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Ethereum Staking: How to Stake Ethereum

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The staking on ETH 2.0 has officially started on December 1st, along with the rewards on deposits. The return is related to the number of participants, as everything that is generated by the overall rewards is divided between all nodes that are part of the network, in proportion to the amount staked by each.

As the total amount staked in the network increases, the percentage of return decreases, this is because the rewards are divided between more participants.

How to do it?

The main method for staking is to follow the official guide on the Ethereum website, with 32 ETH it is possible to create a full validator node, the 32 ETH staked must be complemented by a hardware system capable of running an ETH 2.0 client, which is a local copy of the blockchain.

Note that the node must be able to guarantee an adequate performance, otherwise there is a risk of running into two unpleasant situations:

  • having the rewards penalized
  • slashing, i.e. part of the Ether is taken away as a penalty.

A useful system to discourage “incorrect” nodes that do not contribute to the functioning of Ethereum.

The second option, with less than 32 ETH, is to become part of a staking pool.

Staking as a service

As we have already mentioned, to do staking, besides locking ETH, we need the technical know-how and high-performance systems able to guarantee a consistent operation of the node.

Not everyone is able to meet these criteria; the solution is found in “staking as a service” platforms, which provide all the technical support for staking.

In addition to this support (which is not trivial), these systems are useful for those who, while unable to stake 32 ETH, still want to be involved in staking, enabled by staking pools which aggregate individual stakes until the necessary amount of 32 ETH is reached.

Today, there are various solutions, suitable for the most diverse needs:

  • “hybrid” systems that allow the management of funds with “non-custodial wallets” such as MetaMask, and which can interface with dApps and smart contracts
  • centralized systems, such as the solution offered by Binance

Let’s look at the different solutions in more detail…

What options?

Staking on Ethereum offers different solutions, ranging from the “classic” one, building our own full validator node, to a series of services with different solutions, including Stkr and RocketPool and centralized services such as Binance.

Stkr

Stkr is created by the Ankr team, Ankr is a platform that allows having nodes on different blockchains without the need for special technical skills or hardware, for a monthly fee.

Thanks to Ankr it is possible to stake with Stkr, a dedicated service that offers the possibility to participate in micro pools starting from a minimum of 0.5 ETH to a maximum of 1000 ETH.

Security is guaranteed by interfacing with our MetaMask wallet, which means that we are in control of the tokens and operations through our private key.

Furthermore, as a staker we will not run any risk of slashing as the node is managed by the provider. You can become a provider by setting up an ETH 2.0 node and with a minimum insurance fee of 4 ETH used to prevent cases of slashing, this will result in greater rewards for increased risks.

Rocket Pool

Rocket Pool is a service designed for staking on Ethereum, it is a decentralized and distributed infrastructure. The network allows any individual, company, DeFi dApp and exchange to offer staking services to their users.

By removing the need to maintain sophisticated infrastructures, an open source smart contract system and a customized node software makes the service flexible and adaptable to multiple realities.

Users who deposit ETH will receive rETH, which is a ‘tokenized’ representation of the staked deposit in the network.

Born in Australia in 2016, it is among the solutions with “the most experience” designed to allow participants with less than 32 ETH to combine funds for staking.

Binance staking

Binance launched its staking service on December 2nd, users who participate will receive the BETH token in a 1 ETH = 1 BETH ratio, as well as rewards that will be distributed daily and always in BETH.

BETH tokenizes the amount of ETH in the pool and will allow them to be redeemed as soon as the Ethereum 2.0 phase is over.

As far as the distribution of the BETH token is concerned, it will only be made available on Binance’s wallets and enabled for withdrawal and trading in January.

Binance will cover all operational expenses of the validator for users, bear all expenses for possible penalties and all staking rewards will be distributed to users.

Minimum stake amount is 0.0001 ETH.

A similar solution is expected from the Coinbase exchange.

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