  
  • number of competing validators (with same settings or different settings)
  
  
  • Ability to load custom configurations (mainnet, testnet, etc.)
  
  

Outputs:

• numerical outputs showing the expected returns with variance and total probability of slashing
• a graph that shows expected profits and losses as a diagram per time period
• a graph that shows long-term development of the initial deposit with this expected return
• a graph illustrating total ETH inflation

Further ideas on how to improve this are very welcome, this is just an initial set of ideas. The goal should be a tool that can allow people to gain a good intuition on validator rewards and penalties.

[hwwhww]

Inputs:

Plus the functionality of custom configurations (with mainnet setting by default):

• Rewards and penalties configurations
• Gwei values

[JustinDrake]

Would also be nice to show global ETH inflation based on number of active/online validators.

[dankrad]

Added these :)

[JustinDrake]

Pinging @econoar who may be interested in contributing :)

[vbuterin]

This seems easily doable with a spreadsheet. Haven't some of these crypto research orgs done one already?

[dankrad]

Good point, that may very well be a more maintainable solution to this problem. Would be interested if it exists already?

[vbuterin]

Here is a spreadsheet Collin Myers worked on: https://docs.google.com/spreadsheets/d/1zU1wzlDsw-BPWp5d4eJMJLHGuCbB_UJ2rPLP7eanW9I

[vbuterin]

I just updated it with the most recent formulas based on the frozen phase 0 spec.

Perhaps the most surprising (though really not so surprising) finding is just how low issuance gets if you assume even a slightly less than 100% average online rate (eg. 90% gets you 1.11% issuance instead of 1.51%)

[hwwhww]

Here is a spreadsheet Collin Myers worked on: https://docs.google.com/spreadsheets/d/1zU1wzlDsw-BPWp5d4eJMJLHGuCbB_UJ2rPLP7eanW9I

Haven't seen it before, and it's very informative!
I think the point of this calculator is to get more attention and interactivity. But indeed maintainability is an important factor.

I will ping Collin to get more insight.

[collinjmyers]

Hey Everyone! Excited this topic is getting some traction as I have been focused on it for a while. Shoutout to V for updating the model with the Phase 0 freeze metrics. I am currently working to refine/simplify the model and produce insightful network level sensitivity charts. I will update the group and send the new model when finished!

[JustinDrake]

I will update the group and send the new model when finished!

@collinjmyers Are you still working on the economic calculator? If so, could you share an update? :)

[collinjmyers]

https://docs.google.com/spreadsheets/d/15tmPOvOgi3wKxJw7KQJKoUe-uonbYR6HF7u83LR5Mj4

[collinjmyers]

Check out the Telegram group @eth2calculator - I will be doing a few updates to the model on Tuesday to model out the 500K threshold and include in the graphs

[hwwhww]

Closing in favor of ConsenSys Codefi team's work :)