The Ethereum Merge has been successfully completed, the Beacon chain has merged with Mainnet and the network is officially a Proof-of-Stake (PoS) network. This survival guide will walk you through your first steps to interacting with PoS Ethereum and ensure you don’t get #rekt when staking your ETH.
- Staking withdrawals are not yet enabled with The Merge. The following Shanghai upgrade will enable staking withdrawals.
- The Merge is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees.
- You have four options to stake your ETH
- Validator as a service (VaaS)
- Join a Staking Pool
- Stake with a centralised exchange
- The Expected Reward rate depends on staked value and fees
- Assuming a higher fee market and increased staked ETH after a year, we expect the yield to settle around 6-7% after one year
This guide will show you:
- How to stake your ETH
- Options to stake your ETH
- Benefits of staking your ETH
- Things to watch out for when staking ETH
Let’s dive in!
1. How to stake your ETH
We will show you how to stake with RocketPool, a decentralised Ethereum staking pool. Users who deposit ETH on the Rocket Pool platform, receive rETH tokens, which are accruing rewards in real-time. rETH can be traded back for the deposited ETH + accrued rewards when you are ready.
- Minimum stake: 0.01 ETH
- Commission Fee: Fixed 15%
Please note that there are many options available to stake your ETH. While the gold standard is to run your own node (at home), we understand that it is not a feasible option for most stakers due to the 32 ETH requirement and technical know-how in running a node. We are committed to decentralisation and believe that RocketPool is too, it is a great option for stakers with less than 32 ETH and it allows users to have liquidity on their staked ETH through the rETH token.
Step 1: Make sure you have a MetaMask wallet
MetaMask is one of the most popular self-custody wallets and offers users the ability to stake their tokens, use blockchain apps and manage multiple tokens in one wallet. You can download the MetaMask wallet here.
Step 2: Get yourself some $ETH
You can purchase $ETH on all major centralised exchanges. Once you have purchased some ETH, send it to your MetaMask wallet.
Step 3: Add the rETH token to MetaMask
To see your rETH balance in MetaMask (or if you want to send rETH to other addresses), you will need to add the rETH token contract to it. Follow these steps to add it:
- Open MetaMask
- Click the ‘Assets’ tab
- Click ‘Import token’
- Choose ‘Custom Token’, then add the following details for the network you are using:
- Contract Address: 0xae78736cd615f374d3085123a210448e74fc6393
- Token Symbol: rETH
- Decimals of Precision: 18
Step 4: Go to the RocketPool portal
Head over to the RocketPool portal and connect your MetaMask wallet. Choose how much $ETH you want to stake and then click ‘Stake’
- Go to the RocketPool portal
- Connect your MetaMask wallet
- Type in how much ETH you want to stake
- Click ‘Stake’
- Confirm the transaction in your wallet
Congratulations, you have now staked your ETH and have received tokens called rETH. All you need to do is hold onto your rETH, and you’ll automatically gain your staking rewards as the value of the rETH token increases.
- Note: Your rETH tokens will be locked to your address for 24 hours if you use this method to prevent timing attacks on the network.
2. Options to stake your ETH
There are four main ways to stake your ETH:
Run your own validator node
To run an Ethereum node you will need to deposit 32 ETH to activate a validator, giving you the ability to participate directly in network consensus.
Join a Staking Pool
If you have less than 32 ETH, Staking pools may be your best option. They are a collaborative approach to allow many people with smaller amounts of ETH to pool their funds together to meet the 32 ETH required to activate a set of validator keys.
We recommend that you read our Ethereum Staking Derivatives article before pooling your Ethereum to get a better understanding of how pooling and liquid staking assets work. We would recommend checking out two pooling services:
- Lido Finance
Use a Validator as a Service (VaaS)
Also known as ‘Staking as a Service’ (SaaS), is where you deposit your own 32 ETH for a validator, but the node operations are run by a third-party operator. If you have 32 ETH to stake, but don’t feel comfortable dealing with hardware and maintenance, VaaS services allow you to delegate the ‘work’ while you earn native block rewards
We recommend that you look at the VaaS providers available on the Staking Rewards Ethereum page when deciding.
Use a centralised exchange
Centralised exchanges (CEX’s) provide staking services with intuitive user interfaces if you are not yet comfortable holding ETH in your own wallet. It is easily accessible and requires little effort and oversight. We do not recommend this option as your first choice because it requires large trust assumptions and does not contribute to the decentralisation of the network. It is okay if you don’t feel comfortable using a self-custodial wallet and prefer to use a centralised exchange. However, we always encourage you to support decentralisation and learn how to use the other options listed above. If this is the option you would like to go with, please see our tutorial on: How to stake ETH with Binance
3. Benefits of staking your ETH
Now that Ethereum is officially a PoS network, a few key changes have taken place that result in an increased reward rate to stakers.
Increased Reward Rate
- Proof-of-Work miners no longer receive rewards. Before The Merge, rewards were split between miners and validators. Now that The Merge is complete, ETH rewards will only go to validators.
- In addition, validators will now receive transaction fees (minus burn), a portion of Maximum Extractable Value (MEV) rewards, and any fees that are ‘tipped’ during a transaction.
Remember that these rewards will change based on a number of factors.
What is the current staking yield?
- The most accurate reflection of what you will be earning can be found on our Ethereum asset page where we do all the hard yards for you.
How do I calculate what I will earn?
- We have developed an advanced staking calculator that works out your expected return based on the inputs you give it.
4. Things to watch out for when staking your ETH
Please be aware of the following
- Scammers contacting you to convert your ETH into ETH2 tokens, there is no new token and anyone who says otherwise is trying to scam you.
- Be careful when interacting with dApps and websites.
- Do not send your ETH anywhere in an attempt to ‘upgrade to ETH2’.
- Do not respond to random people messaging you on Telegram, Discord or Twitter.
- The merge to ETH PoS does not require any actions from users and you can continue to use Ethereum as previously.
Some say it is a survival of the fittest, but we’ve done the hard yards so that you don’t have to. This guide should be enough to get you started on a successful Ethereum staking journey. If you are interested in diving deeper into The Merge, we have a dedicated Ethereum page on our journal that should quench your curiosity. Be sure to subscribe to our newsletter and Twitter page for further Ethereum updates, happy staking!