Proof-of-Stake (PoS) marks an important evolution in blockchain networks. This switch away from mining is already democratizing networks and reducing the environmental impact of protocols. Importantly too, PoS is giving token holders a chance to earn yield.
While a number of smaller networks run a PoS consensus mechanism, by far the biggest push is coming from the Ethereum network.
Traditionally a Proof-of-Work (PoW) network, Ethereum is currently running an additional PoS beacon chain (Ethereum). These 2 chains are expected to fully transition over to PoS this year, in an event known as the merge.
Why You Should Act Before the Merge
Although the merge is at least a few months away (current estimate summer 2022), you should not wait to stake your ETH.
Since Ethereum 2.0 is already running, you can take action today and start earning ETH ASAP.
Plus, with Blockdaemon you can earn rewards without the hassle of managing your own Eth2 nodes. If you are holding at least 32 ETH, there are benefits for acting early and achieving a first-mover advantage – as is often the case in blockchains and cryptocurrency.
Here are 3 reasons to stake ETH now:
1. Start Earning ETH ASAP: You Can Already Earn Around 5% Yield
At the moment, your ETH is just sitting there. But it could already be generating returns. If you stake your ETH with Blockdaemon today, you can expect a roughly 5% yield once your validator has been activated. Of course, the long term yield forecast is higher (see point 3), but 5% is still a great staking reward and is infinitely better than zero.
2. Beat The Rush: You Can Get In Ahead of the Queue
When you first stake ETH, your validator joins an activation queue. In some cases, it can take a while for your validator to be activated.
Only four validators can enter the network per epoch (which is about 6.4 min). So roughly 900 Eth2 validators can be added to the network per day. Any validators outside this threshold are added to the queue.
At the time of writing the queue is currently at zero, however, at times it has been between 1-4 weeks.
When the merge finally happens, we anticipate that the queue, and subsequent wait, will increase dramatically. Once you’ve made a commitment to stake your ETH, you want to maximize your rewards as quickly as possible.
Ask yourself, do you want to sit in a holding pattern while others are making gains?
3. Earn More ETH: You Can Expect a Higher Post-Merge Yield
According to respected Ethereum 2.0 researcher Justin Drake, initial post-merge staking yields are expected to be 12%. This is double the expected long term yield level of 6%.
The main reason for staking is to generate yield. If you miss this initial period, you could miss out on maximizing your returns. Especially when you consider the potential activation queue (mentioned above).
→ 120M ETH supply peak
→ 11 years to reach 100M ETH
→ 12% temporary APR at merge
→ 6% long-term APR, 45M ETH staked
→ 7M ETH/year sell pressure reductionhttps://t.co/XnYvDgLNxT
— Justin Ðrake 🦇🔊 (@drakefjustin) August 7, 2021
To give yourself the best chance of hitting the top APY rates, you need to stake your ETH as soon as possible.
Maximize Your ETH with Blockdaemon Validators
Staking today versus staking post-merge could earn you more than double the yield, but how do you get started?
Once you’ve decided to stake your ETH, you need to find a validator. When delegating your tokens, it’s important to select a provider who gives maximum returns with minimum risk.
Blockdaemon is the best choice for Eth2 infrastructure.
We provide a ‘custom-tailored’ ETH staking program to help our customers stake quickly and safely. When you stake with us, you are joining a huge pool of existing Eth2 validators. At the time of writing, we have around $1.6bn ETH staked with us.
We provide business & technical risk mitigation:
- Best in class infrastructure for stable and rapid performance
- Sophisticated in-depth monitoring for minimal downtime
- 100% slashing insurance for Blockdaemon-incurred penalties
- Free-of-charge, white-glove services for onboarding new clients
Stake Your ETH With Blockdaemon Today
Don’t wait until it’s too late, now is the time to stake your ETH and maximize your returns.