Ethereum

About Ethereum

Ethereum is the largest smart contract Layer-1 blockchain, which transitioned from Proof-of-Work to Proof-of-Stake via The Merge (September 2022). Validators secure the network by staking ETH and earn rewards from three sources: block rewards, priority fees, and MEV (Maximal Extractable Value). Unlike other chains like Cosmos or Solana, Ethereum has no native delegation mechanism — you either run your own validator (minimum 32 ETH, now up to 2048 ETH max per validator after the Pectra upgrade in May 2025) or participate via liquid staking protocols like Lido/Rocket Pool, which pool user funds and operate validators on their behalf. Current APY is around 2–3% for native staking including MEV, while liquid staking returns slightly less after protocol fees (~5–10%), but the receipt tokens (stETH, rETH) remain usable across DeFi. Unstaking goes through a withdrawal queue (variable, typically hours to weeks), though liquid staking tokens can be swapped to ETH instantly on DEXes like Curve.

How to Stake

1. Choose your method: solo staking (32–2048 ETH + your own node, Type 2 "compounding" validator), liquid staking (Lido, Rocket Pool — any amount, no node needed), White Label — ask through FP Validated, or CEX staking (Coinbase, Kraken, Binance — simplest but higher fees).
2. For liquid staking: set up an EVM wallet (MetaMask, Rabby), fund it with ETH, go to stake.lido.fi or stake.rocketpool.net, and connect on Ethereum Mainnet.
3. Enter the amount of ETH and approve the transaction — you'll receive stETH (Lido, rebases daily) or rETH (Rocket Pool, appreciates in price) as your liquid staking receipt token.
4. Rewards accrue automatically and these tokens can be used across DeFi (lending, LP, EigenLayer restaking) for additional yield on top of staking rewards.

💡 Tip: Since Pectra (May 2025), the initial slashing penalty dropped 128x (from 1/32 to 1/4096 of effective balance) — even a 2048 ETH validator now faces only ~0.5 ETH initial penalty vs ~1 ETH before. The real risk is still the correlation penalty from mass slashing events. Liquid staking protocols like Lido distribute across 30+ operators, diluting this risk. Advanced users can restake via EigenLayer for +2–5% additional APY, but this compounds slashing exposure across multiple protocols.