Why is my validator staking rewards rate higher or lower than I expected?
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Validator rewards vary naturally due to how the Ethereum protocol randomly selects single validators to propose blocks.
Over a long time period, all MetaMask validators are expected to earn a similar reward rate, close to the expected rate presented in the staking widget (see How do validator staking rewards work?). However, since validators are randomly selected by the Ethereum protocol to propose blocks, rewards may be higher for a short period of time if the validator is selected and the block offers high MEV rewards. Similarly, rewards may be lower if the validator has not yet been selected to propose a block.
With 1 million active validators at the time of writing, and one block proposed every 12 seconds, each validator is expected to propose a block every four months.
Reward variability in the wild
This is what a validator's rewards look like over a short period of time:
And this is what a validator's rewards look like over a long period of time, clearly showing spikes where it was selected for block proposal:
In the above example, the validator has proposed seven blocks over the last 18 months, with rewards ranging between 0.04 ETH and 0.16 ETH.
Reasons behind reward variability
Over a short period of time, validators earn rewards for attesting the validity of the blocks proposed by other validators. Each validator is expected to attest each and every block. In return, the validator receives a small amount of ETH (“consensus reward”) — 0.000009 at the time of writing — every 6.4 minutes. This is equivalent to 0.002 ETH per day and a reward rate of ~2.4% per annum.
Over a longer period of time, validators also earn rewards for proposing blocks. The block proposal rewards include two components: a base rate (“consensus rewards”) and a variable rate (“execution rewards”).
- The consensus reward is ETH newly created by the Ethereum protocol to reward the validator. It is stable in value, at around 0.035 ETH.
- The execution reward varies because it depends on the specific transactions that are included into the block, and whether or not they include high tips and MEV (Maximum Extractable Value). It can range from 0 to a few ETH. On July 30th, 2023, a validator even proposed a block with 584 ETH of execution rewards!
As such, there is a luck component to validator rewards: how often will your validator propose a block, and what rewards will it earn for proposing this block?
When evaluating over a large number of validators, block proposals historically account for a reward rate of around 15-20%, but for a smaller number of validators in a short time period, this can be higher or lower, and as low as 0% if the validator has not yet proposed a block.
Summary
In conclusion, let's review what is within our control, and what is not:
| Within MetaMask's control | Outside MetaMask's control |
|---|---|
| Ensure validators perform their duties as well as possible. We want your validators to miss as few block attestations and block proposals as possible. Our participation rate is historically above 99.9%. | Which validator is selected to propose a block. Validators are randomly selected by the Ethereum protocol. Some validators may propose two blocks in the same week, while others may not propose any block for months. On average, a validator proposes a block every 140 days. |
| Ensure each proposed block generates as many MEV rewards as possible. We are integrated with highly effective MEV relayers, which compete to relay the block with the highest reward value to your validator(s) to optimize its rewards. | The "tips" and MEV rewards that can be earned by proposing a block. This depends on the transactions included in the block your validator proposes. |
For more information on how rewards are generated and calculated, see here.