This guide will explain all your need to know when it comes to Ethereum staking. Staking Ethereum provides benefits such as being able to earn passive rewards in Ethereum and helping to maintain the Ethereum network using delegated tokens.
Ethereum staking can be done in a variety of places, including crypto exchanges, third party staking platforms, and also Ethereum’s own website. There are multiple avenues to stake Ethereum and earn varying yields on the asset.
You should then consider where you’d like to delegate your tokens, how long for, and your ideal APY (annual percentage yield) rate. The APY percentage will be the rate of return on investment. This guide will explain all you need to know about Ethereum staking.
Staking involves storing crypto assets in an application that will use those assets in exchange for rewards. Staked crypto-assets can contribute to the validation of transactions on a blockchain. The more ETH you stake, and the longer you stake it for, the more rewards you will earn.
Sign up for a cryptocurrency exchange that offers staking capabilities. You can use our list of recommended crypto exchanges below to find an exchange that offers staking. After signing up, deposit some money into your account. This can be done with a credit or debit card, or by bank transfer. Then swap your deposited money for Ethereum.
Choose a staking lock up that appeals to you the most. Locked staking periods vary but are usually 30 days or more. Often, when locked, you are unable to access your funds. If access is important to you, choose flexible staking if available but bear in mind that the APY will usually be lower. Some crypto exchanges and brokers are currently offering Ethereum 2.0 staking in anticipation of Ethereum’s 2.0 upgrade. Yields vary between trading platforms, so it's best to scope out the best deal before delegating your tokens.
Unless you choose flexible Ethereum staking, as mentioned above, ETH 2.0 staking requires investors to keep their Ethereum staked until ETH2’s shard chains are implemented. Shard chains will break the Ethereum network up into smaller chunks so more data can be processed. There is currently no exact date for when shard chains will be deployed, so it's best to stake only if you don’t need those funds for a long period of time.
Whenever you’re ready to stake, use our list of recommended partners below to find a suitable staking platform for your tokens. You can also stake Ethereum on decentralised finance (DeFi) platforms. DeFi staking platforms often appear attractive as they offer extremely high APY yields, but there is the risk that they are not audited correctly, if at all, and there’s nobody to turn to if something goes wrong.
Many people who are unfamiliar with DeFi—and even some who are—prefer to stake their assets on centralised crypto exchanges where third party risk is reduced and unstaking fees low. Take a look at some of the recommended exchanges below where you can get ETH and start earning a yield through staking.
Choosing the right staking platform is important when it comes to earning rewards and security. When looking for a staking platform, you should always take note of the staking rewards on offer and how often they’re subject to change. Usually, the more stakers there are, the lower the percentage yield will be. When you stake, you will often notice that yields start high and get lower as more people take advantage of the offer.
The security of the staking platform is also important since many staking platforms can be prone to exploits where outsiders maliciously steal staked funds. Finding a reputable and audited staking platform should be one of your highest priorities.
Another thing to keep in mind is how much of one coin you can stake. Some platforms have a limit on the number of coins you can delegate but sometimes there are no limits.
Because staking rewards fluctuate it would be misleading to suggest that there is anyone place to go for earning the highest rewards. But there are plenty of reputable platforms that offer comparably competitive yields. Below are some recommended places to stake and buy Ethereum. Their yields vary, so go through each of the platforms until you find one that you like keeping in mind the lock-up times, staking rules for that specific platform, and how well you trust the site.
Ethereum staking is a good way to put any holdings you have to work. Ethereum is also considered one of the safest and most robust cryptos around with a solid roadmap and assured future. If you believe in the project and in the team behind it, Ethereum is worthwhile as a long term investment. Being only second to Bitcoin in terms of market capitalisation, it also benefits from having greater public visibility than any other cryptocurrency there is.
Because of its popularity, many exchanges offer Ethereum staking. One thing to be mindful of, however, are the platform's notoriously high gas fees. These catch many unsuspecting investors unaware and these fees are the reason many, at least for now, have moved to other platforms such as Solana.
If you’re particularly bullish on Ethereum, it is possible to become an Ethereum node operator, which could prove lucrative. But the amount of ETH required to get started will run into more than $100k, so you will need to be well capitalised before you think about starting.
How long you’d like to stake your Ethereum will be up to you. If you’re in for the long term, then ETH 2.0 staking could be for you but be warned that you’ll only be able to unstake and claim your rewards after the release of ETH2’s shard chains. If you’d like the ability to unstake whenever you want then flexible staking contracts will be for you. Some crypto exchanges offer flexible Ethereum staking, and yields will vary between each platform so prior research for the best staking platform for you will help when making a decision.
Staking can come with risks depending on where users are staking their tokens. Vulnerable staking platforms are prone to hackers that can infiltrate the staking application and drain users’ funds. Most platforms that offer Ethereum staking have been audited multiple times and are hosted on secure exchanges.
Staking Ethereum is worth it if you believe in the project and that the price of Ethereum will go up over time. As one of the first blockchain projects, second only to Bitcoin, Ethereum staking can be highly profitable, though being aware of the risks associated with volatility and counterparty risk is vital to understand before you start.
The amount of Ethereum that you can earn through staking will depend wholly on how much Ethereum you have deposited for staking and the APY rate. To earn a high yield, it’s best to look for staking platforms that offer generous APY rates and deposit enough Ethereum so that the APY returns aren’t too small.
Ethereum can be staked on any staking platform that offers Ethereum staking capabilities. You can find a list of verified staking services on the official Ethereum website along with their contact details, Twitter profiles, Discord’s and Telegram groups. Most crypto exchanges offer Ethereum staking options with flexible lock ups (see the table above).
Decentralised staking (DeFi) platforms that offer Ethereum staking can be found across the internet. When using DeFi products it's important to verify how safe the application is and who’s behind it. Your funds will be at risk if you use a malicious DeFi platform that goes down.
Taxes and staking rewards are a bit of a grey area, no matter where you’re located. Most countries view any form of interest as income, and therefore it may be taxable by the government. The best way to find out about your country's crypto tax laws for crypto is by researching your countries tax laws and crypto tax help sites such as Koinly.
DeFi staking platforms do not require users to provide identification or personal information to stake. Crypto exchanges will require personal identification so you can create an account on their sites. This is often termed KYC—know your customer—and is a similar process to opening a bank account.
Almost any non-custodial wallet can be connected to a DeFi staking platform. Metamask, TrustWallet and Coinbase Wallet are some popular crypto self-custodial wallets that can be used to connect and interact with DeFi staking platforms and other DeFi applications.
When you unstake, all staking rewards earned will be deposited into your trading account on the exchange you used along with the principal amount of ETH staked. Remember, if the price of ETH has gone down, it’s possible you will have less than when you started.