ETH Staking Sites: Where to stake Ethereum for best return in 2023?
In the last few months, a lot of people have seen losses in crypto. However, with the year 2023 on the precipice, everyone is looking for the best and most trustworthy ways to earn profits and get the best returns. If you are one of these people looking to make money off your Ethereum, then, Staking might just be the option for you.
In this article, we have covered everything you need to know about what and where of Ethereum Staking.
What we are going to learn?
What is Staking?
Staking is the activity of depositing or locking your ETH tokens in order to help validate the blocks on the Blockchain and secure it. Through staking you get to be a validator who will be given the responsibility to not just store and process data but also the perk of earning new ETH.
What are the benefits of staking?
While Staking helps the blockchain increase its security and perfect its consensus mechanism, it also has in store many other advantages for the users of Ethereum. To list a few
- You can earn many regards through staking. You can earn many perks and privileges for running software that efficiently validates transactions into new blocks.
- The entire process is a lot more sustainable and environmentally conscious
- You can receive an annual percentage yield (APY) reward on your staked tokens which is around 5%
- In comparison to other cryptocurrencies, staking of Ethereum is a lot more safe.
Also learn: What is NFT staking in 2023?
In what ways can you Stake Ethereum?
All in all, there are 4 major ways you can stake Ethereum. These are
Solo home staking
Solo home stalking is considered to be the highest-tier staking. It involves complete participation and is fully decentralised. It does have certain necessary requirements like a minimum of 32 ETH and a round the clock computer connected to the internet.
Staking as a service
Staking as a service allows you to delegate the hardware part of the process whilst still letting you earn the native rewards. However, it does require to lend in some trust in the provider as they are validating on your behalf.
Pooled staking is the best option for those who are still a little weary or uncomfortable in staking their ETH. It is a form of liquid stalking that makes the entire process as simple as swapping a toke. However, the risk comes in because pooled staking is not an Ethereum Blockchain native and requires third party apps.
The last but not least method is stalking through centralized exchanges. They are the most trustworthy options if you are not okay with holding ETH in your own wallet.
How much can you make while staking Ethereum?
Ethereum staking rewards are not fixed but do have a reputation for being very fruitful for the users. The amount that ETH staking pays depends upon the number of participating validators at any given time. Annually you can earn anywhere around 5% to 20%. The yield also depends on the upcoming projects on the Ethereum blockchain as well as the Ethereum value.
Where can you Stake Ethereum?
Ethereum is undoubtedly very well known and the second largest cryptocurrency by market cap in the world. The best places that allow you to Stake Ethereum and could result in good returns are:
If you know even a little about cryptocurrency you are sure to have heard the name of Binance. Binance is the world’s largest exchange and is considered to be one of the top best crypto staking platforms. Binance offers a great erk by allowing even those users with less than 32 ETH to stake their tokens. The minimum value of Ethereum set by the exchange is just 0.1ETH.
To stake using Binance, users are required to change their ETH coin to BETH tokens. The ratio of conversion is 1:1, which means that for one ETH token, one BETH will be issued. 100% of all on-chain rewards are distributed back to the customers. One major con is the US alternative of Binance. The website Binance.US still doesn’t support staking. In my opinion, Binance is definitely a great option, especially for those who also want the added advantages and perks while staking any coin in general.
Coinbase is a US developed exchange that promises users with a simple ad uncomplicated experience. Coinbase is really helpful as it doesn’t levy any minimum requirement of ETH that you must hold in order to stake. Coinbase also assures that it would cover the risks that come with a centralised exchange at no extra cost to the user. However, one important thing to keep in mind is that Coinbase does charge a 25% commission fee on the profits. Coinbase is undoubtedly the best suited option for US citizens looking for a trustworthy exchange for ETH staking.
Kraken is a crypto exchange developed for those users who are new to crypto and are looking for low trading fees with access to a wide array of coins. It has impeccable security and competitive pricing features which make it a go to option for a lot of people. For the staking of Ethereum, Kraken also provided a 1:1 ratio, but between the trading pair ETH2.S/ETH. To earn rewards, the staked ETH does undergo a resting period of 20 days. The administration fee charged by the platform on your reward that arises out of staking is 15%.
Bitfinex is an exchange platform for cryptocurrencies that provides great trading tools and innovative technology to its users. They claim as much as 10% APY as staking rewards (this figure was last updated by their website on December 23, 2020) and don’t have any minimum requirement of ETH tokens. They also don’t charge any staking fee but however are unfortunately not available for citizens of the United States or Canada.
Unlike the other options in this list, Lido is not an exchange but in fact a platform that allows liquid staking and is Ethereum based. Not only is it extremely user and beginner friendly it is also a decentralized platform. Apart from Ethereum, it also supports networks like Solana, Polygon, Polkadot and Kusama.
Drawbacks of Staking Ethereum
Some drawbacks of staking Ethereum include:
- Risk of losing your staked ETH if the network is compromised or if you make a mistake while managing your staked funds
- Limited liquidity, as staked ETH cannot be easily sold or transferred while it is being used to validate transactions on the Ethereum network. This is a problem for anyone who has investment limited amount in ETH, and can’t afford holding for long term. You need to keep holding even if you want to sell and take your money off.
- Potential for reduced returns if the rate of return on staked ETH is less than the rate of return on other investments
- Higher technical requirements, as staking requires running a validating node and may require a certain level of knowledge and understanding of the Ethereum network.
Staking Ethereum is one of the best ways to earn from crypto passively. However, you must make sure that you do enough research and choose only the best platforms to stake coins in order to avoid any unwanted risks.