CoinDesk is discontinuing Ethereum Validator ‘Zelda’ and we are now waiting for the money back

As loyal Valid Points readers will recall, CoinDesk set up its own Ethereum validator, fondly called “Zelda,” in 2020 to witness the blockchain’s landmark shift to an energy-efficient proof-of-stake consensus mechanism from the original proof-of-work . – the same one used by Bitcoin. The aim was to learn, and to report.

This transition was effectively completed last week, when Ethereum’s Shanghai upgrade (aka “Shapella”) went live, enabling the first ever withdrawals from the blockchain’s staking mechanism.

In line with the original plan, we took the necessary steps to terminate our validator and redeem our initial deposit of 32 ether (ETH) – worth around $15,000 back in 2020 – along with the additional ETH that Zelda was awarded over time to help keep the blockchain secure and running smoothly.

It has been a learning experience and one of the key lessons was discovering how long it can take for validators to withdraw ETH when the exit queue is backed up. According to CoinDesk Director of Engineering C. Spencer Beggs, we could be looking at about a week before our withdrawal request is processed and 32 ETH hits our wallet.

Another thing we have learned, along with investors and traders in digital asset markets, is that the Shanghai upgrade turned out to be quite bullish for the price of ether; it was not the atrocious selloff that some analysts had warned would come. It was never our intention to speculate on the price of ETH, but after a rally in the second largest cryptocurrency to an 11-month high above $2,100, our original principal is now worth nearly $70,000.

CoinDesk’s validator rewards during the approximately 30-month experiment total 3.65618 ETH (approximately $7,600), and as promised, we plan to donate these profits to charity.

Now that our validation project is ending, it is also time to say goodbye to Valid Points, which was launched a few years ago to focus exclusively on Ethereum and the wider range of projects related to it. But don’t worry – the newsletter isn’t going away. Next week, Valid Points will officially become The Protocol, which will focus on blockchain and crypto technology more broadly. You, the reader, don’t have to do anything; your existing subscription is transferred.

We want to thank former CoinDesk reporters Christine Kim and Will Foxley for having the foresight (and courage) to undertake this project and launch Valid Points back in 2020, along with all the other journalists who have contributed to the newsletter over the years. And a heroic shout out to Beggs, who figured out how to do all this and oversaw the technical aspects so competently.

The following is a detailed walkthrough of the steps Beggs took to decommission our Ethereum validator and redeem our stake from the blockchain.

Validator tracking app Beaconcha.in provided the snapshot below of the validator’s status at the start of the process. (The yellow exclamation point triangle shows that the validator had not yet updated the withdrawal keys.)

Beggs took the steps to end Friday the 14th. April, two days after the Shanghai upgrade was successful. (Yes, we admit we attended the watch parties.)

He used the Ethereum “staking deposit CLI” — the official management service for generating the cryptographic keys used on the proof-of-stake blockchain — to generate a signed message known as “BLSToExecutionChange.” This message is a command that informs the blockchain that we wanted to update the validator’s withdrawal address, which had not been possible before the Shanghai upgrade.

We then broadcast that message to our beacon node.

“I signed the message and sent it to our beacon, and the beacon sent it to the blockchain,” Beggs said.

But after just an hour there was the status update below from Beaconcha.in; it had already gone through:

With the withdrawal credentials updated, Beggs logged into our server using the Lighthouse program, which runs both our validator and beacon clients, and issued the request to terminate.

“You just type in a command,” he said.

We received the following response from the server:

There is a lot of information on that screen, but an important part is in the last visible lines – estimating that our exit will be processed at Ethereum blockchain epoch 196,690, and that we will be able to withdraw at epoch 196,946. (At that time were we in epoch 194,506.)

The script read: “End the epoch in approximately 838,656 seconds.”

“I did the math to convert it to days,” Beggs said. It worked out to about 9.7 days.

Currently the Ethereum blockchain is at epoch 195,372 and Beaconcha.in now estimates that the output will be processed on April 24 at 16:16 UTC, and the withdrawal on 25 April at 19:34 UTC.

Meanwhile, according to Beggs, Zelda is “still validating and attesting.” Works until the end.

Asked for lessons during the winding down, Beggs says he’s glad (or lucky) that he took detailed notes about the project from the very beginning.

“I was sweating bullets there for a second because I thought I did something very wrong because when I tried to generate the ‘BLSToExecutionChange’ message, my keys and my previous withdrawal credentials didn’t match,” Beggs recalled.

He looked back at his own documentation about the project to remind himself how to verify the keys – by regenerating them using our original seed phrase and validation index. With the clue (from his two years past self), he was able to figure it out.

“Finally it came out and generated the right way,” Beggs said in a Zoom interview. “I’m glad I wrote everything down.”

Sage D. Young contributed to this report.