As the Ethereum merge approaches, we will walk you through the simple process of staking Ethereum using Lido Finance.
Not everyone has the 32 ETH needed to bet directly on the Beacon Chain or Phase 0 of the network transition to Ethereum 2.0 and a Proof-of-Stake (PoS) consensus mechanism.
To cater to this community of small token holders, a number of projects have emerged that allow users to wager any amount they wish. In addition, you can still earn a small income from these stocks.
Some of the top services offering low-volume staking include RocketPool, Stafi, Lido, and various cryptocurrency exchanges. The performance of each service will vary, of course, but it’s all relatively simple.
Let’s dive specifically into Lido Finance because it has become the most popular staking service according to Dune Analytics, hosting over 32% of all 12.7 million Ethereum stakes on the Beacon Chain. In dollar terms, that means Lido is currently home to $24.3 billion at current prices.
The staking process on Lido is simple.
Click the Bet Now button and go to the Bet section. From there, you can choose from several proof-of-stake networks, including Solana, Kusama, Polygon, and Ethereum’s Beacon Chain.
After selecting Ethereum, you will be asked to connect a Web3 wallet such as Coinbase Wallet, WalletConnect, or MetaMask, among others.
A word of warning: if you’re messing around with Aribtrum, Fantom, or Avalanche, don’t forget to return to the Ethereum mainnet in your wallet! Lido does not currently support these networks, so using capital may result in a permanent loss of money.
Your screen should look like this:
The ticker “stETH” you see here stands for “Stake ETH” and is the token you receive after depositing your Ethereum.
It’s like a receipt showing that you’ve locked ETH to Lido, but it also means you can put that stETH to work elsewhere in crypto (like minting the DAI stablecoin in Maker, for example).
This is because stETH has real monetary value as it attempts to track the price of Ethereum. Currently, however, the tiered version of Ethereum is trading at a slight discount to the original Ethereum, according to Curve Finance.
Once set, you can stop there. Earning 4% is quite a generous income for such a simple task. Furthermore, this yield is expected to increase once Ethereum completes its planned August upgrade.
“By merging with the Proof-of-Stake chain, fees previously earned by miners are now earned by those who wager. This should result in betting rewards between 7% and 12%,” writes Lucas Outumuro of IntoTheBlock.
If you’re feeling extra ambitious this US bank holiday weekend, give it a go.