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When validators fail to perform their ascribed duties (e.g. due to downtime–being offline), besides in many cases accruing penalties, they are also subject to opportunity cost–i.e. what they could have earned had they performed their duties appropriately. While the idea of missed rewards was fairly straightforward pre-Merge, with the introduction of the Execution Layer rewards and out-of-protocol PBS in the mix, not only has the opportunity cost of missed proposals become orders of magnitude higher, but also the semantics of what constitutes a missed reward have become equally more complex. Producing a transparent, fair, and generally accepted methodology for missed rewards is a crucial step in unlocking new products for Node Operators (e.g. Nexus Mutual’s slashing and downtime cover). In addition, for these products to proliferate in a way that treats those that benefit from them the most fairly, it is important to gather input and harden the methodologies early on.
We are approaching crafting this methodology with an iterative mindset and have yet to enshrine this to the front-end and API. We want to hear from the community on which approach is the most realistic, representative, and fair.Join the conversation on Discord.

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Context

As hinted in the introduction, we look at missed rewards in two tracks: Consensus and Execution layer missed proposer rewards. The two tracks are really the heart of the methodology/calculation. To calculate total missed rewards, we simply proceed as follows:
total_missed_rewards=consensus_missed_rewards+execution_missed_rewardstotal\_missed\_rewards = consensus\_missed\_rewards + execution\_missed\_rewards
This is computed at the validator index level, and then aggregated upwards to different groupings as with many other metrics that Rated hosts. In the following section, we dive deeper into these components.

Consensus missed rewards computation

Execution missed rewards computation

We are referring to Consensus and Execution Layer as CL and EL respectively hereon. Also every mention to missed rewards in this section specifically refers to missed proposal rewards.