Ethereum is one of the most popular decentralized blockchain platforms and the second-largest cryptocurrency after Bitcoin. It was recently upgraded to Ethereum 2.0, which allows users to stake crypto and earn rewards in ETH.
To stake and earn rewards, users are required to use an on-chain wallet or staking platform. In this article, we will clarify everything you need to know about staking Ethereum 2.0 and the best staking platforms.
Top Places to Stake ETH in 2023
Binance is undoubtedly our TOP choice for staking Ethereum. The platform introduced ETH 2.0 staking to let users invest if they have less than 32 ETH coins. You just need to register and deposit the minimum of 0.1 ETH and you can start staking. Besides staking, users can use a wide array of features, including leverage trading in the futures market or earning interest on other coins.
To start staking, you will need to convert ETH coins into BETH, which represents the staked ETH on a 1:1 ratio. For example, if you stake 50ETH, it will be converted into 50BETH, which will remain locked until Phase One is complete.
A great thing about Binance is that it distributes all on-chain rewards to users that stake ETH 2.0 completely free, without any fees. However, note that staking Ethereum 2.0 is not supported for US users.
- Great for beginners
- Easy to use
- You will receive rewards with NO fees
- Not supported in the US
Coinbase is a great choice if you want a simple, intuitive, easy-to-use platform to buy, trade, store, or sell digital assets. The platform introduced Ethereum 2.0 staking on April 15, 2021, and allows you to earn up to 5% APY for staking ETH. There is also a feature of ETH 2.0 staking on Coinbase Prime for institutional investors.
The only downside of Coinbase is that it’s limited to the US only, and existing users who live outside the US won’t be able to earn rewards for staking. If you are an eligible user, once you register you will be put in a queue or “waitlist”. Once there is a staking position available, the platform will send you a notification. A great thing about Coinbase is that there is no minimum amount for ETH 2.0 staking, which makes it excellent for beginner traders to get started.
- Simple and intuitive platform
- No minimum amount is required for ETH 2.0 staking
- Limited to the US only
Since its foundation, Kraken has become one of the leading crypto exchange platforms in several countries. It has a reputation as a platform that is easy to use, safe, and offers competitive pricing, suited for experienced investors.
The platform offers 12 different coins, and of course, allows its users to stake ETH 2.0 to earn rewards. The staking system is similar to Binance; while Binance issues a BETH token, Kraken provides a trading pair ETH2.S/ETH. Basically, Kraken allows users to trade staked ETH coins for un-staked ETH. However, keep in mind that this platform is not available in the US and Canada.
When you purchase ETH for staking, there is a 20-day resting period before you can start earning rewards. Note that the resting period can differ depending on the network traffic. When you start earning rewards, they will be shown on the Kraken Earn page. However, like in most exchanges, you will not be able to withdraw the money until Ethereum 2.0 is live.
Note that Kraken has an administration fee of 15% which will affect the staking return of 5-7% APY. Also, the reward rate is determined by the ETH network and can vary based on different factors not related to the Kraken platform.
- Safe and easy to use
- A great choice for beginners
- Not supported in the US and Canada
eToro is one of the leading platforms for crypto, stocks, and CFD trading. Since 2021, the platform allows its users to stake ETH, but there is a minimum amount of $25 to start staking.
Unlike a fixed or flexible rate, eToro uses a tiered staking reward system. Depending on your membership, you can earn 75%, 85%, or 90% of staking rewards. However, compared to platforms such as Binance which have no fees for staking, fees on eToro are quite high. Another thing to keep in mind is that staking on eToro is not supported in the US.
The benefit of using this platform is its simplicity and the company’s trustworthiness.
- Very simple and easy to use
- Fees are quite high
5. Huobi Global
Huobi Global is a safe and easy-to-use crypto platform where you can trade over 600 different coins. The company recently introduced a new feature called Huobi Earn, on which you can stake different coins, including ETH. To stake ETH, you will need to deposit a minimum amount of 0.1 ETH, which is a great alternative for small investors and beginners, compared to running an Ethereum Node.
Staking on this platform is very similar to Binance, meaning that you will need to convert ETH to BETH, which can then be traded with BETH/USDT and BETH/ETH pairs. The Huobi Global blog claims the platform charges ZERO fees.
- Minimum deposit of 0.1 ETH
- HPT airdrop bonus after the BETH holdings snapshot
- No fees for staking
- Registering for the platform is a bit long process
OKX is a popular crypto exchange platform that offers multiple options to invest in ETH and earn rewards, which range from 0.5% to 13.5% APY. For existing users, the platform supports ETH 2.0 Proof-of-Stake upgrade and requires a minimum deposit of 0.1 ETH to get started.
Like Binance and Huobi, there are absolutely no staking fees, meaning that OKX covers all expenses including Ethereum 2.0 node equipment. Therefore, all the rewards are passed directly to you, which are currently 5.89% APY. The only thing we don’t like about this platform is the bad customer support.
- No fees for staking
- Simple and easy to use
- Bad customer support
Bitfinex is a well-known crypto platform that offers a variety of assets to work with. The platform recently launched its own staking service which allows you to earn passive rewards in 10 different coins, including ETH.
There is no minimum deposit to stake ETH, and there are also no fees for staking. However, note that staking on Bitfinex is not available to US and Canadian residents.
- No fees
- No minimum deposit
- You can earn rewards in 10 different coins
- Not available in the US and Canada
What is Ethereum 2.0?
The final upgrade of the Ethereum network, Ethereum 2.0 uses a Proof-of-Stake model which runs on the Beacon Chain. The upgrade can be split into three phases, all designed to increase scalability and transaction speed, lower fees, and improve the overall security of the platform.
The PoS model uses complex algorithms to choose a node to validate and process a block of transactions. It is very different from the current method which uses nodes that require a large amount of power. Shifting to Ethereum 2.0 will significantly reduce the energy requirements of miners by up to 99.95%.
What does Staking Ethereum 2.0 mean?
If you decide to lock up ETH, you will basically contribute to the security and governance of the network. By depositing ETH, you become an “Ethereum Staker” responsible for processing transactions and adding new blocks to the blockchain network. You will receive staking rewards or a return on your investment in ETH for processing those transactions. As you can notice, staking Ethereum is very similar to Bitcoin mining and lending where you earn passive income in crypto.
How Much Can You Earn Staking Ethereum?
You can earn approximately 5-6% APY for staking ETH, but earning is also based on the amount of the coin that is locked for staking. The staking rewards are correlated with the amount of ETH staked and the number of validators on the network.
If the total amount of staked ETH drops, the rewards will increase to encourage people to deposit ETH and become validators. In contrast, if the amount of staked ETH increases, the rewards will decrease. Considering the current number of participants and the growing value of the network, Ethereum 2.0 is the best choice for earning money through crypto staking.
Now let’s consider some statistics. In 2020, the total amount of Ethereum coins locked for staking was around 500,000 ETH and the average APY was 20% throughout the year. Compared to 2021, the amount of staked coins increased to over 6,000,000 Ethereum coins which reduced the average reward to 6% APY.
However, there are two things you should keep in mind. Besides the rewards for staking, you will also get a small portion of network transaction fees each day. Note also that fluctuation in APY is the main risk associated with staking any crypto.
How Much ETH Do I Need to Stake?
To become a full validator on Ethereum 2.0, you will need to stake at least 32 ETH, which is currently worth more than $100,000. However, if you don’t have that amount or you don’t have the proper hardware, you can join an ETH2 pool.
You can also use a crypto exchange platform such as Coinbase or Kraken. That way, you can begin staking without the required minimum of ETH. However, keep in mind that the platform will take a cut or fee which can be as high as 15%.
Another thing to keep in mind is that staked rewards won’t be paid until Ethereum 2.0 is live. The coins will remain staked until Phase 1 is finished, and you won’t be able to use or withdraw them. On the other hand, certain exchange platforms such as Binance and Kraken have created coins that represent staked Ethereum coins on a 1:1 basis. You can use those coins for withdrawing or trading purposes.
How to Stake Ethereum 2.0?
There are two ways to stake Ethereum 2.0. You can either run an Ethereum node or use a crypto exchange.
Running an Ethereum Node
If you are able to buy 32 ETH for staking, then running a full network node and becoming a validator would be the obvious choice. In return for processing transactions and adding new blocks to the blockchain, you will receive passive staking rewards.
When you become a validator, you will need to install ETH 1.0 and ETH 2.0 clients on a computer that has specific hardware specifications to run the software on a 24/7 basis. However, note that the required configuration of both hardware and software can be quite challenging for non-technical investors.
Not having the proper configuration can lead to certain risks, such as losing ETH or failing to validate transactions. On the other hand, the benefits of staking ETH by running an Ethereum node include higher rewards for staking.
Using a Crypto Exchange
Using a crypto exchange or a staking pool is the easiest way to begin staking on Ethereum 2.0, especially if you are a beginner who doesn’t have the required technical knowledge, or is unable to buy the minimum of 32 ETH for staking. Crypto exchange platforms will charge a fee of between 15% and 25% depending on the platform. Using one of these platforms is also the easiest way to buy ETH which you can then use for staking.
Where to Stake Ethereum with Less than 32 ETH?
If you have less than 32 ETH, you can stake Ethereum by using a cryptocurrency exchange. The best options are listed above.
These are the best platforms that you should definitely consider if you intend to stake Ethereum. Although Binance is our top choice, make sure to check them all out to find the platform most suitable to your needs.
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