If you are looking for places stake Ethereum 2.0 for an average investor. Don’t worry we have gathered a list of places for you in this blog post.
If Bitcoin is the New Gold, then Etherum is the new Diamond
To become a validator of etherum 2.0, one must lock in at least 32 eth into the network.
At the time of writing this article 32 eth cost more than 50,000 dollars, which is quite expensive for an average investor, Do not lose hope yet! There seems to be a way out.
Late last year, Vitalik Buterin CEO of Etherum announces the launching of Etherum 2.0, a project which has been in the works since 2014.
” The transitioning of Ethereum from proof of works to proof of Stake is to reduce extravagant gas fees, high cost of maintenance fee, electricity bills” – Vitalik Buterin
The success of this long-awaited new version of etherum that took 6 years to complete is a piece of good news for all crypto investors worldwide as a new opportunity to make more figures is presented.
There are various ways to invest in this promising network and earn rewards which include
- Run a client
- Find a bug
We would be discussing on staking and places to stake for an average investor in this article
For the sake of our readers who are new to this project, we will give s brief summary of how the network works.
What is etherum 2.0
This refers to a set of interconnected upgrades that will make etherum more scalable, more secure, and more sustainable – ethereum.org
The creation of ethereum 2.0 is to tackle the downsides of etherum such as high gas fees.
Ethereum 2.0 has three phases which can be seen in the image below with a brief explanation
The Ethereum 2.0 launch Roadmap
The Eth2.0 launch roadmap is extraordinarily important to the whole Ethereum community, as well as the validators or stakers.
As a staker, you’ll need to follow on and patiently wait no matter how long it takes to finally unstake your Ether holding.
Phase zero – Launch of the Beacon chain
On Gregorian calendar month, 2020, Ethereum core developers launched the Beacon chain upgrade,.
Phase one – The merge
This section can see the 2 network layers (Eth1 and Eth2) mix to make one layer that utilises staking as a consensual mechanism.
At this time, mining will be forced to stop then the staking kingdom will inevitably reign
Phase two– Shard chains
The last section will introduce shards joined together just like the blockchain to make shard chains.
In the context of Ethereum, shards can represent the whole Ethereum information split into sixty-four smaller databases.
Sharding helps unfold the load on the most Beacon chain, thereby increasing turnout.
With time, the Ethereum core developers hope to feature additional options to the shards to attain their meant measurability and dynamism of the network
What is Etherum 2.0 staking ?
Staking Eth is done by an investor who believes and seeks the growth of the etherum ecosystem.
In Etherum 2.0, Staking is the act of depositing or locking in at least 32 Eth to activate validator software.
As a validator, certain responsibilities will be weighted on you such as storing data, processing transactions and validating transaction, for the non-technical investor this may be challenging.
A validator can easily lose his staked Eth if found guilty by the network for performing a malicious action such as going offline and thereby failing to validate.
Due to these reasons, non-technical investors are advised to delegate the validator responsibility to an individual with technical knowledge, this process is known as Delegated Proof of staking (DPOS).
In DPOS, rather than investors becoming a validator, the responsibility will be delegated to an individual or group of people which In return take a fraction of the staking reward as service fees.
In order to ensure your Eth are in safe hands, DOS delegates are elected based on their reputation and transparency by the community of investors
Places to stake Eth 2.0 for an average investors
To get started with staking Eth with as low as 0.001 Eth, here are ways you can do that
With a pool, there is an opportunity to stake Less than 32 Eth.
Eth staking pool allows multiple Ethholders to collectively contribute to reaching the minimum staking entry-level 32 Eth.
Various companies are eager to shoulder the responsibility of the technical skills needed to run the validator software, so you need not to worry about staying online 24/7
Unlike running solo where you don’t have to split your staking reward, in staking pools a fraction of the staking reward percentage will be removed as service fees, the amount removed depends on the staking services provider. This explains why APY% varies from one provider to another.
Staking rewards are distributed to the pool members (Investors) in proportion to the shares of eth in which they contributed.
Some staking services have a limit on the minimum a month of eth to be deposited or contributed for example in Rocket pool, the minimum eth you can stake is 0.01.
Risk Involves in Staking pool
One of the downsides of staking your Eth in a pool is that it demands some level of trust from you, you have limited insight on how reliable and the effectiveness of the company is in performing their obligation.
In addition, Staking pool is prone to hack attacks
However, you can mitigate the risk if you do your own research and figure out a well reputable company
Nowadays some of the exchanges have begun to introduce the Etherum 2.0 Staking.
Staking on Exchanges is the easiest way to stake your Ethereum, they provide an easy interface to move your coin
One can finish the process in less than 10 minutes, all you need to do is
Create or use an existing account to
Deposit or purchase your Ethereum,
Look out for the staking option and click on it.
Follow the staking procedure which will take less than 3 minutes
Exchanges may charge a fee between 15% and 23% of the staking rewards as their services fees
Risks of staking your Etherum 2.0 via Exchange
The risk involved with staking eth 2.0 in the exchange include security concerns such as hacking since you will have to keep your eth online for a long period of time
One can minimize the risks by signing up with a well reputable exchange that is backed by an insurance company in case anything goes wrong,
A mobile wallet is a good option for staking etherum 2.0, similar to an exchange, one can start with it within a few minutes.
Download the app from google play store or the Apple app store.
As at the time of writing this post, you can stake with Guardano wallet, Myetherwallet and Atomic wallet
Risks in staking wallet
Mobile wallet, similar to Exchange they can be hacked but signing up with a well reputable wallet reduce the chances
Thing you should know before you start with Etherum 2.0 staking
Your Eth will be lock up for at least 2 years: for now it’s impossible for stakers to withdraw their staked Eth not until a future upgrade is done which will take 1-2 years.
This is after the first phase is complete and Eth 2.0 implementation is complete.
However, you can still spend your staked Eth, which will be discussed later in this post
APY Changes; APY is tied to the overall amounts of Eth staked in the network that means the higher the number of investors in the Eth blockchain the lower the APY percentage
Not get rich quick scheme: staking provides a decent way to earn passive income but it takes a lot of time to earn tons of money
How to reedemmed your stake coin
Just to be clear, you cannot withdraw your staked Eth but there is an alternative.
Most exchanges provide an opportunity to spend your staked coin by creating a token that is equivalent to eth for instance 1 Beth token equal 1 ETH.
For instance, when you stake your eth, binance gives you Beth token that is equivalent to amounts of staked Eth on 1:1 basics to keep using your locked assets for trading and withdrawals.
You can change Beth given to you back to Eth when the upgrades have been completed, then you’ll receive the amount of Eth equal to your current Beth holding
Three best staking pool to stake Etherum 2.0 for an average investor
Selection is based on pool reputation and review!
This is one of the popular pools out there that allows Eth holders to earn passively with a deposit of 0.001 Eth rather than the mandatory 32Eth.
Rocket pool is one of the first if not the first pool to start eth staking, it was founded by David Rugendyke in 2016.
Upon creating a profile in Rocket Pool, a user will receive a token called rETH, which acts as a tokenized staking deposit and the associated rewards.
This token can be used to trade or held as a reward.
This token can be used in Defi apps and is also compatible with Ethereum 2.0
Casper(one of the protocols of the ethereum network that enables the transformation of Pow to Pos) requires validators to be technically proficient at running an Ethereum node 24/7 and keeping that node online and secure.
Rocket Pool takes care of this part by offering simple interfaces.
Rocket Pool allows you to withdraw funds ahead of schedule time in native rETH tokens with a commission of 5%.
Rocket Pool undertakes the fulfilment of all interactions with Beacon chain contracts for the user.
The Rocket Pool uses a unique method called «chinking», which significantly reduces the storage risk by distributing one storage across a decentralized network C nodes.
The StakeWise Pool is regarded as a network of validators created and operated by StakeWise on behalf of ETH investors who have deposited into the Pool.
By staking within the StakeWise Pool, you’ll be able to participate within the ETH 2.0 staking and earn ETH rewards
Similar to Rocket pool you’ll receive liquid StakeWise tokens representing your staked asset which can be utilized in Defi protocols.
For providing this service, StakeWise takes a 10% commission on rewards that the Pool generates to catch up on the prices of developing, running, and maintaining the infrastructure and good contracts.
Ankr is designed as an ethereum 2.0 staking protocol which has proven to be a great success since its launch in late 2020
With the help of the great team, they went on to become number 1 validators on Binance smart chain (BSC) by voting power from its users
With Ankr micro pool , investors who are unable to invest 32 Eth are given the opportunity to perform Eth staking.
You can stake directly from their hot wallets such as Trustwallet, Metawallet etc
However, the minimum eth you are allowed to stake via Ankr micropool is 0.5 eth.
Three Exchanges to stake Etherum 2.0 for an average investor
Avoiding technical setup, reducing risks of having your stake slashed, or even reducing the risk of losing your coins to theft are benefits of staking your ethereum with Binance.
Binance is still one of the safest exchanges out.
All Ether staked on Binance is tokenised into ‘ BETH tokens’ which is issued to the stakers at a 1:1 ratio.
BETH stands for Beacon chain ethereum which serves as a temporary replacement of your staked eth available for trading.
The importance of holding the BETH tokens is that every holder of the token will need to present it as proof that they partake in the Eth staking when the staking lock-up period is over.
The BETH in your possession is equivalent to the amount of eth you staked and its essential to redeem your staked Eth.
However, if BETH is used, your staked eth coin will be given to you in equivalent to the amount of your BETH remaining after the eth lockup period is over
Kraken remains the most popular exchange in the whole crypto world not because they are one of the first to start, their commitment and hustling to be the first to introduce projects that are beneficial to their users stand them out.
With Kraken you can start staking ethereum with any amount. At the time of scripting, this article Kraken offer 5- 7% APY.
The process of staking on Kraken shouldn’t take 10 minutes and Kraken credits your account with your staking reward ( Eth2) when you complete a reward cycle although you can not withdraw or trade with it but can be seen on your dashboard.
The coinbase exchange recently join the list of exchanges that offers the ethereum 2.0 staking feature
“We have witnessed a huge rise in customers purchasing ether in recent months and so are delighted to be in a position to offer them staking rewards for this asset,”- marcus Hudges kraken manager for United kingdom
“We believe that, in simplifying staking, which is very complex to do individually, we can play a role in widening access to this key part of the cryptoeconomy,” Hughes added.
You need no minimum requirements to opt-in with this exchange and it offers about 7 % staking reward
Mobile wallet to stake Etherum 2.0 for an average investor
One of the few Mobile wallets, if not the only legit one that offers the option to stake lower than 32Eth.
Guardo wallet gives a staking reward of about 7% APY.
However, they charge 10 % for service fees which will be removed from your staking reward before crediting you
Guardo wallet provides you an option to trade even though your assest is locked up by issuing the GETH token which is 1:1 ratio to Eth
The minimum eth requirements is 0.1 eth
However there are other mobile wallets out there that offer Ethereum 2.0 staking but based on my experience I suggest you should stick with guardo wallet, if you want to stake your Eth with mobile wallet.