Ethereum staking is growing in popularity. With the rise of Ethereum 2.0, more people are showing interest than ever before. You have several choices when it comes to staking Ethereum, but you should take a few minutes to understand what staking is and whether it can be profitable before doing so.
Basics of Ethereum Staking
Simply put, crypto staking refers to holding or locking up your cryptocurrency in exchange for rewards.
Understanding Proof of Stake
Crypto staking became important with the Proof of Stake consensus mechanism. This was developed as an alternative to the resource-intensive mining that is part of a Proof of Work mechanism.
With Proof of Stake, you stake (or lock up) your cryptocurrency. Then, the crypto’s protocol picks one of the people whose crypto is locked up to validate the following block. They will receive rewards in exchange for validating the node. The more crypto you have, the better your chance of getting chosen.
Ethereum 2.0 and Staking
Because the Proof of Stake mechanism is so efficient, it makes blockchains more scalable. That has led to the upcoming/in-progress switch of Ethereum’s Proof of Work mechanism to a Proof of Stake. This is part of Ethereum 2.0.
In Ethereum 2.0, staking Ethereum specifically refers to depositing 32 ETH. This 32 ETH stake lets you activate validator software. You then process transactions, store data, and add new blocks. In return, you earn ETH as your Ethereum staking rewards.
Ethereum Staking Pools
As with staking for other cryptocurrencies, there are also Ethereum staking pools. These are communities where people who own Ethereum pool their resources and then split the profits. In the case of the 32 ETH minimum for Ethereum 2.0 staking, the pools offer an option for those who cannot meet the minimum requirements.
In any situation, Ethereum staking pools can help those who want more consistent Ethereum staking rewards and don’t mind if they are slightly smaller. After all, you are more likely to receive a reward than if you were to stake just your ETH because you will be part of a larger pool. But the rewards will be smaller because you will have to share them with all pool participants.
Alternatives to Traditional Ethereum Staking
If you aren’t sure about running a validator node but still want to get some of the Ethereum staking rewards, there are other options. Some platforms offer similar results by letting you essentially stake your crypto with them. You may also think of this as lending your crypto to them or investing it with them.
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With these platforms, you deposit your Ethereum into a designated account. The platform then uses it to make a profit via various methods. Some of the most common methods include arbitrage (or taking advantage of price differences in the market), trading, and crypto loans. In return, they give you a share of their profits. This can be a set percentage or a percentage that fluctuates based on how much they can earn.
You do not need to dedicate any computer resources to running a validator node but will still earn profits.
Does Staking Ethereum Cost Gas?
Because you do not complete any transactions yourself, Ethereum staking should not cost gas. Keep in mind, however, that if you let a company or mining pool handle the staking for you, you will have to pay gas on the transactions to deposit and withdraw any Ethereum.
New: “Beyond Staking” (Haru Invest ETH)
The new Haru Invest products, “Beyond Staking (ETH)” is now live. Start investing your ETH today and target up to 21.5% annual return rate!
About the Product
- Release Date: April 27th, 2021
- Product Name: Beyond Staking
- Asset Type: Ethereum (ETH)
- Target Return: 21.5%
- Investment Period: 3 Months+
Is ETH Staking Profitable?
Ethereum staking can indeed be profitable. Ethereum 2.0 has been launched, but it is in the very early stages. Even so, experts agree that it can be profitable. When Ethereum 2.0 was announced, it seemed that staking would be barely profitable but still lead to profits. Adjustments have increased that and made it seem more likely to be profitable.
Platform-specific Alternatives Can Be More Profitable
While it is profitable to stake ETH, choosing to use an alternative method and staking your ETH with a platform can be even more profitable. For that to be the case, you will need to choose the right platform. You would want one with a solid experience with cryptocurrency and investing.
When you find the right platform, you can see yourself earning even more Ethereum than you would from staking it using the traditional manner. This is because you get to take advantage of the expertise behind the platform and their ability to use multiple strategies to earn ETH.
Also Consider Ethereum’s Value
When thinking about the profitability of staking Ethereum, don’t forget that you will be earning more ETH, and your profits will stay in ETH. This means that as the price of Ethereum increases, you will get to earn value in two ways: the increase in the quantity of ETH you have and the value for each ETH.
An Example of How Profitable Staking Can Be
For an example of how profitable this non-traditional method of staking can be, look at the recent performance figures from Haru Invest’s Earn Like the Best account, which invests BTC. The biweekly return from March 1-15, 2021, was 0.6261%, which is 15.23% annualized.
How to Stake Ethereum With Haru Invest
If you want to stake Ethereum with Haru Invest, your best choice will likely be an ETH Beyond Staking account. You get to choose how long you want to stake or lock up your Ethereum for. The longer the lockup period you opt for, the higher your interest rate will be.
To help you grow your profits more, your Haru Earn Plus account has a daily-compounding interest. This lets you earn interest on past profits, essentially meaning that you will have even more profits every day than the previous day (assuming the same interest rate).
When you are ready to stake Ethereum, visit the Haru Earn Plus page or the signup page. You will need to enter an email address and create a password. Then, you can just choose your account type (Haru Earn Plus), deposit your Ethereum, and pick your lockup period.