What Are The Benefits And Different Ways Of Staking Ethereum

• Anyone can become a single validator of the Ethereum network if they have 32 Ethereums.
• Validators earn staking rewards for their efforts and capital.

What is Staking?

Staking is the simple process of disposing of a certain amount of Ethereum on the Ethereum network. This makes the user the validator of the network now they have the power to store the data of the Ethereum blockchain, process the transactions of the blockchain and even add new blocks to the network.

The current staking amount is 32 ETH which is equivalent to $57153.60. They need at least this amount to become a stalker. Currently, there are 23,354,104 Ethereum stacked and the total number of validators is 734,181. The more the number of validators, the stronger the Ethereum network will become.

What are the Benefits of Staking Ethereum?

1. Earn Rewards

When the user becomes a validator, their task is to run the network and keep the system up-to-date. By constantly verifying the transactions and adding new blocks to the network. For performing all these duties a validator gets rewards. This reward is generated from the transaction fees that the user pays to process the transactions.

2. Better Security

The security of the blockchain is indirectly proportional to the Ethereum stake. The more the number of Ethereum will be staked less chances will be there that anyone can control all the transactions. Because if a validator stakes more than 50% of the total stake in Ethereum then they will gain the ability to control the network. Hence the number of stakers more the security of the network.

3. Sustainability

Since Ethereum uses a proof of stake consensus algorithm this makes validating Ethereum transactions very energy efficient and hence the energy required to be a validator is much less. A user can validate transactions with a computer with normal specifications. This means they neither need to invest in high-end hardware nor pay high bills of electricity.

How to Stake Ethereum?

There are multiple ways of staking the Ethereum. All are discussed in detail below.

1. Solo home staking

It is considered the best way of staking the Ethereum because it is most impactful, providing the validator full control. Validators can enjoy the full rewards of validating the currency as well and it being trustless means the validator does not need to trust anyone with their assets. 

Those people who want to become a solo validator need at least 32  Ethereum to stake and a computer with 24/7 internet and power supply which is very important because a failure in processing transactions can even result in slashing which is a punishment for failure in processing the transactions or processing false transactions.

2. Staking as a service

If they have 32 Ethereums to stake but they don’t want to deal with the complications of using hardware and running it all the time then staking is the perfect solution for them. The user earns a native block reward for staking their Ethereum. But in this staking process, they need to trust the node operator with their assets.

3. Pooled Staking

If the user does not have 32 Ethereum and still wants to become a staker then pool staking is just for them. Because in this type of staking all they need to do is to provide liquidity to the pool and then they will earn a block reward in return. They can exit anytime in this staking process.

4. Centralized exchanges

Another way of staking Ethereum is using centralized exchanges but this comes with a tradeoff. It is possible that if more and more people start using centralised exchanges they may gain control of the network and start verifying false transactions.