There are several ways to earn a return on your ETH, including lending them out to custodial providers or through decentralized lending protocols, running your own validator, using a validator as a service, staking via a pool, or staking on centralised exchanges.For the best security and control over your funds, we recommend using a Ledger Hardware Wallet.
It all depends on how much you are willing to stake. You will need 32 ETH to activate your own validator, but it is possible to stake less.
There are four main options to stake your ETH:
- Solo home staking (Run a validator)
Solo staking on Ethereum is the gold standard for staking. It provides full participation rewards, improves the decentralization of the network, and never requires trusting anyone else with your funds.
Those considering solo staking should have at least 32 ETH and a dedicated computer connected to the internet ~24/7. Some technical know-how is helpful, but easy-to-use tools now exist to help simplify this process.
Learn more about solo staking here.
- Validator as a service
If you don’t want or don’t feel comfortable dealing with hardware but still want to stake your 32 ETH, staking-as-a-service options allow you to delegate the hard part while you earn native block rewards.
These options usually walk you through creating a set of validator credentials, uploading your signing keys to them, and depositing your 32 ETH. This allows the service to validate on your behalf.
This method of staking requires a certain level of trust in the provider. To limit counterparty risk, the keys to withdraw your ETH are usually kept in your possession.
Learn more about staking as a service here.
- Staking pools
Several pooling solutions now exist to assist users who do not have or feel comfortable staking 32 ETH. Many of these options include what is known as ‘liquid staking’ which involves an ERC-20 liquidity token that represents your staked ETH.
Liquid staking enables easy and anytime exiting and makes staking as simple as a token swap. This option also allows users to hold custody of their assets in their own Ethereum wallet. Pooled staking is not native to the Ethereum network. Third parties are building these solutions, and they carry their own risks.
View our Step-by-Step guide on how to Staking with Rocketpool here.
Learn more about staking pools here.
- Centralised exchanges
Many centralized exchanges provide staking services if you are not yet comfortable holding ETH in your own wallet. They can be a fallback to allow you to earn some yield on your ETH holdings with minimal oversight or effort.
The trade-off here is that centralized providers consolidate large pools of ETH to run large numbers of validators. This can be dangerous for the network and its users as it creates a large centralized target and point of failure, making the network more vulnerable to attack or bugs.
