How to Stake ETH & Earn 10+%
First up, if you want to watch this in video form, I’ve posted it on my Youtube Channel right here:
What is Staking?
The current version of ETH (ETH1.0) uses proof of work to secure the network, and has done since its inception. Unfortunately, there are a couple of key drawbacks to its current iteration and PoW:
- The network can only process 15 transactions a second.
- It takes a lot of energy/power to run the PoW computers, meaning its not exactly eco friendly or sustainable.
In order to overcome this, Ethereum is moving to a Proof of Stake system to secure the network. The difference is that instead of the nodes having to provide proof of work, they now just have a monetary incentive to ensure they do not stamp fraudulent or incorrect transactions. Every validation node must hold a minimum of 32ETH (staked), and is subject to financial penalty for bad actor authorisations.
Alongside a number of key technology upgrades to the network, most notably ‘sharding’, this change to PoS enables over 100,000 transactions per second + a significantly reduced cost to operate it.
So How Can I Stake?
Well, you could stake on your own validator node. This would require you to have 32 ETH, and a server permanently connected to the internet running the Eth Core software. Obviously this is not practical for many reasons for the average investor, so services called Staking Pools have arisen. There are a number of them, but my favourite is Binance. Mainly because:
- Its extremely easy to stake
- They provide you with a BETH token in exchange for your staked ETH, which you can trade if you wish.
- Binance are the biggest, most reputable exchange in The World, so in theory, your ETH is safe from misuse or fraudulent activity.\
It’s important to note, that once staked, you cannot access your ETH until the main ETH2.0 network is launched in circa 2022. Thats why Binances BETH solution works so well, just in case you need access to the funds and want to liquidate for some reason.
As more ETH is staked the rewards go down, as the risk of the network failing exponentially decreases. Currently the APR is around 9.5%, paid daily as BETH directly into your Binance Wallet.
All you need to do, is transfer ETH to your Binance Account, go to the Finance section, select ETH2.0 Staking, then click the Stake Now button.
Good luck and please use my referral code if you want to sign up to Binance, we both share the rewards 10% each of your trading fees that you generate for the platform.