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Ethereum Validator Returns
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(in eth)IncomeReferenceNotes
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 % of ETH oustanding staked22%aAssumption (source: Dune)
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 Current ETH tokens oustanding120,198,958b
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ETH staked26,768,308a * b = c
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Daily new token issuance to validators2,356dSliding scale calculated based on the amount of eth staked
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Annual tokens issued to validators860,524d * 365 = e
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Validator staking yield3.2%e / c = fReturn validators get on their staked eth
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Estimated daily total fees3,350gAssumption (source: Etherscan)
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Fees paid to validators498g * (1-burn rate) = hValidators get the fees that are not used to burn eth
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Annual fees paid to validators181,789h * 365 = i
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Validator earnings yield0.7%i / c = j
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Estimated avg daily MEV earned by validators800kAssumption (source: Flashbots MEV Explorer)
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Annual MEV earned292,000k * 365 = l
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MEV yield1.1%l / b
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Validator total annual earnings1,334,313e + i + l = mSum of token issuance and validators share of fees
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Total validator yield5.0%m / c = nTotal validator earnings divided by eth staked
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Gross ETH burned annually-1,041,798g * burn rate * 365 = o
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Annual tokens issued to validators860,524e
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Net ETH issued/(burned) annually-181,274o + e = pNet amount of eth added or removed from existing amount
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ETH inflation/(deflation) annually-0.2%p / b = qRate at which the amount of eth increases or decreases
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Total validator returns:
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Total validator yield + in/(deflation)5.1%n - q = r
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 Implied earnings multiple19.5x1 / r
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Justin Drake's model:
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scenarios
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lean optimisticunitsource
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assumptions (at merge)
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merge date1 August 2022
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ETH staked14.0METHhttps://beaconcha.in/charts/staked_ether
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average daily EVM fees (without Flashbots)9.0KETHhttps://etherscan.io/chart/transactionfee
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average daily Flashbots bribes0ETHhttps://dashboard.flashbots.net/miners
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calculations (at merge)
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max daily PoS issuance1.70KETH
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max yearly PoS issuance622,324.268ETH
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yearly fee rewards.5METH
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staking APR (issuance only)4.4%
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staking APR (issuance + fees)7.9%
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peak supply119.66METH
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assumptions (long-term)
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ETH staked30METH
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average daily EVM fees (without MEV bribes)15KETH
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average daily MEV out-of-band bribes2.0KETH
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calculations (long-term)
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yearly fee burn4.5METH
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max daily PoS issuance4.0KETH
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max yearly PoS issuance911KETH
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staking APR (issuance only)3.0%
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staking APR (issuance + fees)8.8%
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years until 100M ETH supply5.5years
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net yearly sell pressure reduction8.6METH
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parameterunit
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reference date
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supply at reference dateETHhttps://etherscan.io/chart/ethersupplygrowth
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average daily PoW issuanceETH/dayhttps://etherscan.io/chart/blockreward
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burn since EIP-1559ETHhttps://ultrasound.money (observed 23 April 2022 at 18:52 UTC)
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tips since EIP-1559ETHobserved 23 April 2022 at 18:52 UTC
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fee burn percentage (without Flashbots)calculated based on recent fee market data, not taking into account Flashbots
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Flashbots bribes since EIP-1559ETHhttps://dashboard.flashbots.net/miners (approximate)
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fee burn percentage (with Flashbots)calculated based on recent fee market data, taking into account Flashbots
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PoW profit marginestimated
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PoS profit marginestimated
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constantunit
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SECONDS_PER_SLOTseconds
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SLOTS_PER_EPOCHslots
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EPOCHS_PER_DAY
epochs
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DAYS_PER_YEAR
days
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EPOCHS_PER_YEARepochs
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GWEI_PER_ETHGwei
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BASE_REWARD_FACTOR
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see beacon chain spec here
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