[ruuda]

> You get the same APY irrespectively of your size

On-chain, yes. But there is an off-chain cost to operating the validators, and there is economy of scale there. You can run many 32-ETH validators on a single machine using almost the same resources as running a single one, so the amortized cost of the hardware goes down. And when you do need to expand to multiple machines, the same applies; you don’t need 10× the people to manage 10× the machines. Of course, you can pay somebody to operate the validator for you, and those parties benefit from economy of scale.

[pa7x1]

Indeed. So let me flesh it out a bit more. You can run a validator using 100W (conservative figure) of energy and an Intel NUC with 2 TiB SSD (you can even run it on a Raspberry Pi but no need to be too greedy in HW resources).

That's 876 kWh in a year and 1000 $ in HW. Energy costs vary from place to place but let's pick 0,2 $ / kWh. Which results in 175 $/year in energy. The computer can easily last you 5 years if not more, so 200 $ per year. Let's add internet costs too. 30$ x 12 = 360 $ / year.

Those are the operational costs. Once you have 32 ETH this is pretty negligible.

[ruuda]

There is also the people cost. If you’re a hobbyist you could argue those are zero or there is only some opportunity cost. But for a professional validator, SRE salaries dwarf the hardware cost.

[pa7x1]

True, but these are costs that affect large scale operators so they are not a barrier to entry. If anything they highlight that in some ways a small hobbyist is positioned to be as profitable as a large scale operator.

[ruuda]

Yeah, that's true.