Enzyme FAQ
Frequently asked questions when staking with Kiln through Enzyme
Contract address: 0x0816DF553a89c4bFF7eBfD778A9706a989Dd3Ce3
General
What is native protocol staking?
Staking with Kiln and Enzyme offers a native staking experience.
By locking ETH directly into the protocol and receiving a dedicated validator, participants contribute to the security and governance of the blockchain. The rewards earned by validators are determined solely by the protocol, with no involvement from Kiln or Enzyme.
In the case of Ethereum, native staking requires a minimum of 32 ETH or multiples thereof. Unlike platforms like Lido, this form of staking does not involve the issuance of receipt or liquidity tokens. It is a straightforward and direct method of participating in the staking process.
Read more about the different types of staking.
What are the risks of staking?
Engaging in ETH staking entails certain risks that should be thoroughly understood. It is crucial to grasp the potential drawbacks and uncertainties associated with staking your ETH to ensure it aligns with your individual requirements and aligns with your risk appetite.
Slashing risk
Validators face staking penalties, which can result in up to a 100% loss of their staked ETH if they fail to fulfil their responsibilities.
When you stake with this service, Kiln will operate validator(s) on your behalf. If these validators are incorrectly operated, it is possible for a portion of the ETH you have staked to be slashed, meaning they are destroyed by the protocol.
Please read this article to learn more about Kiln monitoring and slashing and downtime mitigation.
Smart contract risk
It is important to acknowledge the inherent risk that the Kiln smart contracts may contain vulnerabilities or bugs.
Our smart contracts have undergone comprehensive audits conducted by industry leaders such as Spearbit and the Ledger Donjon. Access reports and read more about our security practices here.
Technical risk
Ethereum, a rapidly evolving technology developed by a decentralized collective, operates independently of any central authority such as Kiln. It is important to note that, due to its nascent stage, Ethereum may contain potential errors or vulnerabilities. Consequently, these vulnerabilities could pose a slashing risk to the network.
Liquidity and lockup period risk
When you stake your ETH, it becomes locked in the staking process for a certain period of time, during which it is not readily available for immediate use or trading. This lack of liquidity can pose a risk if you need to access your ETH quickly or if market conditions change unfavorably during the staking period. It's important to consider this liquidity risk and assess your own needs for liquidity before engaging in native Ethereum staking.
Additionally, it's important to be aware of the bonding and unbonding periods involved in the staking process. These periods refer to the time it takes for validators to enter and exit the system, as well as the withdrawal queue duration, during which your validator will not be earning any rewards.
Before staking, it is highly recommended to familiarize yourself with these processes. You can find more detailed information on these topics in other sections of this FAQ.
Kiln is a technology services provider that operates a validator on your behalf on the Ethereum blockchain. It enables access to the staking process as defined by the Ethereum protocol developers and does not possess the ability to influence or modify its implementation.
Market, Regulatory and Tax Risk
It's crucial to recognize that financial regulatory authorities possess the authority to make decisions or enact policies that can directly impact cryptocurrencies, including node operators. These decisions are beyond the control of individual users and technology service providers. Therefore, it is essential to take them into consideration before engaging in staking activities.
Unfavorable decisions made by regulatory authorities can potentially result in various consequences such as liquidity issues, significant price fluctuations, and the unavailability of services in certain jurisdictions. It is important to be aware of these risks and evaluate them as part of your decision-making process when considering staking.
Reward distribution and duration
By engaging in native protocol staking and utilizing dedicated validators, Kiln undertakes the operation of a dedicated validator on your behalf. This validator actively contributes to securing the blockchain by performing essential tasks such as proposals and attestations. In return for the performance of these tasks, rewards are generated and distributed by the protocol.
However, it's crucial to note that rewards and the reward rate are not guaranteed, and they are beyond the control of Kiln, users, and any other node operator. The reward rate is not linear or consistent, as it involves an element of randomness. The protocol randomly selects nodes to perform tasks that receive higher rewards. Considering these factors, it is important to be aware of the associated risks and evaluate them as part of your decision-making process when contemplating staking.
Is this staking service custodial or non-custodial?
Non-custodial as you retain full control over the ETH you stake.
Your ETH is never transferred or held by Kiln or Enzyme.
When are the Enzyme / Kiln fees taken?
Fees for operating the validator nodes are only taken when rewards are claimed. Below is an example reward claim transaction
gross rewards claimed
net rewards sent to user wallet
8% commission automatically calculated and paid from gross rewards
Security and Business Continuity
What are the security risks, and how do you mitigate them? Where can I find audit reports?
When you stake with this service, Kiln will operate validator(s) on your behalf. If these validators are incorrectly operated, it is possible that up to 100% of the staked ETH can be slashed, meaning they are destroyed by the protocol.
This is very rare and has never happened to any Kiln validators. Our infrastructure is purpose-built to mitigate this risk. You should however be aware that the risk is never 0.
Please read this article to learn more about Kiln monitoring and slashing and downtime mitigation.
There are two main smart contracts that introduce additional risk:
The deposit contract which takes the incoming ETH and forwards it into the Beacon chain deposit contract
The staking contract which retrieves your rewards. When you make a claim for the rewards, the smart contract and sends them back to you minus a commission that is sent to Kiln/Enzyme. The only wallet that can claim your rewards is the wallet that you originally staked from.
Both contracts were developed by Kiln and have been audited by Halborn, Spearbit and Ledger Donjon twice. Please visit https://security.kiln.fi to request the full audit report.
Who holds the validator keys?
Kiln generates and stores the validator keys used to operate your validator. These keys are safely stored according to practices that have received SOC2 certification.
Your withdrawal keys, which control the address and is eligible to receive the original stake and any accrued rewards upon a withdrawal, are controlled on your wallet.
What happens if Kiln goes out of business?
In the unlikely event that Kiln becomes insolvent, we have a business continuity and disaster recovery plan which we were certified for as part of our successful SOC 2 Type 1 (in 2022) and SOC 2 type 2 (in 2023) audits.
We also have an Ethereum-specific policy involving exiting all validators or transferring validation keys in case Kiln can no longer operate the service.
Staking
Why can I only stake in multiple of 32 ETH?
This is how native Ethereum protocol staking works. Read here for more detail.
With Kiln you are launching your own validator(s) and each validator needs to be funded with 32 ETH.
How long before my validator is active and starts receiving rewards?
Before staking, you should check the estimated entry queue length here.
Scroll down to 'activation queue length'. This will tell you how long you must wait before your validator becomes active.
New validators will join the ‘entry queue’ which is a function of the protocol and cannot be influenced by Kiln, Enzyme or any other node operator.
The queue length is primarily determined by the number of other validators trying to enter and can take multiple weeks / months.
NOTE: the validator will not receive any rewards until it becomes active.
What happens after I stake my 32 ETH?
To stake with Kiln, you start by depositing 32 ETH or multiples into a custom staking smart contract deployed by Kiln.
This deposit is then forwarded to the Beacon Chain deposit contract, which registers your wallet as the owner and links it to a validator.
Kiln takes care of provisioning validators automatically within their infrastructure.
Validators enter the Ethereum protocol entry queue, where they wait to be processed and become active validators. The length of the queue varies depending on the number of other validators also waiting to join.
Once your validator becomes active, it performs important tasks on the network, such as attestations and block proposals on the Beacon Chain. These activities contribute to the security and operation of the Ethereum network, and as a validator, will receive rewards for your participation. Once you start earning rewards as an active validator, you have the exclusive ability to claim and withdraw those rewards. Kiln and Enzyme do not have control over or influence on the rewards you earn as a validator. It's a decentralized process where you retain full ownership and control over your staked ETH and the associated rewards.
IMPORTANT: the "entry queue" is a function of the protocol and cannot be influenced by Kiln, Enzyme, nor anyone else. The length of the queue is primarily determined by the number of other validators attempting to join the network. As a result, the queue can take multiple days, weeks, or even months to clear, depending on the overall demand from validators. The current entry queue can be viewed on this page on Rated.network: "Activation queue length".
How long is the 'entry queue' / 'activation queue' of a new validator at the moment?
See "activation queue length" on this page for the latest number. Note that while your validator is in the activation queue, cannot be exited. Also note that the activation queue is not controlled or influenceable by Kiln, it is controlled by the Ethereum protocol.
Rewards
What rewards can I expect from native staking?
We invite you to read this informative article that provides insights into the expected staking rewards on the Ethereum network. It covers the various types of rewards and their characteristics in detail.
In summary, Ethereum staking offers two types of rewards: consensus layer and execution layer rewards. Execution layer rewards tend to be less frequent but more substantial in value.
On the other hand, consensus layer rewards are received more frequently but are relatively smaller in amount. These rewards become available for claiming once they have been "skimmed" or "withdrawn" by the protocol, which typically takes around five days.
It's important to note that all staking rewards are generated by the Ethereum protocol itself and are not determined or influenced by Kiln, Enzyme, or any other external entity. The rewards are a result of actively participating in the network and contributing to its security and operation.
Are my validator rewards pooled and shared with all users?
No. Each validator earns and receives its own rewards from the protocol. Rewards are not shared or pooled.
Why is my validator earning more / less than the rest of the network or the estimated rate on the Kiln dashboard?
We invite you to read our comprehensive blog post that provides a deeper understanding of how staking rewards work and explores the different types of rewards in detail. It will provide you with valuable insights into the rewards mechanism and help you make informed decisions regarding your staking activities.
When viewing the estimated reward rate on the Kiln dashboard, please keep in mind that it represents the average backward-looking rate of all Kiln validators over the past 30 days. It is important to note that staking rewards are not earned in a linear fashion on a daily, weekly, or monthly basis.
The rewards earned by your validator will vary from month to month, and it may take time for your validator to have more opportunities to participate in the network's validation process, resulting in increased reward potential. Over time, the reward rate tends to smooth out, and after a year, you can expect your validator's actual rewards rate to be closer to the network average.
Understanding the dynamics of staking rewards and their fluctuating nature will help you manage your expectations and make more informed decisions as a staker.
Are my rewards automatically sent to my wallet?
No, you need to claim your rewards from the Kiln Enzyme smart contract.
What are 'Total Rewards' and 'Claimable Rewards' and why are they different?
Total: This refers to the overall sum of rewards earned by your validator from both the consensus layer and the execution layer since the beginning of your staking journey. Claimable: These are the rewards that are currently available for you to claim. Execution layer rewards can be claimed immediately, while consensus layer rewards are automatically transferred to the Enzyme/Kiln smart contract approximately every five days. Once in the smart contract, you can proceed to claim them. NOTE: execution layer rewards are readily accessible, whereas consensus layer rewards undergo an automated skimming / withdrawal process before becoming claimable. This can take up to 5 days.
Withdrawing / Claiming Rewards
Who can withdraw my staked ETH?
It is crucial to emphasize that only the wallet used for the initial deposit can be utilized to withdraw your stake or claim your rewards from the Kiln smart contract.
As a non-custodial staking service, neither Kiln nor any other entity has access to your staked ETH. It is therefore imperative that you maintain control over your wallet and take precautions to prevent any loss or compromise of access. By ensuring the security and ownership of your wallet, you retain complete control over your staked assets and the ability to manage your rewards effectively.
How do I withdraw or claim my available rewards?
Here’s a tutorial showing how to withdraw rewards from Enzyme.
To claim your rewards in the Kiln app, follow these steps:
Open the Kiln app and navigate to the 'Rewards' section.
Select the validators from which you want to claim the rewards.
Click on the 'Claim Available Rewards' button.
Connect your wallet to approve the transaction.
Once the transaction is confirmed, you will be able to see your claimed rewards in your wallet.
Pro Tip: To optimize gas fees, it is recommended to claim rewards infrequently and bundle multiple validators into a single transaction if you have multiple validators. This can help reduce the overall transaction costs.
Why am I seeing withdrawals from my validator? I did not initiate them!
Since the Shapella upgrade on April 12th, the Ethereum protocol has introduced an automated process known as "skimming" for validator balances exceeding 32 ETH.
This process occurs regularly and typically takes around 5 days to complete across the entire network. During this skimming process, the rewards are transferred to the address held by the Kiln Staking Smart Contract, where they can be claimed by the wallet that originally staked.
To view and claim your rewards, simply open the Kiln app in Enzyme and navigate to the "Rewards" section. From there, you will be able to see the accumulated rewards and proceed with the claiming process.
I do not recognise the withdrawal address on my validator?
The withdrawal address is a smart contract managed by the Enzyme staking smart contract. Only you, the wallet from where you deposited, can claim and withdraw the rewards from the smart contract. When you claim the rewards they will be withdrawn to your wallet, and a commission (share of your claimed rewards) will be sent automatically to be split between Kiln and Enzyme.
Unstaking and Validator Exits
How long does it take to fully withdrawal my 32 ETH once I unstake?
You can see an estimate of the full process here by scrolling down to 'exit' and ‘withdrawal' queue length. The total time of both queues is the most accurate estimate.
Can I unstake or exit my validator whilst it is still in the entry queue?
No, you can only request a validator exit once it has been processed and becomes active. NOTE: this is not a restriction imposed by Kiln, but it is a function of the protocol.
How do I perform a full withdrawal (unstake) and exit my validator?
Here’s a tutorial showing how to exit your validator from Enzyme.
In the Kiln app, go to ‘Rewards’ to view all of your validators then select all validators that you want to exit (one or more).
Select ‘request exit’, and approve the transaction on your wallet. Once the transaction has been confirmed your validator will enter the protocol exit queue. This may take up to 48hrs before joining the queue. See detailed breakdown of the full process in the following FAQ.
What happens when I initiate a full withdrawal (unstake) and request a validator exit? How do I get my 32 ETH back?
This is a multi-step process that is a core function of the Ethereum protocol and cannot be influenced by Kiln, Enzyme or any other node operator.
There are three main steps to the process: validator exit, validator balance is withdrawable, and automated withdrawal of balance. All steps involve queues and waiting times that are automatically managed by the Ethereum protocol. Validator Exit
Choose your validator in the Kiln app, and select "Request Exit". The status will change to 'Exit Requested', waiting to be processed by Kiln (up to 48hrs).
Once processed, validator will join the validator exit queue. The status will change to 'Exiting' and waits to be processed by the protocol. It will continue validating and earning rewards until fully exited. NOTE: Processing time depends on the number of other validators exiting.
Validator is processed and is removed from the active set. The status will change to 'Exited'. Validator stops participating in the network and no longer receives rewards.
Balance is 'withdrawable'
Validator then enters a queue to become 'withdrawable'
Validator is processed by the protocol and the status changes to 'withdrawable'.
Validator / ETH Withdrawal
The balance of 32 ETH + outstanding rewards is now eligible to be withdrawn via the automated protocol via the 'validator sweep' (skimming) process.
Once the "validator sweep" reaches your validator, your balance will be fully withdrawn to the Kiln smart contract. NOTE: This could take 5 days or more, depending on where the automated process is. It processes all validators in order, based on index number, with only a small amount processed every epoch. Find your validator here and view 'withdrawals' for an estimate. example this example shows the withdrawal of 32.003087 ETH will occur in about 2 days 10 hrs
Once processed, the balance is sent to the Kiln/Enzyme smart contract ready for you to claim.
Claim rewards
Open the Kiln app, ‘claimable rewards’ will update to include the balance
Claim your rewards as described above in the FAQ.
NOTE: at all times throughout this process you can click through to your validator via the Kiln dashboard (or view directly at https://beaconcha.in/ and searching for your validator) to see more details on timing, queue position, and where it is in the entire process.
Kiln, nor Enzyme, can influence the automated protocol process or queue.
I have requested an exit but my validator is still active and receiving rewards?
This is expected. Your validator continues to participate on the network and receives rewards until it is fully exited.
I have another question
If your issue persists, please contact our support team, and we will get back to you as soon as possible.
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