Ethereum Staking: Earning Passive Income On The Blockchain
Ethereum, the second-largest cryptocurrency by market cap, made a monumental shift from Proof-of-Work (PoW) to Proof-of-Stake (PoS) with the launch of Ethereum 2.0—or more accurately, “The Merge” in September 2022. This change opened the door to a new way for ETH holders to earn rewards: staking.
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🕒 11:24 AM
📅 Apr 09, 2025
✍️ By rojahthat
What is Ethereum Staking?
Staking is the process of locking up your ETH to help secure the Ethereum network and validate transactions. In return, you earn rewards—kind of like earning interest on a savings account, but with a decentralized twist.
Instead of relying on energy-intensive mining, Ethereum now relies on validators—people who lock up (or "stake") 32 ETH or more to propose and verify new blocks. This is more energy-efficient and scalable for the long term.
How Do You Stake Ethereum?
You have several options depending on how much ETH you own and how hands-on you want to be:
1. Solo Staking (32 ETH minimum)
Run your own validator node.
Requires technical know-how, reliable hardware, and internet uptime.
Full rewards go to you.
2. Staking-as-a-Service
Delegate your 32 ETH to a third-party provider who runs the validator for you.
You keep ownership of your ETH while someone else handles the tech.
3. Pooled or Liquid Staking
Ideal for those with less than 32 ETH.
Use platforms like Lido, Rocket Pool, or Coinbase to stake any amount.
You receive a token (e.g., stETH) that represents your staked ETH and can be used in DeFi.
What Are the Rewards?
Staking yields vary, typically between 3–6% annually, depending on how much ETH is staked across the network. These rewards are paid in ETH, compounding your holdings over time.
Risks to Consider
Like any investment, staking comes with risks:
Slashing: If your validator misbehaves (goes offline or acts maliciously), a portion of your ETH can be slashed.
Lock-up periods: Depending on the method you choose, your ETH might be locked for a certain period.
Smart contract risk: Especially with liquid staking platforms—if there’s a bug, funds could be at risk.
Why Stake?
1. Earn Passive Income: Let your ETH work for you.
2. Support the Network: Help secure and decentralize Ethereum.
3. Eco-Friendly: Staking is far less energy-intensive than mining.