Staking Ethereum

Ways to obtain Ethereum through staking Ethereum, are developing by day. We will point out several staking methods in this article. Since Ethereum has improved its blockchain to Ethereum 2.0, the transaction costs have reduced significantly. This improvement, changed the used transaction validation method in Ethereum blockchain, from Proof of Work to Proof of Stake.

In Ethereum 2.0, users who have at least 32 Ethers, can participate in the transaction validation process in this network. 32 Ethers is a lot of money for most users of Ethereum. Therefore several methods such as Staking pools and Centralized exchanges have been proposed to help these people take part in the transaction validation process without staking that much Ether. Some of these methods are introduced below:

One way to stake Ether is Lido. Using Lido, investors are allowed to hold a certain amount of Ether and earn extra tokens. Several staking protocols such as Lido itself, allow investors to earn extra tokens without blocking their investment. In Lido, there is no minimum deposit, and the annual percentage return (APR) is currently about 5.4%. The earned tokens can be freely transferred anytime.

According to current data, Lido is the largest Ethereum staking pool, and the 11th largest DeFi. Thanks to Anchor protocol’s innovation for bETH (a tokeniz staked ETH), Lido liquidity features are improving by day. This feature allows investors to obtain UST in return for staking Ethereum as well as receiving a reward for mining liquidity.

StakeWise is another Ethereum 2.0 staking service, which helps investors to reach the highest efficiency, by combining staking, yield farming and low fees. Investors can receive sETH2 for staking at StakeWise smart contract. And the staking reward will be payed by rETH2. Both rETH2 and sETH2 can be exchanged to Ether with 1:1 exchange rate. These tokens could also be easily transferred to any wallet and exchanged with other tokens. This service allows investors to access their staked assets, and also earn significant rewards in return.

StakeWise allows investors to stake Ethereum with as low as 0.001 Ethers. Larger holders who have more than 32 Ethers can use the solo StakeWise to take part in the transaction validation process in the Ethereum 2.0 blockchain. The current APR at StakeWise staking protocol is 5.64%. 10% commission is issued to earned rewards through StakeWise pool, while StakeWise solo members receive 10 Dai for each validation per month.

For those who have no interest in DeFi systems, several centralized exchanges offer Ethereum 2.0 staking services. Coinbase and Kraken, which are the second and fourth largest crypto exchanges in the world, are the leading choices for United States users. The major problem of staking at centralized exchanges is that, investors have no access to their tokens, until the Ethereum 2.0 blockchain is completely set up. Investors can neither trade nor transfer any staked amount at centralized exchanges, until the Ethereum 2.0 project is done.

Kraken currently offers 5% to 7% annual percentage return according to Ethereum protocol rules. On the other hand, Coinbase offers 5% APR, after deducting 25% commission. This is while neither Kraken nor Coinbase offer no supports in Ethereum staking. However, Coinbase have recently stated that it would compensate in case of any corruptions regarding the transaction validation process.

Generally the most appealing staking options for Ethereum holders, offer 5% to 7% APR, after deducting at least 10% to 25% commission. In comparison to below 1% annual return offered by most banks, Ethereum staking seems to be a good alternative for cryptocurrency fans, who want to earn a couple of extra tokens.

If you are determined to obtain Ethereum or any other cryptocurrency such as Bitcoin, LiteCoin, DogeCoin, etc, you can always buy and hold them at exchanges or trade them in brokers. Aron Groups broker offers several financial services, allowing investors to trade cryptocurrencies any time of the day, with the lowest commission and spread possible.

Written by: Mohsen Mohseni (Aron Groups).