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27 changes: 27 additions & 0 deletions docs/smooth/deep-dive-into-smooth/consolidations.md
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# Consolidations

Since the [Pectra](https://ethereum.org/en/history/#pectra) update on May 7, 2025, validators can stake up to 2048 ETH. Instead of having to manage multiple 32 ETH validators, users can now choose to stake an arbitrary amount of ETH in a single validator.

To make a validator able to stake more than 32 ETH, users will have to **Upgrade the validator's withdrawal credentials**: From 0x01 to 0x02.

It is also possible to **Consolidate** multiple 32 ETH validators into a single validator with a higher stake. This requires an extra step: a **consolidation**. In a consolidation, two validators are merged into a single one. The _"source"_ validator will exit the chain, transferring its stake to the _"target"_ validator.

Both these steps can be done through the [Staking Launchpad](https://launchpad.ethereum.org/en/) interface.

## How Smooth manages consolidations

Since the _source_ validator will exit the chain, it will not be able to propose blocks anymore and therefore convert its Smooth's _pending rewards_ into _accumulated rewards_. Effectively losing them.

To avoid this, Smooth will automatically detect when a validator is the source of a consolidation. Upon doing so, it will transfer all the _pending rewards_ from the source validator to the target validator. This way, no pending rewards will be lost during the consolidation process. Smooth will also remove the source validator from the pool.

## As a Smooth user, what do I need to do?

Consolidation is not required—Smooth will continue to work normally even if you don’t consolidate your validators.

However, if you want to consolidate any of your validators, we recommend upgrading your validator’s withdrawal credentials to 0x02 and performing the consolidation through the [Staking Launchpad](https://launchpad.ethereum.org/en/) interface. You will not need to do anything else; Smooth will take care of the rest.

:::danger
DO NOT manually unsubscribe any validator before consolidating it. Manually unsubscribing a validator will remove its pending rewards and Smooth will not be able to transfer them to the target validator.
:::

A consolidation may take a few days to complete. Once your source validator exits the chain, Smooth will transfer the pending rewards to the target validator. We recommend checking [Smooth's dashboard](https://smooth.dappnode.io/dashboard) to see if the transfer was successful.
13 changes: 13 additions & 0 deletions docs/smooth/deep-dive-into-smooth/rewards.md
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Expand Up @@ -15,6 +15,19 @@ There are 2 main sources of rewards in Smooth:

When a validator has an active subscription to the pool (`Active` or `YellowCard` state) it is eligible for rewards, meaning that it will receive a given share of each reward that is sent to the pool. Validators in `RedCard` are considered subscribed, but don't earn rewards until they become active again.

<div align="center"><strong>
Validator Share = (Validator Effective Balance / Total Effective Balance) × Rewards to Distribute
</strong></div>

Where:
- **Validator Effective Balance**: The staked amount of ETH of the validator.
- **Total Effective Balance**: The sum of all the effective balances of eligible validators in the pool (in `Active` or `YellowCard` state).
- **Rewards to Distribute**: The amount of rewards that entered the pool. Normally, these come from block proposals or donations.

:::info
Since the Pectra Fork on May 7, 2025 (10:05:11 UTC), validators can stake up to 2,048 ETH. The more ETH a validator stakes, the more frequently they are expected to be selected to propose blocks. In Smooth, this directly affects how rewards are distributed: for example, a validator staking 64 ETH will earn twice as much as one staking 32 ETH. This applies to all types of rewards, including donations.
:::

Smooth's distributes rewards to the validators as `Pending Rewards`. These are rewards that are not _consolidated_ yet, meaning that they belong to the validator but they can not be claimed yet, until a valid block proposal is sent to [Smooth](https://smooth.dappnode.io/) by that validator.

Later on, when a validator sends a valid block proposal to [Smooth](https://smooth.dappnode.io/), all its `Pending Rewards` are transformed into `Accumulated Rewards`. These rewards are consolidated and can be claimed by the validator.
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5 changes: 5 additions & 0 deletions sidebars.js
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Expand Up @@ -657,6 +657,11 @@ const sidebars = {
label: "Avoid proposing Vanilla Blocks",
id: "smooth/deep-dive-into-smooth/vanilla-blocks",
},
{
type: "doc",
label: "Validator Consolidations In Smooth",
id: "smooth/deep-dive-into-smooth/consolidations",
},
],
},
{
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