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- The overall sentiments across the cryptocurrency market are of anticipation
- Lido is a liquid staking solution for Ethereum
- StakeWise, enables users to achieve the highest yield possible on their holdings
With Ethereum finally undergoing its London hard fork dubbed EIP-1559, which includes reforms to the transaction fee market, the overall sentiments across the cryptocurrency market are of anticipation. The London upgrades are a series of upgrades that are part of Ethereum’s unhurried changeover from its original proof-of-work consensus model to a proof-of-stake model dubbed Ethereum 2.0.
Eth2 token holders who possess at least 32 Ether can log into a validator node and verify transactions on the network. However, the current price of ETH trading is near $2,700 that puts the entry cost of running an Eth2 validator node at $86,400. It is a very steep price and out of reach of most of the participants.
To tackle this issue, several options are available for the token holders, including staking pools and centralized exchange staking, offering token holders the opportunity to earn a yield on their tokens. Here’s a review of some of the top options currently available to Ether holders.
LIDO
For ether token holders who wish to stake their tokens and also want to access their equity, Lido is an attractive option. Lido is a liquid staking solution for Ethereum. Liquid staking protocols enable token holders to earn staking rewards without locking assets or maintaining staking infrastructure. The LIDO platform enables users to stake their Ether with no minimum deposit required, with a current APR of 5.4% after deducting the staking rewards fee. Users then receive stETH for staked Ether which can be freely moved and traded at will.
Total value locked on the Lido protocol. Source: DeFi Llama
As per the data obtained from DeFi Llama, Lido is presently the top-ranked Ethereum staking pool and the eleventh-largest decentralized finance (DeFi) protocol. The total value is locked, with $3.26 billion in value currently locked in the Lido protocol.
The Liquid staking capability of Lido is in the process of expanding due to an initiative in the Anchor protocol community to list bETH, a wrapped form of stETH on the Terra Blockchain. It will be in the form of collateral on the Anchor platform. It will enable Anchor users to borrow TerraUSD (UST) against their staked Ether collateral and earn liquidity mining rewards.
STAKES
Through a blend of staking, yield farming, low fees, and a unique tokenomic structure that enables compound staking, StakeWise, the Eth2 staking service, enables users to achieve the highest yield possible on their holdings.
Token holders can deposit Ether into StakeWise smart contracts. The users receive sETH2, which is “staking ETH. Rewards for the staked assets are paid out in rETH2, which is “reward ETH,” and both sETH2 and rETH2 can be exchanged at a one-to-one ratio for Ether. Users have the freedom to transfer these assets to any Ethereum wallet or exchange them for other tokens. Thus token holders have access to the equity held in their staked Ether while also earning staking rewards.
The StakeWise protocol allows any user who holds at least 0.001 ETH to participate in staking via the StakeWise Pool. Larger token holders with at least 32 ETH can use StakeWise Solo. StakeWise Solo is a noncustodial staking service where users provide the public part of their withdrawal key and blocks of 32 ETH for StakeWise to create and manage validators on their behalf. APR offered for staking on the StakeWise protocol is 5.64% and a 10% commission for rewards generated through StakeWise Pool. At the same time, StakeWise Solo users are charged 10 Dai per validator per month.
CENTRALIZED EXCHANGES
For the users who prefer a more traditional custodial route instead of dabbling in the intricacies of decentralized finance, some of the top centralized exchanges in the ecosystem have started offering Eth2 staking services to traders on their platforms. Coinbase is the number-two, and Kraken, the number-four globally ranked cryptocurrency exchanges, are the leading options currently available to users in the United States.
However, users who wish to stake their Ether using one of these options must be aware that their stakes will be illiquid, meaning that they will be unable to trade their tokens or access the value contained within until the Eth2 network is fully launched.
Kraken currently offers an annual staking reward of 5% to 7%, depending on the rules of the Ethereum protocol, while the current APR offered by Coinbase is 5%, after a 25% commission is deducted. In addition, Kraken charges a 15% administrative fee on all rewards received. Both Kraken and Coinbase do not offer any insurance on staked Ether.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
