A diverse set of clients is key to the Ethereum network’s health and decentralization. Diversity ensures that innovation continues at the base layer of the protocol, that the network is resilient in the face of potential attacks or bugs, and that a broad set of participants are engaged in debating potential changes to core protocol.
While clients provide an essential service to the network (without them, there is no network!), it has historically been difficult for them to capture value. Recently, more avenues have become available for these teams to build sustainable businesses, but most of those focus on mainnet-adjacent opportunities rather than the main Ethereum network. Additionally, these opportunities generally do not scale proportionally to the amount of value created.
To ensure that client teams have a strong incentive to maintain the core Ethereum network over the long term, the Ethereum Foundation has launched a Client Incentive Program. This program offers client teams ETH-denominated rewards which unlock over time, as long as they continue to build software which meets the performance and security requirements of mainnet.
Specifically, teams in the program will receive a total of 144 validators (4608 ETH) each to operate on mainnet. The size of these grants recognizes both the excellent work performed over the past few years and the many development challenges expected well into the future. One team, whose client is more recently mainnet compatible than their peers, has been included in the program with a 50% stake. The teams eligible for the program are, alphabetically:
- Go-ethereum (geth)
- Hyperledger Besu
- Lodestar (50% stake)
The validator deposits are made up-front to be operated by teams immediately, while the withdrawal credentials (the ownership of the funds) will be vested over several years, with the first tranche unlocked at the delivery of Beacon Chain withdrawals. In order to receive this and subsequent tranches of validator withdrawal credentials, teams must continue to maintain their clients, meet performance benchmarks on mainnet, and generally contribute toward delivering the Ethereum community’s roadmap, as it evolves over time.
Post-merge, due to validators earning transaction fees, the program will begin to provide a steady source of revenue to teams. As the grants vest, teams are free to do what they please with the validators they control – e.g. continue to stake and earn rewards, withdraw and liquidate, or some combination of the two. Also note, the Client Incentive Program is in addition to any grants that the EF provides to these teams.
Geth’s participation in this program is unique, since they are a team housed within the Ethereum Foundation. However, the Geth team – like the other clients listed above – will have complete discretion over how to use these validators, earned fees, and their ETH deposits as the grants vest.
The structure of the program aligns teams with the long term health of the network and ensures they are incentivized to build secure and performant software. It was designed to be backwards-looking and reward teams who have already delivered production-quality software. We hope that it provides a foundation for a healthy incentivization of core contributors to Ethereum. As always, the Ecosystem Support Program is available, and eager, to fund earlier innovative Ethereum implementation efforts including new client teams.
We are excited to finally share this initiative publicly, and we look forward to seeing more ways for the community to come together and support public goods!
Next Article: Metaverse Define & How to invest in?
Next Article: Opensea volume, what is? How it works? Is it safe?
Next Article: Is crypto the future?