What is Ethereum?
Ethereum is the world’s largest and most decentralised Layer1 blockchain. The network is used for building dApps, holding assets, transacting and communicating without being controlled by a central authority. The Ethereum vision is to build a digital future on a global scale that is powerful enough to help all of humanity. The token that powers the Ethereum network is ETH and it is exclusively used for trading, staking, and paying transaction fees on the network. This tutorial will show you how to stake Ethereum (ETH) tokens on the Ethereum network.
TL;DR
- View the current ETH staking APR here
- Use the ETH Staking Calculator to estimate your rewards
- Lockup:
- Run a validator: Shanghai upgrade
- Liquid Staking Pools: No lockup
- Average commission: 10%
- Minimum amount required for staking:
- Run a validator: 32 ETH
- Liquid Staking Pools: 0.01 ETH
- Estimated time needed to stake your ETH in your wallet: 5 minutes
- Recommended ETH staking wallets: Ledger, Metamask
- Steps to 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
Prerequisites
Where to buy ETH
You can get ETH tokens at a cryptocurrency exchange, at a DEX, or within select wallets. You should always do your own research when selecting a reputable cryptocurrency exchange. For best security, it is not recommended to leave your tokens on an exchange, but transfer them to your non-custodial or cold/hardware wallet after procuring them.
Ethereum wallets
Ethereum has a variety of non-custodial wallets for you to choose from. We recommend that you use a hardware wallet such as Ledger otherwise we suggest using Metamask wallet. Compatible wallets include:
How to connect Ethereum (ETH) to Metamask
In order for MetaMask to communicate and interact with the Ethereum Network, it must be added. Click on the MetaMask icon within your browser and login. Once you have logged on, click on the currently connected network, ‘Ethereum Mainnet’ is displayed by default when installing the wallet the first time.
If you want to add other Ethereum compatible networks, click on the network name at the top of the wallet, a dropdown menu appears with the title, ‘Networks’. Near the bottom, you should find ‘Add network’, click this option to continue.
At the bottom of the page it will say “Add a network manually”, click this and fill in the details you see for the network you want. You can find the details for most EVM networks here.
How to bridge assets to and from Ethereum
To utilize the Ethereum network, users must first transfer ETH to their personal wallet. This can be done by withdrawing the ETH you bought to a wallet of your preference. ETH is used for gas fees on the Ethereum network and is a requirement for bridging assets to and from Ethereum.
Every bridge works a bit differently and has its own nuances. Here a few links to bridges from that can be used to connect the main EVM networks to Ethereum Mainnet:
- Polygon Bridge
- Arbitrum Bridge
- Optimism Bridge
- Near Bridge
- Boba Bridge
- Avalanche Bridge
- Fantom Bridge
- Harmony One Bridge
- Gnosis Bridge
Bridges typically operate similarly; upon accessing the bridge, you will encounter a login screen presenting a list of compatible wallets you can utilize to interact with the website. To transfer an asset from one chain to another, simply choose the desired asset and sign the message through your selected wallet. As an illustration, this is how it operates on the Polygon network.
It is important to be aware that bridges have a reputation for being vulnerable to hacking. Please keep in mind that we cannot accept any liability for funds that are lost as a result.
Selecting Ethereum validators
Please refer to the FAQ section titled ‘How do I choose Ethereum validators’ on this page when selecting Ethereum validators. Also, you may want to utilize our criteria for verifying providers through the Staking Rewards Verified Staking Provider Program (VSP).
How Staking Rewards for Ethereum are Generated
Learn how rewards are generated in the FAQ section titled ‘How are the rewards generated’’ here.
How to Stake Ethereum (ETH)
There are four main options to stake your ETH:
Solo home stake (Run a validator):
Solo staking on Ethereum is the gold standard for staking. It provides full participation rewards, improves the decentralization of the network, and never requires trusting anyone else with your funds.
Those considering solo staking should have at least 32 ETH and a dedicated computer connected to the internet ~24/7. Some technical know-how is helpful, but easy-to-use tools now exist to help simplify this process.
Learn more about solo staking here.
Validator as a service
If you don’t want or don’t feel comfortable dealing with hardware but still want to stake your 32 ETH, staking-as-a-service options allow you to delegate the hard part while you earn native block rewards.
These options usually walk you through creating a set of validator credentials, uploading your signing keys to them, and depositing your 32 ETH. This allows the service to validate on your behalf.
This method of staking requires a certain level of trust in the provider. To limit counterparty risk, the keys to withdraw your ETH are usually kept in your possession.
Learn more about staking as a service here.
Staking pools
Several pooling solutions now exist to assist users who do not have or feel comfortable staking 32 ETH. Many of these options include what is known as ‘liquid staking’ which involves an ERC-20 liquidity token that represents your staked ETH.
Liquid staking enables easy and anytime exiting and makes staking as simple as a token swap. This option also allows users to hold custody of their assets in their own Ethereum wallet. Pooled staking is not native to the Ethereum network. Third parties are building these solutions, and they carry their own risks.
Learn more about staking pools here.
Centralised staking
Many centralized exchanges provide staking services if you are not yet comfortable holding ETH in your own wallet. They can be a fallback to allow you to earn some yield on your ETH holdings with minimal oversight or effort.
The trade-off here is that centralized providers consolidate large pools of ETH to run large numbers of validators. This can be dangerous for the network and its users as it creates a large centralized target and point of failure, making the network more vulnerable to attack or bugs.
Please view our step-by-step staking tutorial.
This tutorial will guide you on how you can stake your ETH with RocketPool – a decentralized staking pool on Ethereum.
Step 1: Make sure you have a Metamask wallet
Metamask is a popular wallet in the Ethereum ecosystem 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: Go to the RocketPool staking 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
Please keep in mind that you will need to pay an Ethereum gas fee when staking your ETH, the cost of this will vary depending on the network activity on Ethereum.
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.
Step 3: Track staking portfolio
- Track your ETH staking rewards on the staking dashboard of the pool you have chosen.
- Monitor governance proposals on Ethereum network that may impact the staking mechanism.
- Track the current and historical reward rates, validator count, number of unique Ethereum staking wallets, and staking ratio of the Ethereum network by visiting the Ethereum asset page. To make better staking decisions, it’s essential to understand these relevant data points. To learn how these data points could impact your staking rewards, please read more in the FAQ sections named “How do I choose Ethereum validators” and “How are the rewards generated” on the Ethereum asset page.
Step 4: How to Unstake ETH
To unstake your ETH tokens, you can simply trade out of your rETH token back to native ETH through Uniswap
- Go to Uniswap V3
- Connect your wallet
- Select rETH at the top
- Select ETH at the bottom
- Click ‘Swap’ and sign the transaction
It is important that you did not technically unstake your ETH but actually just traded your liquid staking derivative (rETH) for native ETH on a secondary market.
Maximizing Staked Ethereum (ETH)
Now that you have staked your ETH, you have three options which can be used to change your position. The options are:
Stake more
You can stake more ETH through one of the staking options mentioned above. To stake more ETH using RocketPool, simply follow the steps explained above.
Claim reward
Rewards are automatically distributed every few days once the Shanghai upgrade goes live. Some users may have provided a withdrawal address when initially setting up their staking deposit—these users have nothing more they need to do. The majority of stakers did not provide a withdrawal address on initial deposit, and will need to update their withdrawal credentials. The Zhejiang Testnet Launchpad has instructions on when and how to do this
Unstake
The Shanghai/Capella upgrade enabled staking withdrawals on Ethereum. The time you will need to wait to unstake your ETH can vary depending on the number of validators ahead of you in the withdrawal queue. Currently, a maximum of 16 withdrawals can be processed at a time in a single block, which translates to around 115,200 validator withdrawals per day, assuming no missed slots.
Conclusion
Staking is essential to Proof-of-Stake blockchains and comes with many benefits for investors and the network:
- Investors earn yield from token emissions and/or transaction fees.
- Stakers become eligible for airdrops as many networks prioritize granting these benefits to them.
- Staking helps to secure the network
- Staking from multiple participants helps decentralize the network
- Stakers can participate in governance, as many PoS networks allocate governance rights based on the amount of tokens staked.
Congratulations! You are now not only getting the most out of your investment with compounded returns. YOU are also (in-)directly contributing to the decentralization, and the network security of Ethereum and thus contributing to the long-term success of your investment! Ethereum needs active stakers like you to become successful long-term.
Now share the tutorial with your friends so they can get to start staking as well!
Lastly, don’t forget to check out the Ethereum (ETH) asset page for more insights into staking ETH, and drop us a message if you found this tutorial useful. Happy staking!