Everything you need to know about shards, staking validators, attestations, committees, checkpoints, and finality.
Remember the joy you felt when you started getting aha moments about blockchains? Are you eager for a similar understanding of the Beacon Chain? Ethereum’s Beacon Chain is the heart of a system where most content is too technical, niche, or not deep enough.
Here, you’ll gain a gratifying understanding of the Beacon Chain’s elements and mechanics. Examples will explain key details at the right level to make you proficient and save time. We assume you have a solid foundation of Ethereum or Bitcoin, and some familiarity with Proof of Stake. Let’s dig into the bigger picture of shards, staking validators, attestations, committees, checkpoints, and finality.
New to Eth2? Explore our Ethereum 2.0 Knowledge Base.
Sharding: A Big Picture
To appreciate the Beacon Chain, an introduction to sharding helps. The main problem in scalability that blockchains, including Ethereum, currently face is: every node has to verify and execute every transaction.
In computer science, there are two main approaches to scaling:
- Scaling vertically: basically, make nodes more and more powerful.
- Scaling horizontally: basically, add more nodes.
For decentralization, blockchains need to scale horizontally. A goal of Ethereum 2.0, also called eth2 or Serenity, is for nodes to run on consumer hardware. Sharding is the term for horizontally partitioning a database.
Generally, a shard chain has a subset of nodes processing it. Virtual miners, validators, are assigned to shards, and only process and validate transactions in that shard (chain).
Ethereum’s shards have a dynamic subset of nodes processing it block-by-block.
The main challenge with sharding a blockchain is the security of shards. Since validators are spread out across shards, malicious validators could takeover a single shard.
A key part to a solution:
- random shuffling of validators, where every shard block has a (pseudo) randomly chosen committee of validators, ensures that it is mathematically improbable that an attacker controlling less than ⅓ of all validators can attack a single shard
Fraud proofs, custody proofs, and data availability checks are also important security components but require their own explainers.
The current eth2 plan is for 64 shards. Although shards are separate from the Beacon Chain, we’ll describe some key elements of the overall system.
Sharding has revealed clues about what the Ethereum Beacon Chain does and needs. We’ll acquire a sense of why there are additional components to classical blockchains. The nascent field of sharded blockchains always welcomes innovations from inspired readers.
Ethereum 2.0 Phases
Briefly, Ethereum 2.0 has three phases:
- Phase 0 — Beacon Chain
- Phase 1 — shards
- Phase 2 — execution
An analogy with the human body:
An analogy with an orchestra that’s tough to beat:
- Phase 0 — conductor
- Phase 1 — instruments
- Phase 2 — musicians
All phases are integral to the system and have different characteristics. Phase 0 is part of Ethereum 2020. Phase 1 is generally more inanimate and static than the other phases. Phase 2 is generally about action and agency.
Slots and Epochs
The Beacon Chain provides the heartbeat to Ethereum 2.0. It provides the tempo and rhythm for the system’s harmony and consensus. Each slot is 12 seconds and an epoch is 32 slots: 6.4 minutes.
A slot is a chance for a block to be added to the Beacon Chain and shards. You can imagine that the Beacon Chain and shard chains are choreographed in lockstep. Every 12 seconds, one beacon (chain) block and 64 shard blocks are added when the system is running optimally. Validators do need to be roughly synchronized with time.
A slot is like the block time, but slots can be empty. Genesis blocks for the Beacon Chain and shards are at Slot 0. Shards will start at a future epoch than the Beacon Chain’s Epoch 0, but will have their own Epoch 0 that includes their genesis blocks.
Introduction to Validators, Attestations, and the Beacon Chain
While Proof of Work (PoW) is associated with miners, in Ethereum 2.0 validators are Proof of Stake “virtual miners”. Validators are actively participating in the consensus of the Ethereum 2.0 protocol. Their incentives are discussed later in Beacon Chain Validator Rewards and Penalties.
A block proposer is a validator that has been pseudorandomly selected to build a block.
Most of the time, validators are attesters that vote on beacon blocks and shard blocks. These votes are recorded in the Beacon Chain. The votes determine the head of the Beacon Chain, and the heads of shards.
At every epoch, a validator is pseudorandomly assigned to a slot and shard. The validator is participating in the consensus of that assigned shard so that it can vote for that shard’s head. The validator links the shard head to the beacon block for a slot.
An attestation is a validator’s vote, weighted by the validator’s balance. Attestations are broadcasted by validators in addition to blocks.
Validators also police each other and are rewarded for reporting other validators that make conflicting votes, or propose multiple blocks.
The contents of the Beacon Chain is primarily a registry of validator addresses, the state of each validator, attestations, and links to shards. Validators are activated by the Beacon Chain and can transition to states, briefly described later in Beacon Chain Validator Activation and Lifecycle.
Staking Validators: Semantics
Validators are virtual and are activated by stakers. In PoW, users buy hardware to become miners. In Ethereum 2.0, users stake ETH to activate and control validators.
It is clearer to associate stakers with a stake, and validators with a balance. Each validator has a maximum balance of 32 ETH, but stakers can stake all their ETH. For every 32 ETH staked, one validator is activated.
Validators are executed by validator clients that make use of a beacon (chain) node. A beacon node has the functionality of following and reading the Beacon Chain. A validator client can implement beacon node functionality or make calls into beacon nodes. One validator client can execute one or more validators.
Related: Read the Ethereum 2.0 Staking Report
Crosslinks: Rooting Shards to the Beacon Chain
A crosslink is a reference in a beacon block to a shard block. A crosslink is how the Beacon Chain follows the head of a shard chain. As there are 64 shards, each beacon block can contain up to 64 crosslinks. A beacon block might only have one crosslink, if at that slot, there were no proposed blocks for 63 of the shards. Crosslinks are planned for eth2 Phase 1 to root the shard chains into the Beacon Chain, serving as the base of the shard fork choice, shard chain finality, and for cross shard communication. All shard chains are following the Beacon Chain at all times.
A committee is a group of validators. For security, each slot (in the Beacon Chain and each shard) has committees of at least 128 validators. An attacker has less than a one in a trillion probability of controlling ⅔ of a committee.
The concept of a randomness beacon that emits random numbers for the public, lends its name to the Ethereum Beacon Chain. The Beacon Chain enforces consensus on a pseudorandom process called RANDAO.
Proposers are selected by RANDAO with a weighting on the validator’s balance. It’s possible a validator is a proposer and committee member for the same slot, but it’s not the norm. The probability of this happening is 1/32 so we’ll see it about once per epoch. The sketch depicts a scenario with less than 8,192 validators, otherwise there would be at least two committees per slot.
This Beacon Chain explainer focuses on beacon committees: the validators that serve the Beacon Chain. A (beacon) committee is pseudorandomly assigned a shard to crosslink into a beacon block. There are no persistent committees. The committee responsible for crosslinking a shard block changes block-by-block.
Shard committees that solely build shard chain blocks are a future topic. It’s possible for many shard blocks to be built by shard chain validators that do not interact with the Beacon Chain. However, for a shard to communicate with other shards, it needs a beacon committee to crosslink it to a beacon block.
The diagram is a combined depiction of what happened in three slots. In Slot 1, a block is proposed and then attested to by two validators; one validator in Committee A was offline. The attestations and block at Slot 1 propagate the network and reach many validators. In Slot 2, a block is proposed and a validator in Committee B does not see it, thus it attests that the Beacon Chain head is the block at Slot 1. Note this validator is different from the offline validator from Slot 1. Attesting to the Beacon Chain head is called an LMD GHOST vote. In Slot 3, all validators in Committee C run the LMD GHOST fork choice rule, and independently attest to the same head.
A validator can only be in one committee per epoch. Typically, there are more than 8,192 validators: meaning more than one committee per slot. All committees are the same size, and have at least 128 validators. The security probabilities decrease when there are less than 4,096 validators because committees would have less than 128 validators.
At every epoch, validators are evenly divided across slots and then subdivided into committees of appropriate size. All of the validators from that slot attest to the Beacon Chain head. Each of the committees in that slot attempts to crosslink a particular shard. A shuffling algorithm scales up or down the number of committees per slot to get at least 128 validators per committee.
As an example, assume 16,384 validators. 512 validators are pseudorandomly assigned to Slot 1, another 512 to Slot 2, and so on. The 512 validators for Slot 1 are then subdivided into four committees and pseudorandomly assigned to shards. Assume that Shards 33, 55, 22, 11 are the shard assignments. All 512 validators cast a Slot 1 LMD GHOST vote. 128 validators in one of the four committees attempt to crosslink Shard 33. In another committee, 128 validators attempt to crosslink Shard 55. 128 validators in another committee attempt to crosslink Shard 22. Another 128 validators attempt to crosslink Shard 11.
For Slot 2, the process repeats. The 512 validators for Slot 2 are subdivided into four committees and pseudorandomly assigned to shards. Assume that Shards 41, 20, 17, 15 are the shard assignments. All 512 validators for Slot 2 attest their views of the Beacon Chain head at Slot 2. The committees attempt to crosslink Shards 41, 20, 17, 15.
The process repeats for the remaining slots in the epoch. Each validator has a slot when it can speak up, attest and crosslink. At the end of the epoch, all 16,384 validators have had a chance to attest and crosslink. But so far the validator votes have been slot-specific rather than epoch-specific. It’s like voting for your local government, rather than voting in a broader national election. All 16,384 validators have not voted on the same thing. The upcoming sections on checkpoints and finality, describe the epoch-specific vote that validators cast when it’s their slot to speak up. At their assigned slot, all 16,384 validators also vote for the epoch’s checkpoint.
Beacon Chain Checkpoints
A checkpoint is a block in the first slot of an epoch. If there is no such block, then the checkpoint is the preceding most recent block. There is always one checkpoint block per epoch. A block can be the checkpoint for multiple epochs.
Note Slot 65 to Slot 128 are empty. The Epoch 2 checkpoint would have been the block at Slot 128. Since the slot is missing, the Epoch 2 checkpoint is the previous block at Slot 64. Epoch 3 is similar: Slot 192 is empty, thus the previous block at Slot 180 is the Epoch 3 checkpoint.
Epoch boundary blocks (EBB) are a term in some literature (such as the Gasper paper, the source of the diagram above), and they can be considered synonymous with checkpoints.
When casting an LMD GHOST vote, a validator also votes for the checkpoint in its current epoch, called the target. This vote is called a Casper FFG vote, and also includes a prior checkpoint, called the source. In the diagram, a validator in Epoch 1 voted for a source checkpoint of the genesis block, and a target checkpoint of the block at Slot 64. In Epoch 2, the same validator voted for the same checkpoints. Only validators assigned to a slot cast an LMD GHOST vote for that slot. However, all validators cast FFG votes for each epoch checkpoint.
A vote that is made by ⅔ of the total balance of all active validators, is deemed a supermajority. Pedagogically, suppose there are three active validators: two have a balance of 8 ETH, and a sole validator with a balance of 32 ETH. The supermajority vote must contain the vote of the sole validator: although the other two validators may vote differently to the sole validator, they do not have enough balance to form the supermajority.
When an epoch ends, if its checkpoint has garnered a ⅔ supermajority, the checkpoint gets justified.
If a checkpoint B is justified and the checkpoint in the immediate next epoch becomes justified, then B becomes finalized. Typically, a checkpoint is finalized in two epochs, 12.8 minutes.
On average, a user transaction would be in a block in the middle of an epoch. It’s half an epoch until the next checkpoint, suggesting transaction finality of 2.5 epochs: 16 minutes. Optimally, more than ⅔ of attestations will have been included by the 22nd slot of an epoch. Thus, transaction finality is an average of 14 minutes (16+32+22 slots). Block confirmations emerge from a block’s attestations, to its justification, to its finality. Use cases can decide whether they need finality or an earlier safety threshold is sufficient.
What Happened at the Beacon Chain Head
The epoch boundary block at Slot 96 is proposed and contains attestations for the Epoch 2 checkpoint. The number of attestations for the Epoch 2 checkpoint now reaches the ⅔ supermajority. This causes the justification of the Epoch 2 checkpoint, and thus the finality of the previously justified Epoch 1 checkpoint. The finality of Slot 32 immediately causes the finality of all blocks preceding it. When finalizing a checkpoint, there is no limit to the number of blocks that can be finalized. Although finality is only computed at epoch boundaries, attestations are accumulated at each block, as described in alternate narratives “What could have happened from genesis to the head” below.
All the crosslinks contained in the beacon blocks from Slot 1 to Slot 32, would lead to the finality of the shard chains. In other words, a shard block is finalized when it is crosslinked into a beacon block that is finalized. A crosslink by itself is insufficient to finalize a shard block, but contributes to the shard chain’s fork choice.
What Could Have Happened From Genesis to the Head
With the same illustration, here is a storyline that could have been observed from genesis. All the proposers from Slot 1 until Slot 63 propose a block, and these appear on-chain. With each block in Epoch 1, its checkpoint (block at Slot 32) accumulates attestations from 55% of validators. The block at Slot 64 is proposed and it includes attestations for the Epoch 1 checkpoint. Now, 70% of validators have attested to the Epoch 1 checkpoint: this causes its justification. The Epoch 2 checkpoint (Slot 64) accumulates attestations throughout Epoch 2 but does not reach the ⅔ supermajority. The block at Slot 96 is proposed and it includes attestations for the Epoch 2 checkpoint. This leads to reaching the ⅔ supermajority and the justification of the Epoch 2 checkpoint. Justifying the Epoch 2 checkpoint finalizes the Epoch 1 checkpoint and all prior blocks.
Here is another possible scenario. Consider only until Epoch 1. The checkpoint at Epoch 1 could have obtained a ⅔ supermajority before the checkpoint at Epoch 2 is proposed. For example, as the blocks in Slot 32 to Slot 54 are proposed, the attestations to justify the checkpoint (Slot 32) could have already reached the ⅔ supermajority. In this case, the checkpoint would have been justified before Epoch 2. A checkpoint can be justified in its current epoch, but its finalization requires at least the epoch after it.
The justification of a block can sometimes finalize a block two or more epochs ago. The Gasper paper discusses these cases. They are expected only in exceptional times of high latency, network partitions, or strong attacks.
Finality is essential for shards and parties to Ethereum’s blockchain to have guarantees about transactions. Finality reduces complexity with cross shard communications. Without finality, cascading rollbacks of transactions within and across shards would be disruptive and could nullify sharding’s benefits.
Attestations: A Closer Look
An attestation contains both an LMD GHOST vote and an FFG vote. Optimally, all validators submit one attestation per epoch. An attestation has 32 slot chances for inclusion on-chain. This means a validator may have two attestations included on-chain in a single epoch. Validators are rewarded the most when their attestation is included on-chain at their assigned slot; later inclusion is a decaying reward. To give validators time to prepare, they are assigned to committees one epoch in advance. Proposers are only assigned to slots once the epoch starts. Nonetheless, secret leader election research aims to mitigate attacks or bribing of proposers.
Committees allow for the technical optimization of combining signatures from each attester into a single aggregate signature. When validators in the same committee make the same LMD GHOST and FFG votes, their signatures can be aggregated.
Beacon Chain Validator Rewards and Penalties
Without getting too deep, we’ll discuss six topics regarding validator incentives:
- attester rewards
- attester penalties
- typical downside risk for stakers
- slashings and whistleblower rewards
- proposer rewards
- inactivity penalty
Validators are rewarded when they make attestations (LMD GHOST and FFG votes) that the majority of other validators agree with. In eth2 Phase 1, validators will also receive rewards for crosslinks. Rewards are solidified when blocks get finalized.
On the flip side, validators are penalized for not attesting or if they attest to a block that does not get finalized.
Before outlining less common penalties and rewards, you may want to know your downside risk in becoming a staker. As a staker concerned about how much ETH you may lose, it is a mirror of how much you can earn. If a validator stands to make 10% in a year on rewards, a (honest) validator stands to lose 10% if they do the worst job possible. For example, a validator that is always offline or always votes on blocks that do not get finalized, will be penalized the amount that a validator would be rewarded for making punctual attestations that are finalized.
Slashings are penalties ranging from over 0.5 ETH up to a validator’s entire stake. For committing a slashable offence a validator loses at least 1/32 of their balance and is deactivated. The validator is penalized as if it was offline for 8,192 epochs. The protocol also imposes an additional penalty based on how many others have been slashed near the same time. The basic formula for the additional penalty is: validator_balance*3*fraction_of_validators_slashed. An effect is that if ⅓ of all validators commit a slashable offence, they all lose their entire balance. The validator that reports a slashable offence gets a whistleblower’s reward.
Proposers of blocks that get finalized, obtain a sizable reward. Validators that are consistently online doing a good job accrue ~1/8 boost to their total rewards for proposing blocks. When a slashing happens, proposers also get a small reward for including the slashing evidence in a block. In eth2 Phase 0, all of the whistleblower’s reward actually goes to the proposer.
Ethereum 2.0 is a system with many mechanisms, some that can be appreciated more by their overall effects. The designed rewards and penalties culminate in an inactivity penalty. Basically, if there have been more than four epochs since finality, all validators suffer an inactivity penalty that increases quadratically until a checkpoint is finalized. The inactivity penalty guarantees this type of outcome: if 50% of validators drop offline, blocks will start finalizing again after 21 days.
There are three slashing conditions for validators. They can be described as a double proposal, an FFG double vote, and an FFG surround vote. An LMD GHOST vote is not slashable.
A double proposal is a proposer proposing more than one block for their assigned slot.
A double vote is a validator casting 2 FFG votes for the same target, but a different source.
A surround vote is a validator casting an FFG vote that surrounds or is surrounded by a previous FFG vote they made. Here are two examples based on a scenario that a validator made an FFG vote in Epoch 5 with a source of Slot 32 and target of Slot 128:
- An FFG vote in Epoch 6 with a source of Slot 64 and target of Slot 96, would be an FFG vote that was surrounded by their Epoch 5 vote.
- An FFG vote in Epoch 6 with a source of Slot 0 and target of Slot 160 would surround their FFG vote in Epoch 5.
An FFG vote in Epoch 6 that has a target of Slot 128 would be a double vote and is slashable, unless the source was Slot 32. Identical FFG votes are not slashable.
Two FFG votes with the same source, are never slashable. This is important for liveness. For example, if there are two forks each backed with around 50% of validator balances, the protocol needs to encourage (not punish) validators to switch forks by voting with the same source and a different target. Instead of a stalemate, validators could safely switch between forks to try and reach a ⅔ supermajority.
A whistleblowing validator needs to include the conflicting votes to prove that another validator should be slashed. Efficiently finding a conflicting vote among a large history is an algorithms and data structures challenge. The slashing detector open engineering challenge is seeking contributors.
A validator is in total control to avoid getting slashed: it only needs to remember what it has signed. An honest validator cannot be slashed by the actions of other validators. As long as a validator does not sign a conflicting attestation or proposal, the validator cannot be slashed.
A validator client may use multiple beacon nodes for factors like better uptime, trust, and Denial of Service protection. In these setups, or where a backup validator client is used, users need to be careful that the validator does not sign conflicting messages.
Beacon Chain Validator Activation and Lifecycle
Each validator needs a balance of 32 ETH to get activated. A user staking 32 ETH into a deposit contract on Ethereum mainnet, will activate one validator.
The Beacon Chain exits (deactivates) all validators whose balance reaches 16 ETH; stakers will be able to withdraw any remaining validator balance but not in eth2 Phase 0.
Validators can also exit voluntarily after serving for 2,048 epochs, around 9 days. When exiting, there is a delay of four epochs before stakers can withdraw their stake. Within the four epochs, a validator can still be caught and slashed. An honest validator’s balance can then be withdrawn in around 27 hours. But if a validator gets slashed, the staker has to wait 8,192 epochs (approximately 36 days) before being able to withdraw.
Further technical details are described in A note on Ethereum 2.0 phase 0 validator lifecycle including this flowchart:
To avoid large changes in the validator set in a short amount of time, there are mechanisms limiting how many validators can be activated or exited within an epoch. For example, these make it more difficult to activate many validators quickly to attack the system.
The Beacon Chain uses a deeper concept of effective balances which change less often than validator balances and enable technical optimizations.
At every epoch, validators are evenly divided across slots and then subdivided into committees of appropriate size. Validators can only be in one slot, and in one committee. Collectively:
- all validators in an epoch attempt to finalize the same checkpoint: FFG vote
- all validators assigned to a slot attempt to vote on the same Beacon Chain head: LMD GHOST vote
- all validators assigned to a committee attempt to crosslink a particular shard
Optimal behavior rewards validators the most.
Activation of the Beacon Chain requires at least 16,384 validators at genesis. The number of validators can decrease with slashings or voluntary exits, or stakers can activate more. Many more validators are expected as the system ramps up to eth2 Phase 1 and beyond. The Beacon Chain needs at least 262,144 validators (over eight million ETH staked) to have blocks that include 64 crosslinks.
The world’s never had a scalable platform for decentralized systems and applications before. If you’re inspired to dive deeper, authoritative references are in Ethereum 2.0 Specifications. It includes the Beacon Chain spec, links to other key resources, and issues with bounties. Currently, the most pressing need is Peer-to-Peer Networking. Contribute or refer others to challenges, ethresear.ch or the Ethereum Magician’s forum, and be a part of making history!
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