Flashstake allows users to receive upfront yield on deposited assets instantly with a fixed rate over a set duration.
The protocol is currently live on Ethereum, Arbitrum and Optimism and offers a variety of strategies on assets such as rETH.
Assets on FlashStake
Flashstake claims that users can receive upfront yield on rETH without many drawbacks seen in other protocols. For example:
User funds cannot get liquidated.
User funds are always 100% collateralized.
Users can lock for any amount of time down to the minute.Users know precisely when their principal will unlock.
Users can unlock their principal at any time by repaying a portion of their upfront yield.
Outside of an unforeseen exploit, it is technically impossible for users to lose their principal.
This means that Flashstake is extremely useful if you want to lock in a fixed rate interest for a specific amount of time and getting paid upfront. In addition, you can also use the upfront yield to hedge or leverage without losing your principal.
There are 3 simple steps to claim upfront yield for rETH:
Choose the amount of rETH/ETH/wETH tokens you want to stake
Choose the duration of time to stake
Claim upfront yield instantly
Behind the scenes, Flashstake stores the capital into a time vault strategy (TVS) and mints a time-based derivative (TBD).
Time vault strategies are custom smart contracts that help people buy, sell, and earn TBDs, and also handles the complex logic to derive the yield. For example, a Lido TVS strategy could be used to generate upfront yield on stETH while a Aave v2 Time Vault strategy could be used to generate upfront yield on USDC.
Currently, Flashstake supports a variety of Time Vaults from Aave, Lido, GMX and Rocket Pool. To incentivize creation and protocol activity, Time Vault creators can take a fee anytime someone uses their Time Vault Strategy.
On the other hand, time-based derivatives represent the time value of money for any digital asset. When you stake into a time vault strategy, time-based derivative ERC-20 tokens are minted.
They represent the yield pool – a person holding 50% of the TBD supply for the specific yield pool can redeem 50% of the yield in the corresponding time vault strategy.
The two concepts above work hand-in-hand to help users generate upfront yield, while the protocol takes a small cut of between 0% to 20% (known as a time fee, which is currently set at 5%) for providing the service.
The time fee goes into the Flash Capacitor, which is the protocol’s value capture mechanism.
The only way to remove Time Fees from the Flash Capacitor is by depositing FLASH tokens, which is then sent to the treasury to further reduce the circulating supply.
Risks of Flashstake
Flashstake is audited by Peckshield and Openkertify / Secure3 with bug bounties underway.
There are no admin functionality to control users’ principal or funds at any time except a function to adjust the percentage fee taken each time TBDs have been minted and the address they are sent to.
However, these do not completely erase the risks and users should always exercise caution when dealing with experimental technology.
Allnodes is a web hosting service that provides nodes for various blockchain networks.
It was founded in 2018 by a team of blockchain enthusiasts who were frustrated by the lack of affordable and reliable hosting services for blockchain nodes.
They saw an opportunity to create a service that would make it easy and affordable for anyone to host a node, regardless of their technical expertise.
Since then, it has become a leading provider of hosting services for blockchain nodes and currently offers the ability to deploy and manage nodes for more than 30 different blockchain networks, including Ethereum, Solana and Polkadot with a growing user base that spans the globe.
Supported blockchains on Allnodes
A node’s primary job is to confirm the legality of each subsequent batch of network transactions, known as blocks.
Why would you use Allnodes?
Allnodes makes it easy and attractive for anyone who wants to host a node.
Ease of deploying blockchain nodes
Allnodes is designed to be easy to use, even for users who have no technical expertise. The platform provides a simple, user-friendly interface that makes it easy to deploy and manage nodes without the hardware infrastructure.
Host nodes on various blockchains on Allnodes
You can setup nodes in minutes and earn attractive rewards directly to your wallet when you host on Allnodes.
Affordability of node services
Allnodes offers some of the most affordable hosting services for blockchain nodes on the market. Prices start at just US$5 per month, making it accessible to anyone who wants to host a node.
Pricing for Allnodes
Allnodes has two levels of pricing – Basic and Advanced, which vary by the uptime SLA, setup fees, billing plan and support.
Allnodes Pricing
With their Advanced plan, you are billed hourly up to a maximum of 672 hours per month, even if your node is online for more than 672 hours in a calendar month. If you’re on Basic, you agree to prepay annually or monthly with a one-time setup fee.
Stability and security
The more important conversation to have is about the reliability of their services and whether they can be trusted to secure your funds.
Allnodes is a semi-custodial service as they hold the validator keys (not the withdrawal keys) to your nodes – although most staking services do so as well.
They claim to have 99.9% uptime guarantee, hosted on VPS of reliable hosting providers like Linode and DigitalOcean. They also implemented a number of measures to ensure that nodes are secure such as regular security audits, 24/7 monitoring, and DDoS protection.
Scaling and monitoring
Allnodes is designed to be scalable, which means that users can easily add or remove nodes as needed. They also provide a range of tools for managing nodes, including the ability to start, stop, and restart nodes.
Users can also monitor their nodes in real-time, and receive alerts if any issues are detected.
How to stake on RocketPool with Allnodes
In this guide, we’ll show you how to stake on Allnodes as a Rocket Pool validator, which requires just 8 ETH + RPL tokens to get started. The same process can be replicated if you want to stake 32 ETH as a solo operator.
Pre-requisites for staking RocketPool with Allnodes
8 ETH + ~100 RPL if you’re staking with Allnodes as a Rocket Pool validator
The ETH that you stake can be held in Ledger, Trezor, MetaMask, Coinbase, Trust, or any other wallet that supports WalletConnect.
Step 1: Sign up for Allnodes
The first step is to sign up for an account with Allnodes – you can use your email address, generate a seed, or use your hardware wallets to connect.
Sign up page for Allnodes
Step 2: Find the host button to start hosting a node
Step 3: Select Rocket Pool on the Masternodes & Validator Nodes page
You want to select Rocket Pool – note the 8 ETH and RPL requirement and ensure that you have these in your wallet.
Rocket Pool hosting solution
Step 4: Select Host a Minipool
Host a minipool
Step 5: Choose your minipool type
Rocket Pool’s Atlas upgrade now allows stakers to stake as little as 8 ETH to host a Rocket Pool node.
You can also select the 16 ETH option to stake as a 16 ETH minipool.
Choose your minipool type
Step 6: Follow the on-screen instructions to host a new minipool
For example, you need to connect your wallet, register for a new wallet address, approve your RPL tokens for staking, and more.
Step 7: Choose a hosting plan for your Minipool
Select whether you want to be on the Basic or Advanced plan with Allnodes. Remember, the Advanced plan has a more reliable uptime, has no setup fees, has priority support and billed monthly.
Click Host a Minipool and download your Validator private key, which lets you move your minipool away from Allnodes should you decide to migrate away from the platform in the future.
Step 8: Confirm the slashing warning
Note that if you do decide to migrate or host another session with the same validator key, you might get slashed and lose ETH! Should you decide to do so, you must disable your minipool on Allnodes first
Step 9: Deposit your ETH
Once you’ve deposited, you will see a minipool queue where your ETH gets added in line, then a scrubbing period will start. You will need to request Rocket Pool to assign the other part of the deposit to form a validator to you.
Step 10: Wait patiently for activation
After requesting for the remaining ETH, your deposit will be processed to form an Ethereum validator node. Once done, you can sit back and collect rewards.
Note that the entire process may be quite expensive, depending on the price of Ethereum and the prevailing gas costs. The most expensive part of the process is registering a minipool, which is expected to cost ~0.18 ETH.
That’s it! You’re done with hosting a Rocket Pool minipool on Allnodes!
In a new update, MetaMask now allows users to stake their ETH with Lido and Rocket Pool directly from the browser extension or mobile wallet, earn daily staking rewards and contribute to the stability and security of the Ethereum network.
If you don’t know what staking is, check out the following guide to familiarise yourself with the basic concepts first.
Step 2: Choose Stake on the left sidebar and select the service provider to stake with
Currently, Metamask offers two service providers to stake with:
Lido (current yield: 3.29% APR)
Rocket Pool (current yield: 2.94% APR)
Select the staking service provider of your choice and click Stake.
Step 3: Enter the amount of ETH to stake and review
You can stake from as little as 0.01 ETH. Review the transaction and click Confirm – you will need to pay gas fees for the transaction.
Once confirmed, check your holdings on the portfolio tab – you should see rETH or stETH in your wallet if you’ve chosen to stake with Rocket Pool or Lido respectively.
When staking with either provider, you are not locked per se – instead, when you stake, you receive a liquid staking token (LST) in return which you can send, transfer, store and sell as you would with your regular ETH. They represent their proportional claim to ETH in the protocol.
For stETH, the token rebases on a daily basis, which means the supply or quantity of your token updates every 24 hours at around 12pm UTC as staking rewards come in. These rewards will keep accruing for as long as you hold stETH in your wallet.
You can exchange your stETH or rETH for ETH through a direct withdrawal or swapping. The amount withdrawable via a swap is a dynamic rate that may differ from a direct withdrawal.
That’s it! Staking with Metamask is as simple as clicking a few buttons – no need to navigate the complicated interfaces of either staking provider.
Rocket Pool, an Ethereum staking protocol, has announced the Atlas upgrade, which will make the protocol compatible with Ethereum’s Shanghai upgrade.
This will enable validators to initiate withdrawals of their staked ETH on the Beacon Chain, and will allow validators to change BLS withdrawal credentials to a withdrawal address on the Ethereum blockchain.
Atlas will be Rocket Pool’s biggest upgrade to date and is primarily aimed at scaling the protocol to meet higher demand while maintaining decentralisation and the health of Ethereum.
It also includes the introduction of LEB8s (Lower ETH Bonded 8), which will allow node operators to create minipools with 8 ETH instead of the previous 16 ETH, and a method for solo stakers to migrate to Rocket Pool while still maintaining decentralisation.
With this change, the protocol can triple its capacity, increase decentralization, improve node security and adapt to the growing demand for rETH.
For node operators, who already earn approximately 16% higher yield compared to solo stakers due to the additional 15% commission from the protocol, the lowered requirement of 8 ETH will allow for 42% higher commission compared to solo operators.
Node operators on 16 ETH minipools can easily migrate to 8 ETH minipools without exiting the validator, increasing the chances of randomised events such as block proposals and sync committees for the node operator.
The upgrade will also introduce several other improvements to optimize gas and scaling, including a simplified minipool queue across multiple types of deposits (8 ETH, 16 ETH) and a dynamic Deposit Pool Limit that grows with the demand.
Furthermore, creating a new Minipool is now more gas-optimized – using 40% less gas.
Atlas is audited by Sigma Prime and ConsenSys Diligence, both spending a cumulative 6 weeks reviewing the code and generating a detailed list of findings.
The Ethereum network is now an energy-efficient and scalable Proof-of-Stake (PoS) model. With this change comes a new set of participants called validators, who play a crucial role in securing the network and processing transactions.
In this guide, we delve into the inner workings of Ethereum validators, their responsibilities, and how they contribute to the overall stability and security of the network.
The basics of Ethereum validators
Ethereum’s proof-of-stake recap
Ethereum transitioned to a proof-of-stake system in a process called The Merge.
In this system, validators take on the role of miners in a traditional proof-of-work system to propose and validate blocks on the network.
The probability of a validator being chosen to propose a new block or attest to existing ones depends on the size of their stake. The more a validator stakes, the higher their chances of being selected.
The role of an Ethereum validator
Validators in a proof-of-stake network are the primary actors responsible for creating/proposing new blocks, validating transactions, and securing the network.
Proposing blocks: creating new blocks by aggregating transactions and broadcasting them to the rest of the network for validation.
Attesting to blocks: verifying the validity of proposed blocks and vote on them
Finalizing blocks: participating in a multi-round voting process to reach consensus on the final state of the blockchain
The key takeaway here is that validators help to build and order transactions, verifies data against the protocol rules, obtain consensus, and keeps the network secure.
Validators are selected on a random basis
The selection process for Ethereum validators is designed to be fair, transparent, and secure.
Validators are chosen through a combination of randomness and their staked amount. The more Ether a validator has staked, the higher their chances of being selected to propose or attest to blocks.
Ethereum uses a system called RANDAO to provide its in-protocol randomness and select a random validator each time and assign it duties.
Requirements to become an Ethereum validator
To become an Ethereum validator, interested participants must meet certain financial commitment and technical capabilities.
On the financial side, an Ethereum validator needs to have 32 ETH – currently ~US$60,000 – as collateral to show his commitment to the network and helps ensure that they have a vested interest in its success.
On the technical side, they must have the necessary hardware infrastructure to provide and maintain a validator node, including installing and configuring Ethereum software clients to participate in the process.
Validator onboarding and maintenance
After meeting the necessary requirements, prospective validators must go through an onboarding process to become an active participant in the network.
This process typically involves:
Generating Validator Keys: generating a unique set of cryptographic keys for their node, which includes a validator keypair for signing blocks and attestations, and a withdrawal keypair for accessing staking rewards and withdrawing their staked ETH
Submitting a Deposit: depositing 32 Ether into the contract, which locks their stake and signals their intent to participate in the network
Configuring Validator Software: installing and configure their chosen Ethereum client software (e.g., Prysm, Lighthouse, or Teku)
Maintenance of validators: utilizingtools and resources available to help them monitor their nodes in real-time and recieve alerts on for validator performance, network health, and other key metrics
Economics of Ethereum validators
Block validation is an ecomomic activity, and to incentivize validators to perform their duties diligently and honestly, the Ethereum protocol employs a carefully designed system of rewards, penalties, and slashing.
Staking with 32 ETH as collateral
As mentioned above, there is a minimum deposit stake required of 32 ETH, which serves to demonstrate stakers’ commitment to the network. Staking requirements help maintain a high-quality validator set, as only those willing to make a significant financial commitment can participate.
While the 32 ETH staking requirement may appear daunting to some, staking pools and services allow users to stake smaller amounts of Ether and share in the rewards and responsibilities.
Rewards for staking
Validators receive rewards when they make votes that are consistent with the majority of other validators, when they propose blocks, and when they participate in sync committees.
Penalties for bad activities
Everything is good for well-behaved validators. But those that go offline or fail to perform their duties will be penalised as well.
Validators who experience significant downtime or fail to remain online consistently can incur penalties, as their absence disrupts the network’s stability. Those that provide incorrect attestations, either due to software errors or intentional dishonesty, can also face penalties.
These penalties are typically equal to the rewards the attestor would have received had they submitted them.
In more severe cases, validators can be slashed for actions that are considered direct attacks on the network, such as double signing where the validator proposes and signs two different blocks for the same slot; or double voting where the validator attests to two candidates for the same block.
In these cases, 1/32 of their staked ETH up to a maximum of 1 ETH is immediately burned, then a 36 day removal period begins.
*Varies based on the total number of validators in the network. Approximated for 435,000 active validators
Conclusion
Ethereum validators play a pivotal role in securing and maintaining the network by proposing and attesting to new blocks, finalizing the blockchain’s state, and ensuring its overall health and integrity.
As the network evolves, validators will play an increasingly crucial role in securing the network and fostering its growth. The journey of a validator promises to be both rewarding and challenging, as well as an opportunity to contribute to the future of Ethereum and DeFi.
Rocket Pool is a decentralized Ethereum staking platform that allows users to stake their ETH and earn rewards while contributing to the security and stability of the Ethereum network.
Built with the aim of democratizing access to staking, Rocket Pool offers a simple and user-friendly solution for both large-scale and small-scale investors. By employing a decentralized architecture, the platform ensures transparency and trust for its users.
There are two main ways to stake ETH with Rocket Pool – stake through liquid staking via rETH or alternatively, operate minipools by being a Rocket Pool node operator.
Staking with Rocket Pool. Source: Messari.
How to stake with Rocket Pool directly
Staking with Rocket Pool is simple through its web interface, offering rETH at the best possible value without extra fees or liquidity issues.
You can deposit as little as 0.01 ETH and receive the rETH liquid staking token which accrues staking rewards over time – there is a 0.05% deposit fee when minting rETH through the protocol, which prevents attacks around rate updates.
rETH represents both how much ETH you deposited, and when you deposited it. It includes rewards that Rocket Pool node operators earn from:
The Beacon Chain itself
Priority fees from block proposals
MEV rewards from block proposals
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rETH’s value always increases relative to ETH and the exchange rate is updated approximately every 24 hours
On the back, your ETH is staked with a decentralised network of node operators which earn ETH rewards which fully accrue to rETH holders. Node operators do not handle funds and any penalties incurred by node operators are taken from their earnings.
Alternatively, you can simply swap your ETH for rETH with a DEX like Balancer and Uniswap or DEX aggregator. rETH is available for swapping on both Ethereum and Layer 2 networks like Optimism, which may potentially offer improved rates with lower slippage and fees.
How to Stake with Rocket Pool as a node operator
The other more complicated way to stake with Rocket Pool is by running a Rocket Pool node, which has more benefits than staking directly, although it is far more complicated.
Node operators put ETH from the staking pool to work by running minipools with it, i.e. run validators with the highest quality possible, and maximize staking rewards. This involves setting up physical or virtual computers, configuring them, installing Rocket Pool client, setting up minipools, securing it and maintaining them.
In return for doing so, node operators earn rewards a pro-rated share of the validator’s total ETH rewards, plus an extra 14% commission paid by the pool stakers’ share. In addition, they also interest on the RPL staked as supplemental insurance.
Node Operator requirements
To run a Rocket Pool node, you must first choose a platform: a local node or a virtual private server (VPS) on the cloud.
Local node requirements
Running a local node provides complete control, no monthly fees, and contributes to decentralization but requires stable, uncapped internet and electricity, and involves responsibility for network and computer security.
You may use a PC, mini-PC or NUC device for a local node, as long as they meet the minimum requirements for running a node.
Hardware Requirements:
CPU: A modern CPU with at least 4 threads is recommended. Intel NUC devices are popular, but ensure they’re recent (e.g., 11th generation i5 unit). ARM-based CPUs like Mac M1 or M2 don’t require the BMI2 extension.
RAM: 8 GB of RAM is the minimum, but more RAM offers headroom and support for RAM-heavy clients. The RAM type (DDR3 or DDR4) isn’t critical, as DDR3 is usually sufficient.
Ethereum validators aren’t computationally expensive, so most setups, including mini-PCs and NUCs, can run an unlimited number of validators.
CPU usage is most significant during initial blockchain sync and isn’t heavily used afterward. A stable Internet connection is essential, and a stable electricity supply is preferred, although it can be mitigated with a large UPS (backup battery).
VPS node requirements
Running a Rocket Pool node using a virtual private server (VPS) can be done through traditional VPS hosting or cloud hosting.
Traditional VPS hosting is cheaper and more decentralized, but with limited high-availability support and fixed resources. Notable VPS providers include OVH, Leaseweb, Contabo, and Netcup.
Cloud hosting, on the other hand, offers high availability and flexibility in resource allocation but is more expensive and less decentralized. The top three cloud providers are Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP).
Node setup and configuration
You’ll need to choose an execution and consensus client for your Rocket Pool node, and configure Rocket Pool to connect to them.
Rocket Pool supports three different Execution clients: Geth, Besu, and Nethermind.
Running an Execution client involves storing a copy of the Execution layer blockchain on your machine. It interacts via peer-to-peer communications with other EC nodes to record and verify new blocks and transactions. A full Execution client is required to run a validator.
You will also need to setup a Consensus client, and Rocket Pool supports up to five Consensus clients: Lighthouse, Lodestar, Nimbus, Prysm, and Teku. All five clients are relatively low-risk and low-maintenance, and will generate practically identical total rewards from validation.
By default, the Rocket Pool installer will offer to select a random consensus client for you. This will help contribute to the overall diversity of the network.
The whole process above can be configured either via Docker if you have clients you manage outside of the Smartnode for solo staking, or via native Smartnode.
Starting the node service
Once your node is fully configured, including the Smartnode stack, an Execution and an Consensus client, you’re ready to create a Rocket Pool node and begin staking.
Start the stack and sync up your nodes with the state of the blockchain.
rocketpool service start
rocketpool node sync
Then create a new wallet or use an existing wallet where it will hold your node’s funds – for sending ETH to your minipool, pay for gas during various transactions, and other various operations.
To create a new wallet, run the following command.
rocketpool wallet init
If you already have a wallet you’d like to use for your node, or if you’re recovering a wallet you already created with the Smartnode earlier, run the following command instead.
rocketpool wallet recover
You should also finish configuring the node, including loading your Node Wallet, registering it with the Network and changing the withdrawal address.
rocketpool node register
rocketpool node set-withdrawal-address <your cold wallet address or ENS name>
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The withdrawal address is where all RPL checkpoint rewards, staked RPL, and your ETH will be sent to when you claim your rewards or exit your validator and withdraw from your minipool.
Withdrawal addresses are set at a node operator level. If you create multiple minipools, they will all refer to the same withdrawal address so you only need to perform this setup once.
Creating minipools
A minipool in Rocket Pool is a smart contract instance on the Execution Layer chain managed by your node.
It combines a portion of your ETH (bond amount) and ETH from the rETH staking pool (borrowed amount) to form 32 ETH, which is then sent to the Beacon Chain deposit contract to create a new validator.
Stake RPL
To create a validator using Rocket Pool, you must first create a minipool by staking your RPL collateral, either through the website or CLI.
If you’re staking via CLI, run the following command.
rocketpool node stake-rpl
The minimum and maximum amounts depend on your desired bond size, with the exact RPL amount changing based on the ETH/RPL price ratio. There is no maximum stake, but only the first 150% of your bonded ETH at each checkpoint earns rewards.
Note that the RPL stake is handled at your entire node level (not minipool level), so you only need to manage the total RPL stake for your node when running multiple minipools.
Deposit ETH and spin up a minipool
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Potentially arbitrage the market rETH premium with RocketArb
Once you’ve staked RPL, it’s time to spin up a minipool using the command.
rocketpool node deposit
Note the costs for deploying a minipool. Once the transaction completes, you will be given the address of your new minipool contract.
Upon creation, your minipool will be put into the initialized state and it remain here until it’s your turn in the Rocket Pool queue to be given the remaining 16/24 ETH from the staking pool so you can stake your new validator on the Beacon Chain.
Once that happens, your minipool moves to the prelaunch state for 12 hours before the staking state, where ETH from the staking pool will be sent to the deposit contract.
To check the status or view the public key of your minipool, use the following command.
rocketpool minipool status
If you wish to host more minipools, there is no need to create a new node. Just run the rocketpool node deposit command, although you need to ensure that the RPL staked is sufficient (10% of borrowed ETH).
Next steps
You’re almost done with the Rocket Pool setup at this point. What’s left to do is to ensure your node is healthy and running.
One key resource is beaconchain to view metrics about your validator and set up email alerts such as missed attestations, Rocket Pool reward rounds and RPL collateralisation status on your node.
You can also view metrics on Rocketscan which is a community resource for an overview of both the entire Rocket Pool network and your node performance.
Staking is a mechanism that allows you to earn rewards in exchange for helping to secure the blockchain.
In a nutshell, it’s a process where you can delegate your tokens to validators who secure the blockchain by validating transactions on proof-of-stake networks like Ethereum.
By staking your tokens, you are backing a specific validator to only certify valid transactions, and in return, a portion of the network fees are distributed back to validators and those who delegate their tokens to them.
Staking may be as simple or complicated depending on your preference – do you want to run a dedicated blockchain node yourself, or are you good with just earning rewards and letting someone else do the hard work of setting up and maintaining the infrastructure.
Nevertheless, let’s take a look at an overview of the process.
Step-by-step guide on how to stake Ethereum
Step 1: Buy or obtain ETH
Before you begin staking, you need to make sure that you have ETH available to stake.
If you want to stake ETH solo, it requires a minimum of 32 ETH to participate – this is required by the Ethereum blockchain, as a validator has the ability to propose and attest to blocks for the network.
To prevent dishonest behaviour, users must have their funds at stake where the protocol can penalize malicious actors. Staking is a means to keep you honest, as your actions will have financial consequences.
If you have less than 32 ETH, you can still participate in staking by pooling your funds with other users.
You can obtain ETH through any popular centralised exchange service like Binance, Coinbase, Gemini, Kraken, Bybit etc – we have referral links at the bottom of the article where you can get discounts on trading.
Step 2: Choose a staking service
There are several options available for staking Ethereum, including using a staking service provided by a centralized exchange, a decentralized staking platform, or running a validator node yourself.
Option 1: Staking with a centralized exchange
One of the easiest ways to stake Ethereum is to use a staking service provided by a centralized exchange.
These 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.
For example, Coinbase offers cbETH, which is a secure and liquid ETH staking token that lets you earn Ethereum staking rewards without lockups.
This option is convenient, as it allows you to stake your Ethereum without the need for technical knowledge or hardware. However, it also comes with some risks, such as the exchange being hacked, as we have seen relatively often.
Option 2: Pooled staking with a decentralized staking pool like Lido or RocketPool
Decentralized staking pools like RocketPool or Lido allow you to stake your Ethereum with a pool of users, since this functionality is not natively supported within the protocol, solutions had to be built out separately to address this need.
They are a collaborative approach to allow many with smaller amounts of ETH to obtain the 32 ETH required to activate a set of validator keys.
Most of these pools operate using smart contracts, where funds can be deposited to a contract, which trustlessly manages and tracks your stake and issues you a collateral token that represents this value.
For example, RocketPool issues rETH, while Lido issues stETH – liquid staking derivatives – in exchange for your ETH. These tokens grow in value over time, as they accrue rewards from staking. Furthermore, these tokens can be used in DeFi, allowing you to realise value.
This option is more secure than using a centralized exchange, as it eliminates the risk of the platform being hacked or engaging in malicious behaviour. However, you shift the risk towards smart contract bugs with these liquid staking platforms.
Option 3: Running a validator node by yourself
If you have the technical knowledge and resources, you can choose to run a validator node yourself.
This option is the most secure, and it is also deemed the gold standard for staking as it allows you to have full control over your Ethereum node, provides full participation rewards, improves the decentralization of the network, and never requires trusting anyone else with your funds.
However, it also requires significant technical knowledge and resources, as you need to run your own hardware and maintain your own node. It may cost anywhere from US$200 to $1500 per month to buy the necessary hardware to operate a node and establish redundancy services so that your node doesn’t go offline.
Step 3: Stake your Ethereum and collect rewards
Once you have chosen your approach, you can stake your Ethereum by following the instructions provided by the service.
This typically involves sending your Ethereum to the staking service, locking it up for a certain period of time, and participating in the network’s decision-making process. In exchange, you will receive rewards in the form of newly minted tokens and transaction fees.
For most staking services, rewards will automatically accrue to your liquid staking position – either through a rebase of the token where the quantity of the token goes up, or the exchange rate at which you can swap the token for more ETH.
Stake by swapping for LSDs on exchanges
The most straightforward way to stake ETH is to simply swap ETH for liquid staking derivatives (LSDs) like rETH and stETH. This allows you to hold the LSD itself which accrues staking rewards.
You can do so either via an exchange that lists rETH or stETH. For example, Huobi, Bybit and MEXC list stETH.
Alternatively, you should be able to obtain rETH and stETH on DeFi exchanges like Uniswap, Balancer or Curve.
Stake LSDs via a decentralized front-end
Since most liquid staking protocols are decentralized, technically any third-party service can build front-ends to route traffic and liquidity to them.
Metamask recently launched a service where you can stake ETH with Lido and Rocketpool directly from your Metamask wallet.
This is just a more convenient option instead of finding individual decentralised staking pools on multiple websites and exposing yourself to scams.
However, while the service is currently free now, Metamask might charge a convenience fee in the future.
Ethereum staking is a process that enables network participants to earn rewards for contributing to network consensus.
You can obtain Ether (ETH) tokens and lock them up via a smart contract to validate transactions and secure the network, a process known as proof of stake (PoS).
Approaches to staking ETH can be broadly categorized into four primary groups, including solo staking, staking-as-a-service providers, staking on a centralized exchange, and using a liquid staking protocol.
Solo staking
Solo staking is the only Ethereum protocol-native way to stake ETH, requiring an individual to manage all aspects of staking and participating in network consensus directly.
This includes running a full Ethereum node, depositing 32 ETH to activate a validator client, selecting the client implementations for the execution and consensus layers, and maintaining constant internet connectivity and sufficient bandwidth.
Although solo staking generally provides the highest returns, it requires technical knowledge and can result in lower returns if the staker fails to keep the validator online and performant.
SaaS staking
Staking-as-a-service (SaaS) providers such as Allnodes, Kiln and BloxStaking assume the operational complexities of managing a validator.
SaaS providers charge a monthly fee or management fee that is generally a percentage of the staking returns generated. ETH stakers can leverage SaaS providers on a non-custodial basis, allowing them to maintain control over their private keys.
However, there are embedded trust assumptions that the SaaS provider will maximize rewards and avoid penalties and slashings. SaaS options may have additional code wrapping the Ethereum clients that is not open or auditable.
CEX staking
Many centralized exchanges (CEXes) such as Coinbase, Binance and OKEx also provide staking services similar to SaaS providers.
Centralized exchanges pool together client assets and manage validators on behalf of the pooled ETH in aggregate, allowing users to stake ETH without any account minimums in most cases.
The ETH staked on a centralized exchange are held in the exchange’s wallet, so this staking method is custodial as the exchange holds the private keys. Whether this is a good or bad thing depends on your ethos for self-custody and whether you can trust the exchange that you’re staking with.
Liquid staking
Liquid staking applications like Lido, Rocket Pool, Frax and StakeWise enable users to earn staking rewards with improved liquidity compared to previously covered offerings while still outsourcing the burdensome node management responsibilities.
Liquid staking solutions leverage smart contracts on Ethereum to create liquid, tokenized (wrapped) representations of the ETH staked on the Ethereum network.
These tokenized staking deposits are frequently referred to as liquid staking derivatives (LSDs), and they represent a tokenized claim on staked ETH. However, liquid staking solutions are still relatively new, and there are potential risks and challenges involved including smart contract risks.
Conclusion
CEX staking and liquid staking providers are likely to attract the majority of incremental demand for staking as they offer increased rewards at reduced complexity for stakers.
Providers prioritizing decentralization and yield leverage like Rocket Pool may also gain further traction as integrations grow and the liquidity gap between stETH and rETH decreases, although the inherent complexity of running a node may deter some.
Overall, as rewards and decreased risks incentivize staking participation, we expect the amount of ETH staked in the network to continue growing.
Arbitrum has two versions of technology on separate networks. This guide details Metamask setup for Arbiturm Nova. For Metamask setup for Arbitrum One, click here.
Connecting MetaMask to Arbitrum Nova
Switch the connected blockchain by clicking on the tab saying Main Ethereum Network, we need to add Arbitrum Nova, which is different from Arbitrum One.
Scroll down until you find Add Network.
Enter in the Arbitrum Nova settings as follows:
Network name: Arbitrum Nova
RPC URL: https://nova.arbitrum.io/rpc
Chain ID: 42170
Currency: ETH
Explorer: https://nova-explorer.arbitrum.io
Click Save.
You have now connected to the Arbitrum Nova with your Metamask Wallet!
Transactions on the Arbitrum Nova requires ETH which will be used as gas fee.
Stakefish, a staking provider for Ethereum, has announced that it will be implementing zero protocol fee for staking starting from the Shanghai hardfork on April 12, 2023.
This means that stakers will be able to earn 100% of protocol rewards and up to 75% in priority and MEV fees. Unlike other staking providers, Stakefish will not be basing their fees on protocol rewards, setting a new benchmark in the industry.
Existing users who have been staking with Stakefish since December 1, 2020, will continue to receive 100% of their protocol rewards and have only been charged a 20% priority/MEV fee.
One advantage of this fee structure is that stakers can enhance their returns during periods of high protocol APR.
Stakefish is discontinuing early access for NFT users in favor of a more straightforward fee structure. NFT users will pay zero protocol fees and a slightly increased priority/MEV fee of 25% starting from the Shanghai hardfork.
New users who stake with Stakefish during the promotional period following the Shanghai hardfork will pay zero protocol fees and a 25% priority/MEV fee.
The company plans to raise the priority fee/MEV fee nominally in the future, but the timing will be determined based on market conditions.
