This FAQ section aims to answer the most common questions we receive from users and lurkers alike.

What is Smoothly?

Smoothly is built on a smart contract and oracle that allows home validators to pool together their tips and MEV from block proposals in order to smooth out and increase their average reward. This in turn boosts the average APY for home stakers and helps us remain competitive in the staking marketplace. Validators change the fee recipient address in their validator client to our pool contract and can connect their wallet and claim their “share” of the rewards every two weeks.

What is a home staker?

Home stakers (aka Solo Stakers) are the backbone of the Ethereum network. They (myself included) are individuals running an execution, consensus, and validator client either on their own hardware or on a remote server. Although Smoothly is targeted at individuals, it may also be useful for small entities running any number of validators for their clients. Remember that, statistically speaking, joining the pool is beneficial to you as long as your validators do not represent the majority of the pool.

What is MEV?

As a pool member, you are highly encouraged to run the MEV Boost sidecar on your validating machine as a way to generate more value to the pool. In general, MEV stands for Maximal Extractable Value and is a natural occurrence when users can see the public tx mempool. Because the mempool is public and transparent, there exist clever and sophisticated ways to order transactions which most commonly result in arbitrage between many parties. These sophisticated entities are known as builders, and they offer “tips” to block proposers in order to propose the block they have built using the txs from the mempool. The magnitude of the tip payed to the block proposer is dependent on the value that the builder can generate by reordering or inserting transactions in the block.

Which MEV Boost Relays can I use?

This is up to you, there are no restrictions in place on relays. This is an important choice due to the fact that you are relying on them to send fees to the correct fee recipient. Be wary of using brand new relays until they have proven themselves trustworthy.

What are the benefits of MEV smoothing?

Because block proposals are random, the universe gets to decide when it’s your turn. I’ve heard of individual validators going a year without a block proposal. In addition to the randomness of block proposals, so to are the magnitude of tips and MEV associated with your block. Because fees are highly dependent on network activity, individuals are inclined to “pool” their tips together with other validators in order to increase their chance of receiving tips from a block when network activity is very high and block space demand is at its peak. Ken Smith, an active contributor to Rocketpool, performed a monte carlo simulation on the statistical benefits of an MEV smoothing pool. The tl;dr is that on average over a 5 year time span, validators in a “fee recipient” pool earn 41.6% more ETH than those not in the pool. Also worth noting is that the smoothing pool outperformed single validators 9/10 times over that 5 year period. Here is a link to his report.

What conditions determine my validators status?

After your validator is registered, it is added to the pool index and its status will show “awaiting activation”. During this time, that validator will accrue rewards, but they are locked in the pool contract until the validator proposes a block with the Smoothly contract address as the fee recipient. After that condition is met, the validator status will change to “Active”, and all of the past rewards will be available for withdrawal. Additionally, once the status is Active, you’ll be able to claim rewards at fortnightly intervals going forward.

Why do I have to wait for a block proposal to claim rewards?

This is done In order to prevent validators from cheating the system.  As we have no control over your validator and no way to actively monitor your fee recipient, its beneficial for everyone to verify that each validator has set their fee recipient to our pool contract. Once you propose a block with our fee recipient, you will be able to claim your accrued rewards, then going forward you are able to claim your rewards every two weeks. IF YOU EXIT THE POOL WHILE YOUR VALIDATOR IS PENDING ACTIVATION, YOUR ACCRUED REWARDS WILL BE ADDED TO THE POOL.

Why am I required to Deposit eth when registering?

Each validator that registers is required to deposit 0.65 ETH into the contract as an insurance deposit. This eth is there to protect and reimburse the pool in the case of malicious or lazy validators. Assuming you’re neither of those, you have nothing to worry about and will get that back upon pool exit.

What are the conditions for validators to be penalized?

The answer to this depends on the status of the validator. Validators who are “Awaiting Activation” have not proven that their validator is configured correctly and are unable to claim their rewards from the pool. Any validator penalized with this status will have their accrued rewards added to the pool and that validator begins accruing from zero.