Ethereum (ETH) is the second-largest cryptocurrency by market cap after Bitcoin. Recently, Ethereum has been making waves as it shifted from proof of work (PoW) to proof of stake (PoS) consensus mechanism, allowing anyone to earn passive income by staking ETH. In this article, we will explore the world of staking and its benefits and risks, as well as share tips for finding a trustworthy staking platform. From security to fees and reputation, we will cover all the factors you need to consider when searching for a reliable staking platform.
How to Stake Ethereum
There are multiple options available for users who want to participate in Ethereum staking, ranging from solo staking to staking-as-a-service and pooled staking. These options target a wide range of users and ultimately are each unique. They vary in terms of risks, rewards, and trust assumptions. Some are more decentralized, battle-tested, and/or risky than others. For those who do not feel comfortable holding their own keys, there are options available to delegate the hard part while still earning native block rewards. For example, Coinbase is a top exchange that offers an Ethereum staking program for users who do not want to run their own node. As for wallets, Ledger is an optimum choice for staking ETH.
Staking Via Cryptocurrency Exchanges
Here are the steps to stake Ethereum via a crypto exchange, such as Binance:
Step 1: Sign up for an account. The first step is to sign up for an account on the exchange. This typically involves providing personal information, verifying your identity, and setting up a payment method to purchase ETH.
Step 2: Purchase ETH. Once your account is set up, you will need to purchase Ethereum. This can usually be done through a variety of payment methods available on the exchange, such as bank transfer, credit card, or debit card.
Step 3: Transfer ETH to the exchange's staking program. Once you have ETH in your exchange's wallet, you should be able to find an option to stake ETH within the wallet itself. The specific steps may vary depending on the exchange, but typically you will need to navigate to the staking section of the wallet and follow the instructions to stake your ETH.
Step 4: Choose your staking options. The next step is to choose your staking parameters, such as the amount of ETH you want to stake and the length of time you want to stake it for.
Step 5: Start staking and earning rewards. The rewards will typically be added to your account periodically, depending on the specific staking program and its payout schedule.