The Best Places To Stash Ethereum
Ethereum is one of the most popular and valuable digital currencies in the current cryptocurrency market. However, while this currency is widely available to buy, sell and trade, not every platform is great by relying on it directly. There are also some terms and conditions related to the contribution that you should be aware of beforehand.
So, what should you know before staking Ethereum, and what are the best platforms to use it for? Check out the best cryptocurrency wallets to store your cryptocurrency assets.
Are there any requirements to invest in Ethereum?
If you want to accumulate Ethereum and become a validator, you will need to own 32 ETH already, and you will need to be ready to secure that balance. This setting is pretty much consistent across the cryptocurrency exchange industry and is sometimes referred to as the 32 ETH requirement. At the time of writing in November 2021, this number of ETH is around $129,395.84 — and clearly not an insignificant number.
Staking is the process of depositing 32 ETH to activate the validator program. As a validator, you will be responsible for storing data, processing transactions, and adding new blocks to the blockchain. This will keep your Ethereum safe for everyone and earn you new ETH in the process. This process, known as Proof of Stake, is offered by the Beacon Chain.
But what is a validator, and do you need to be one in order to participate in Ethereum?
In short, the validator can verify the transactions made on the blockchain, which is also known as the Proof of Stake algorithm. Where he will be responsible for creating new blocks and increasing the security of the platform. The checker also needs enough storage space and RAM — 250 GB and 8 GB respectively. And by being a validator, you can be rewarded.
You can join a stake pool with just two ETH, where you can combine your cryptocurrencies with other currencies to get the rewards. But that still amounts to thousands of dollars in cryptocurrency, so keep that in mind. You will also need to be running an “Eth1” or Mainnet client to do this.
Rewards are awarded for actions that help the network reach consensus. You’ll get rewarded for bundling transactions into a new block or checking the work of other validators because that’s what keeps the chain running safely.
Although you can earn rewards for doing work that benefits the network, you can lose ETH due to malicious actions, going offline, and validation failures.
Well, now you have a better understanding of the staking requirements for Ethereum. Let’s take a look at the best platforms to perform this activity on.
1. Coinbase
Coinbase is a cryptocurrency exchange that was launched in June 2012 and started allowing users to contribute in April of 2021. It is a very popular platform and now generates billions of dollars in annual revenue. But what makes it a good choice for staking Ethereum?
The great thing about Coinbase is that it does not have any minimum amount of ETH. Of course, you still need a minimum of 32 ETH to become a validator — but you can easily join the Coinbase staking pool. You can earn rewards in the form of Ethereum with these stacks. Coinbase is also a trusted and legitimate exchange, so you don’t have to worry about getting your ETH defrauded here.
Now, for the downside. Coinbase takes 25% commission on any rewards you earn by staking. You also can’t stack Ethereum on Coinbase if you live outside the US, which can be a limiting factor for many. Make sure to check these requirements before you start the staking process.
2. Kraken
Kraken exchange was founded in July 2011 and has since made its way among the top cryptocurrency exchanges. You can buy and sell a wide range of cryptocurrencies on this platform, as well as accumulate your stake in Ethereum.
Like Coinbase, you’ll need at least 32 ETH to become an independent validator and collector on Kraken, but the platform offers the ability to join a staking pool with as little as 0.0001 ETH.
Like Coinbase, Kraken charges a fee for staking Ethereum, though it’s only 15% compared to Coinbase’s 25%. This is also an administration fee, not a commission, but will be deducted from your bonus earnings.
3. Binance
Binance is a massive cryptocurrency exchange launched in 2017 by entrepreneur Changpeng Zhao. You can trade over 500 cryptocurrencies on the Binance exchange, as well as stack Ethereum.
Binance also has a requirement of 32 ETH for independent validators, but you can share ETH in a custom pool for just 0.1 ETH (which is about $400).
Be aware that Binance exchange stands for BETH (or Beacon ETH, a token from the Beacon Chain) as the sole proof of your Ethereum in a 1:1 ratio (so 1 BETH = 1 ETH). But there are absolutely no overstock fees, so you can reap the rewards of your labor without any frustrating cuts.
4. Bitfinex
Bitfinex cryptocurrency exchange was founded in 2013 in Hong Kong by Giancarlo Devasini and Raphael Nicolle. It is now the top choice for buying and selling cryptocurrencies all over the world and is also a solid choice for staking ETH for a number of reasons.
First, there is no minimum requirement for ETH if you want to stockpile without being an independent validator. However, Bitfinex adheres to the 32 ETH rule if you want to become an official validator, so keep that in mind.
So, let’s move on to the fees. There are none! Bitfinex does not charge any kind of fee for stacking, so you will get exactly what you earned.
5. Lido
Unlike the other platforms listed here, Lido is not a cryptocurrency exchange. It is actually an Ethereum-based liquid trading platform that allows you to share any amount of Ethereum you want and does not lock out your funds as some other exchanges do.
Lido requires a minimum deposit of 32 ETH for self-stake, but you can still join the stacking pool without a minimum deposit requirement. However, Lido requires a 10% participation fee, which you take from your winnings.
6. Poloniex
Poloniex is a well-established cryptocurrency exchange that was founded in 2014.
Unlike the other platforms discussed here, Poloniex does not adhere to the 32 ETH staking rule for validators, which opens the door to everyone who does not own large amounts of Ethereum.
Unfortunately, Poloniex charges a huge stacking fee at 25%, which you get out of your winnings. So if you don’t want to take that kind of hit, consider exchanges that charge less — or no fees at all.
Stacking can earn you bonuses, but it’s better to do it right
Stacking Ethereum is a great way to earn rewards from your deposited funds, but it is important to know which platforms offer the best user experience and benefits before dumping any of your precious assets. So, take a look at the above suggestions before you decide on your final Ethereum stack location. Now check out Decentralized Finance: What is Yield Farming and Why is it So Popular?
Disclaimer: We do not have any legal ruling on staking Ethereum as cryptocurrency prices change frequently, so it is best to check with knowledgeable people before engaging in any investment.