Best Places To Stake Your $ETH: Top APRs, Custodial And Non-Custodial

Wondering how you can make money from your digital asset while you hodl? We’ve put together 10 Best Places To Stake Your $ETH. Apart from trading, staking is one of the ways of making money from cryptocurrency. Initially, you can only stake Cryptocurrencies that use a proof-of-stake protocol like Solana, Cardano, and Tezos. However, in December 2020, Ethereum introduced Eth 2.0 or Serenity that uses the proof-of-stake protocol. The scalability of eth 2.0 and the increase in the number of transactions it can process are advantages over the first Ethereum. However, while you can stake your $ETH on the Ethereum platform, you cannot unstake until the full Eth 2.0 is launched in 2022. Therefore, to enjoy the array of benefits accrued to staking $Eth, staking on third-party platforms is your best bet.

You will find the top custodial and non-custodial staking platforms where you can stake your ETH in this article. We’ve put together 10 Best Places To Stake Your $ETH.

What Is Crypto Staking?

Cryptocurrency staking is the process of holding your digital asset in a wallet or exchange for some time while it is put to work and you earn a reward. When you stake your crypto, you are supporting the security and validation of Blockchain technology. Staking your crypto is a way of generating passive income while you hodl your asset. Your staking rewards or interest is determined by the amount of cryptocurrency you have and the length of time you hold it. Therefore, the more digital asset you stake for long, the higher your rewards. Crypto asset that uses proof-of-stake consensus like Eth 2.0 rather than proof-of-work allows crypto staking.

Staking crypto is a way of putting them to work. Although most staking platforms require that you lock up your cryptocurrency, you are still the owner. The market’s volatility can affect the value of your asset, so in a particularly bearish market, you can stake your asset and unstake them later to trade when it’s bulls. To know how crypto staking works, it is essential to understand the differences between the proof-of-stake and proof-of-work model.

Proof Of Work Vs. Proof Of Stake

Undoubtedly, Ethereum is the second-largest cryptocurrency and has the highest number of dApps built on its blockchain network. However, the Ethereum blockchain uses the proof-of-work protocol, solving complex mathematical problems and consuming huge energy. As a result of the high computing power that the blockchain utilizes, it has generated criticisms from environmental activists. In Bitcoin and Ethereum blockchain, miners use proof-of-work to build new blocks in the blockchain and confirm transactions. They are then rewarded with cryptocurrency. Apart from the environmental concern, there is no guarantee of scalability with PoW consensus so, the amount of transactions a blockchain can perform is low. Also, the PoW protocol is expensive.

On the flip side, proof-of-stake is a consensus mechanism where blocks of cryptocurrency are verified and secured. In a proof-of-stake protocol, each cryptocurrency investor is a part of the staking pool, and they contribute to the process of validating transactions on the blockchain. Proof-of-stake protocol uses a process called minting instead of mining to build new blocks. Not all cryptocurrency uses the proof-of-stake model. Some of the digital assets that employ proof-of-stake include Cardano, Solana, Polkadot, and recently, Ethereum 2.0.

Ethereum’s Proof-Of-Stake Protocol

Unlike the first Ethereum, Eth 2.0 uses PoS, limiting the amount of energy and computing power it takes to verify transactions. In so doing, new transactions are added by the validators to the blockchain. The reward for a validator in a PoS model is the transaction fee determined by the number of Eth. Therefore, you need 32 Ether per node before you can become a validator for Eth 2.0. Note that in a proof-of-stake, if foul play is suspected, a part of a validator’s Ether is deducted in a process called slashing.

Since Ethereum recently launched the first phase of Eth 2.0, it is not fully functional until 2022. You can become a Node operator on the Ethereum network and stake your ether until it is fully launched. However, if you would like to unstake your eth before the merge, you can use a staking platform to earn rewards while you wait.

Types Of Staking Platform

• Custodial Staking Platform

Similar to centralized exchanges, custodial staking platforms have validators who stake users’ assets on their behalf and receive the rewards. They then distribute the reward among users. Custodial staking platforms give every crypto enthusiast the chance to participate in staking. This is because they lower the barrier of entry associated with staking assets. As custodial staking platforms do all the works for investors, they have control over the private keys of a crypto investor.

However, using custodial staking platforms can be a good way for beginners to stake their cryptocurrency until they learn the ropes. Furthermore, staking $Eth requires 32 ether per node which is enormous; a custodial staking platform serves as an intermediary between the validator and the investor. Moreover, since most of these exchanges are well established, they have a large number of customers that can be pooled together to stake.

• Staking-as-a-service

In a staking-as-a-service (SaaS) platform, users can easily stake their cryptocurrency with a bit of a barrier. SaaS providers specialize in staking digital assets for investors to reduce the need to gain technical knowledge on staking.

• Non-custodial staking platform

Due to the risk of hacking present with custodial exchanges, a non-custodial staking platform allows individuals to manage one or many validators without sharing their private keys. Non-custodial staking platform gives you the freedom to decide how you want to stake your asset.

• Solo Staking

Solo staking is one of the non-custodial staking processes that let you manage your staking process. If you prioritize security, anonymity, and privacy, a non-custodial platform may be right for you. Solo staking is very private staking where an investor stakes directly without the need for a centralized exchange. A solo staker uses their coin for staking and carries out the process themselves without the need of a third party.

Best Ethereum Staking Platforms

Now that you have a clue about ETH staking, let’s dive into 10 Best Places To Stake Your $ETH and platforms that allows you stake your precious ETH;

1. eToro

As a social trading platform, eToro offers both stocks and cryptocurrency investment options. In addition, eToro gives users the ability to trade forex and Contract for Difference. Its copy trading feature allows beginners to learn trading with graphics and a simple interface. Depending on your membership tier, you can stake ADA, Tron, and ETH for rewards. eToro seeks to provide hassle-free staking for investors. An investor does not need to carry out any action other than holding their crypto asset for a specified period and start earning rewards. When you stake your ETH 2.0 on eToro, your ETH reward will be accrued but cannot be accessed until the main net of ETH 2.0 is launched.

You can earn between 5% and 6.25% per year on staked ETH 2.0 with eToro. Unlike with staking other assets, eToro users can stake ETH 2.0 only within the eToro Money app and check their staking reward on the crypto wallet in the app. Staking ETH 2.0 on eToro is not available to users in the US.

Reward percentage of the monthly ETH staking yield, per tier

Pros:

• Good for beginners
• Simple and easy to use
• Users only need to keep their ETH on the platform to stake
• Users can do more than staking on the exchange

Cons:

• It does not have a lot of assets for staking

2. Binance

Binance is the largest cryptocurrency exchange platform based on trading volume. With over 500 coins supported on the platform, Binance is one of the top cryptocurrency exchange platforms that support the proof-of-stake protocol. In addition, through Binance Smart Chain, Binance supports dApps on its blockchain. Instead of moving your asset to another platform to stake, you can trade your cryptocurrency while you stake on Binance. As a centralized exchange, $Eth can be staked on Binance to earn rewards. With this, Binance, as a custodial platform, stakes $Eth on behalf of many investors and distributes the rewards among the investors. You can earn up to 20% APY if you stake your Eth on Binance.

After staking your $Eth on Binance Earn, you will receive a BETH token with a 1:1 ratio of the $Eth you stake. The BETH token can be traded as the value of $Eth you have staked. Rather than wait for the complete transition of Ethereum, BETH gives you the option to trade your asset.

Pros:

• Binance Eth 2.0 does not require operating fees from users, so it distributes on-chain rewards to users. You can stake your Eth and earn a reward at no cost, while Binance covers the operating fee to the validators.
• If you already own a Binance account, it is easy to stake your Eth without moving your asset about.

Cons

• A minimum of 0.1 Eth is required to stake ETH on Binance.

3. Coinbase

If you are in the US, you cannot currently stake your ETH on Binance.us, so you should consider Coinbase. Apart from ETH, you can also stake other cryptocurrency assets like ALGO, Tezos, Cosmos, and DAI. You must note that there are certain conditions attached to staking, depending on your region. In addition, ETH staking is not available for Coinbase users in some countries. You can earn up to 5% APR for staking Eth on Coinbase. However, the reward is subject to the amount of total ETH staked over time.

Hence, if the amount of Eth increases, the reward will reduce and vice versa. Coinbase converts staked ETH to ETH 2.0 until the transition to ETH 2.0 is complete. Coinbase connects users who wish to stake their ETH to staking platforms where they can earn rewards. The first reward is credited after two weeks which will be available on your Lifetime Rewards Section in your Coinbase account. Read the Coinbase user agreement carefully before you stake.

Pros:

• There is no staking minimum, but there is a maximum amount of ETH an individual can stake to help maintain the network limit.
• The Coinbase interface is user-friendly.
• You can earn your rewards quickly when you stake.

Con:

• Coinbase is an intermediary and does not provide complete protection to users in case of slashing.
• The exchange charges a fee of 25% on staking.

4. Kraken

Kraken is a centralized exchange platform that enables crypto trading and staking. You cannot only exchange digital assets like Bitcoin with fiat currency on Kraken, but you can also earn rewards when you stake your asset. Kraken has many staking assets like DOT, ADA, KSM, FLOW, and ETH 2.0 at its disposal.

When you stake ETH on Kraken, you get between 4% to 7% Reward Per Year in ETH2.0. Also, your ETH will be converted to ETH2.0 and will be locked until the complete transition of Ethereum to ETH 2.0. Kraken users outside of the US and Canada can trade their ETH rewards and stake them back. Kraken charges a 15% commission on ETH staking.

Pros:

• Low fee on staking
• Kraken is suitable for beginners
• High rewards on staking

Con:

• Paying with credit or debit cards is not available.

5. KuCoin

With 8 million users in more than 200 countries worldwide, KuCoin has grown to become one of the most popular exchange platforms since its founding in 2017. KuCoin offers a wide variety of services, including crypto lending, spot and futures trading, and P2P crypto trading.

The KuCoin Pool X Earn affords users the ability to stake their crypto assets. KuCoin provides soft staking for investors whereby they do not have to lock up their assets to stake. That is, users can trade their staked assets in the Liquidity Trading Market. You can stake EOS, Tron, Cosmos, and Ethereum 2.0 on KuCoin. In addition, KuCoin offers an APR of 5% upward, which is distributed based on on-chain reward monthly and can be redeemed after the final launch of ETH 2.0.

Pros:

• KuCoin provides soft staking for users
• Apart from ETH, users can trade their asset while it is staked
• Provides an array of options for investors on their virtual asset

Con:

• A minimum of 0.1 ETH.

6. OKEx

As a well-established cryptocurrency trading platform, OKEx offers a variety of ways to earn money with a digital asset. More so, OKEx has a vast number of crypto assets to trade and has introduced the staking option for ETH 2.0 to its platform. With a minimum of 0.02 ETH, OKEx users can stake their ETH through OKEx Earn.

Similar to Binance, OKEx does not require any transaction fee, and investors can enjoy up to 14.10% APY passive income while on-chain benefits on ETH are 5.89% APY. Accrued rewards on staked ETH on OKEx cannot be redeemed until the launch of the second phase of ETH 2.0.

Pros:

• No staking fee
• Suitable for advanced crypto investors
• Available on a mobile app

Con

• It might be a little daunting for beginners to understand

7. Mycointainer

This is a dedicated Staking-as-a-Service platform that offers on-chain staking solutions to users. It is a simple method of staking crypto assets with no withdrawal fee and no staking fee on all assets.

MyCointainer provides compounding interests and staking rewards for users. It is one of the easiest ways of staking ETH 2.0 to earn rewards. Rewards are posted when the Node reaches 100% after depositing in the MyCointainer wallet.

Pros:

• There are many coin options for users to stake
• You can track multiple stakes in multiple coins simultaneously
• There is a Secure Asset Fund for Users (SAFU) on MyCointainer to guarantee the security

Cons:

• MyCointainer Power plan requires getting used to

8. BloxStaking

Blox is one of the most decentralized staking platforms that give users complete power over their assets. As a non-custodial staking platform, Blox does not keep users’ private keys but rather allows users to be in control of both their withdrawal and validator keys to ensure security and transparency. Users can stake ETH 2.0 on Blox using the Live Desktop App. Blox offers a unique way of accessing and validating users’ ETH through the KeyVault remote signer, which is stored on the users’ cloud account. When you stake ETH Blox, you earn rewards in ETH 2.0 directly from the network.

Pros:

• No fee payment
• No commission deduction
• The users have complete control of their staked asset
• Secure and transparent platform

Cons:

• It is not available for mobile phone users
• It requires some level of technical expertise.

9. Lido

As a non-custodial staking platform, Lido finance not only allows users to stake their ETH but also provides liquidity on their staked assets. Lido offers a global community of investors the ability to stake SOL, LUNA, and ETH. When you stake your ETH, you get Staked ETH (stETH), a derivative token on Lido which can be used on other DeFi protocols like Yearn. To allow users to utilize their ETH before the full merge of ETH 2.0, Lido offers its users liquidity access through stETH.

You can convert stETH to bETH and earn rewards, stake on SushiSwap Onsen and accrue daily rewards, or lend your stETH on AAVE to receive interest. Users can earn 5% APR on their staked ETH but they can also earn more by taking advantage of the liquidity pool. A 10% service fee is deducted by Lido from the reward. To improve the security of your ETH, you can connect your Lido account and store your asset on cold wallet storage like Ledger Nano X.

Pro:

• Provides the opportunity to earn more with your ETH.
• Access to additional security with cold wallets storage.
• Users have a high level of control over their ETH.

Con:

• Supports a limited number of coins for staking

10. Stakewise

Stakewise is an Eth 2.0 staking platform that provides both custodial and non-custodial staking for users. Stakewise aims to reduce the barrier of entry for users willing to stake their Ethereum with high yield while also providing security for their assets. Through the Stakewise token, users can earn maximum rewards on staking by using their token in various DeFi protocols. A minimum of 0.001 ETH is required to participate in the Stakewise pool. Users are then given a sETH2 token after the pool contract has reached 32 ETH to be registered as a validator on the Beacon Chain. The sETH2 and rETH2 are used as rewards on the platform and can be converted on a 1:1 ratio with ETH. A fee of 10% is deducted by Stakewise from users operating the Stakewise pool.

However, non-custodial solo stakers need at least 32 ETH to become a validator. A solo validator will have to wait until the final phase of the ETH 2.0 launch to redeem rewards. Stakewise deducts a fee of 10 DAI monthly from solo stakers.

Pros:

• Uses unique tokenomics structure for Eth staking
• Low fees
• Caters for both users with low ETH and huge ETH

Con:

• It is not easy to operate for beginners who want to stake

How do you choose an Ethereum staking platform?

With so many platforms to choose from, making the right decision for your Ethereum staking can be complex. Even among the top Ethereum places to stake your Ethereum, you still need to decide where to stake to get maximum benefit. Depending on your priority, there are certain factors to consider when choosing an Ethereum staking platform.

• The type of platform

You can choose between a custodial and non-custodial platform. If you prioritize security, privacy, and anonymity, then a non-custodial platform is for you but if your priority is simplicity and ease of access, consider a custodial platform.

• Fees

Some platforms provide services at a relatively low fee, while other charge exorbitant fees. Conversely, Staking ETH on some other platforms like Binance and OKEx is simply free.

• Your level of experience with crypto staking

If you have the experience or the time to learn as well as a huge amount of ETH, you can use the solo staking service and become a validator.

Comparing the different Staking Platforms

Conclusion

The launch of Eth 2.0 has brought crypto staking to the forefront of both institutional investors and crypto enthusiasts. However, there are many limitations to becoming a validator on the Ethereum platform. Firstly, the main net of ETH 2.0 has not been launched yet, so any staked ETH cannot be unstaked until the launch of phase 1.5 of the project. More so, a minimum of 32 ETH is required to become a validator on the Ethereum platform which limits the number of people that can become a validator. Therefore, if you want to get on the ETH 2.0 staking game without all the limitations associated with it, you can choose from any of the platforms listed above.