Having been in the cryptocurrency space for many years, I have witnessed the growth of ETH from a niche token during the ICO era to the second-largest cryptocurrency by market capitalization. The staking mechanism after the merge is no longer a simple 'deposit to earn interest', but a precise game concerning ecological power and profits.
The essence of staking: from 'mining' to 'holding tokens for power'.
The core of ETH staking is to participate in maintaining blockchain consensus. In the past PoW era, miners competed for bookkeeping rights through computing power; now, under the PoS mechanism, staking 32 ETH allows one to become a validating node, earning rewards by packaging blocks and validating transactions. This essentially transforms 'hardware mining' into 'capital voting'. Although ordinary people may not reach the 32 ETH threshold, they can participate in staking through platforms like Ld and Cb (starting from a minimum of 0.01 ETH), which is essentially 'pooling funds to share profits'.
Currently, the total amount of staked ETH on the network has surpassed 30 million ETH, accounting for 25% of the total circulation, with annualized returns stabilizing between 4%-5%. However, there are hidden intricacies within these returns: besides the base rewards, there are block proposal fees and MEV (maximum extractable value) sharing, with daily returns exceeding 10% during extreme market conditions.
The art of balancing risk and return.
A common pitfall for beginners is only looking at returns without considering the locking rules. ETH staking has an 'exit buffer period', and currently, the longest wait in the exit queue can take several days, which may lead to liquidity challenges when cash is urgently needed. The solution is to choose liquid staking, such as receiving derivatives like stETH after staking ETH, which can be converted to cash in the secondary market at any time, but one must bear the risk of price fluctuations between stETH and ETH (historically, the highest premium has reached 5%, while the lowest discount was 3%).
Another hidden risk is the node penalty mechanism: if a validating node goes offline or acts maliciously, part of the staked assets will be deducted. Choosing a leading staking platform is crucial; top institutional nodes like Ld maintain an online rate of 99.9%, whereas smaller platforms may face technical issues that lead to reduced profits.
Staking strategies: different approaches for varying amounts of capital.
Small funds (1-10 ETH): prioritize choosing liquid staking platforms to retain flexibility, use stETH to participate in DeFi lending, extract 50% of funds to reinvest, achieving 'one principal with two profits'.
Large funds (over 100 ETH): can build their own nodes or choose institutional custody, the proportion of MEV earnings will increase, and professional teams can earn an additional 20%-30% by optimizing transaction ordering.
ETH staking is not a business where one can earn effortlessly; it requires an understanding of ecological rules and technical skills. As the halving event approaches, staking is not just about earning interest but also a strategy to lock in low-cost chips—after all, those who can navigate bull and bear markets are always the ones who understand the rules and can remain patient.
