Talk about the latest buzz in the crypto tinsel town and all eyes are on the upcoming Merge upgrade for Ethereum. A part of the ambitious Beacon Chain upgrade, the Merge launch is designed to make the ETH network more scalable, more energy-efficient, and more eco-friendly. You don’t need further reasons to gather why experts have predicted an awe-inspiring 400% growth for Ethereum in the final lap of 2022. Do you have plans to invest in and HODL Ethereum? While HODL is particularly great for excellent ROI on coins like Ethereum, how about an avenue for passive income with the same ETH coins that you are planning to HODL? Well, here comes the concept of Ethereum staking.
Is it worth a shot?
Well, the post below sheds light on Ethereum staking, its prospective as well as risks to help you take an informed decision for staking in ETH.
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Why would you consider Ethereum staking?
Your experience or success with crypto staking depends largely on the coins you choose for staking. Experts have outlined 3 golden criteria to keep in mind before choosing a coin for staking-
- Strong fundamentals
- Practical real-life usability
- Sustainable future and excellent growth potential
Ethereum successfully fulfils all the 3 criteria mentioned above, thereby reinforcing great yield possibilities with Ethereum staking.
- The Ethereum ecosystem is backed by a highly knowledgeable and seasoned team of fintech and crypto experts. The network is constantly evolving and coming up with ambitious and game-changing upgrades like Merge.
- The 2nd largest cryptocurrency is not just the one of the most popular real-life payment options- rather, the Ethereum ecosystem serves as the hub of innovative DeFi apps and smart contracts projects. Ethereum is usually the most favorite blockchain for futuristic Web 3.0 projects like Metaverse and NFT. Also, ETH is the popular currency for the dramatically rising NFT marketplace- a major reason behind astronomical rise of ETH and eventually high yields with Ethereum staking.
- The Merge upgrade is designed to resolve the current problems faced by the Ethereum network to help it to adapt with the changing trends and demands of the futuristic blockchain and crypto market. The Merge upgrade will transcend the existing Ethereum network to ETH 2.0, upgrading the whole ecosystem to a Proof-of-Stake network. The ETH 2.0 will scale up the ETH TPS from 15 to 100k (expected), reduce energy consumption by at least 90%, reduce gas fees, and make the Ethereum blockchain more eco-friendly. Improved functionality and growth will drive in more demand for the coin and eventually better prospects for Ethereum staking.
In regard to APY, Ethereum staking is predicted to offer around 6% to 15% APY on average. Another group of experts have predicted that Ethereum staking is likely to reward stakers with 5% reward for each ETH they would stake.
What are the risks?
So, what are the risks of Ethereum staking?
Well, Ethereum staking will lock in your ETH coins for a certain period of time. Now, as per recent marker predictions, ETH is poised to cross the coveted $4k mark by the final course of 2022. Some experts have also predicted that ETH might reach $8k by the end of 2022. Such a high-growth scenario presents an excellent opportunity to enjoy incredible profit through Ethereum trading. But, if you lock in your coins for Ethereum staking, you won’t be able to withdraw them in between for trading.
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Making the most of Ethereum staking
Don’t let the risks mentioned above dissuade you from taking part in a high-yield area like Ethereum staking.
There are two solutions to the problem mentioned above-
One, do not put all your ETH coins (that you own) into the Ethereum staking platform. The minimum required amount for Ethereum staking is 32 ETH. So, you can just put in the minimum amount and save the rest in your HODL investment. This way, a major share of your coins will be free for trading when the ETH price shoots to the moon in the coming months.
Another solution is to look for a top Ethereum staking platform that allows unstaking. The unstaking process enables stakers to withdraw a certain amount of locked-in coins as per their needs even before the staking period. But, it’s just to remind you that the unstaking process might take around a week- so, try to plan ahead.
Besides, some of the Ethereum staking platforms offer flexible staking facilities. As the name says, flexible staking allows withdrawal of coins before the end of the lock-in period. However, this particular staking option offers lesser reward compared to the locked staking option. But, once again, you can’t get everything in life- with flexible Ethereum staking, you at least have the option to utilize the locked coins for trading, if need be. On the bright side, the con of lesser reward with flexible Ethereum staking will be compensated by the excellent profits you will earn with Ethereum trading.
How to participate in Ethereum staking?
You can participate in Ethereum staking as a validator on Ethereum’s all-new Proof-of-Stake network. As a validator (if chosen), you will help to validate transaction data on fresh blocks before the block is added to the existing blockchain. If you can successfully validate the block data and help to update the blockchain, you will be rewarded with ETH coins.
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However, the easier way to participate in Ethereum staking is through the crypto exchanges that provide staking services. If you sign up as a staker with these platforms, all you would have to do is to deposit the minimal required amount of ETH coins for ETH staking. The exchange will take care of the rest of the process on your part. Almost all crypto exchanges that offer staking services accept Ethereum staking.
Then, you have online platforms that serve as Staking-As-A-Service providers. These portals are exclusively dedicated to staking of crypto coins, including Ethereum.
However, if you are unable to allot the required amount of 32 ETH for Ethereum staking at exchanges or other staking platforms, you can always sign up with staking pools. Look for larger pools with competitive staking reward history. Visit more staking crypto