Ethereum 2.0: The secrets of staking!

We are D-8 from the Ethereum Merge, the long-awaited event by the crypto community. What are Ethereum merger enthusiasts hoping for? The migration of blockchain into the Proof-of-Stake (PoS), among others. But many hope that the Merge will bring a boost to the bear market. Otherwise, its advent implies a good dose of preparation for the stakers. How can they succeed stacking of Ethereum post-Merge?

Stacking ETH 2.0, quesaco?

First, it should be noted that the Ethereum team does not like the term “ETH 2.0” too much. Instead, it prefers to speak of “ consensus layer (or consensus layer), referring to a network upgrade and not the construction of a new network from scratch. The initial version of Ethereum being baptized ” execution layer (or layer of execution), the lair of smart contracts and network rules.

The Merge derives its raison d’être from an observation of overload of the Ethereum network. The latter lists a large number of projects related to NFTs, DeFi, dApps, etc.

Consequence: the gas costs in the Ethereum blockchain exceed the fair measure.

The planned Ethereum Fusion promises several benefits like improved network efficiency, speed, security, and scalability, as well as reducing the amount of energy needed for computations. As a corollary, it will be able to process more transactions per second and adapt to several use cases. Note that at this time, Ethereum only allows 15 transactions per second. After the Merge, this number will be revised to 100,000.

But it should also not be forgotten that cryptocurrency miners doubt their future after the Merge. This migration is indeed the end of the process of mining current of Ethereum.

Cumulative total ETH staked over time – Source: Dune

What about Ethereum stacking

the Proof-of-Stake is a method promoting distributed consensus, guaranteeing the security of the blockchain and the creation of new blocks. We call staking the process for selecting validators to carry out these responsibilities. To these have been given the name ” stakers “.

To become a staker on Ethereum, or more precisely to be able to add blocks to the Beacon chain, you must invest at least 32 ETH. This is called “putting”. The stake is necessary to motivate the staker not to disconnect or engage in deliberate collusion.

Nevertheless, it is favored by Ethereum. In particular, he will be granted passive income which can go up to 1/8 of the basic reward, as a “proponent” and 7/8 as a “certificate”, according to Cointelegraph. Of course, the earnings of stakers will depend on the total amount of ETH and the means deployed to staker this cryptocurrency.

The other privilege of the staker lies in the possibility of appointing another user to carry out the validation operations on his behalf.

How to stake Ethereum?

In general, the staking of Ethereum must go through the services of ” pooled staking like Lido, Rocket Pool, StaFi, StakeWise… On Lido, it is possible to have an annual return of 3.9%, according to CoinVantage. With a reserve of 4 million ETH, Lido will reward stakers with stETH tokens and promises to only charge 10% of the rewards collected.

In addition, we should also note the possibility of staker ether on the main crypto exchanges such as Coinbase, Binance, eToro, Okex or Huobi Global.

By going to Coinbase, for example, the staker has an interest in creating an account in order to authenticate his identity “for tax purposes”. Subsequently, the latter is invited to buy ETH tokens, the condition sine qua non for this activity.

Then, the staker must go through the “registration on the waiting list” box before making the staking well said.

Please note that no withdrawal of staked ETH rewards will be allowed before the Shanghai update. The latter being planned after the Merge of September 15.

Currently, there are approximately 13.39 million stacked ETH, or 11% of the total Ether supply in circulation. But it is to be expected that the staking attracts many investors right after the Merge. Otherwise, the staking presents itself as an investment that is more suitable for hodlers than for those who tend to sell at the bottom.

Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of newsletter daily and weekly so you don’t miss any of the essential!

Similar Posts