What is Ethereum Staking? (2024)
- Highly secure platform
- Popular tokens available
- High yields
- Easily accessible to beginners
- Not registered with the AMF
- Highly secure platform
- High yields
- Easily accessible for beginners
- Popular tokens often unavailable
- Managed portfolio offer
- Recognized by the CSA
- Ability to invest through model portfolios
- Risk smoothing option
- Fund custody via Ledger Vault
- Highly secure platform
- Easy to access for beginners
- Popular tokens often unavailable
- High yields
One of the most interesting developments in the history of cryptocurrency was the development of the proof-of-staking verification process. This new method of verifying crypto transactions meant that holders of certain coins could earn income from helping a currency validate itself.
There are currently over 200 million unique Ethereum addresses, all of which, in theory, could be constantly earning interest on their holdings by participating in staking. So if you have, or intend to buy Ethereum, why aren't you getting involved? If you are new to this kind of investment or just want to reclarify some things then read on as we break down how it works, where to stake and how much money you could make.
What is staking?
Some cryptocurrencies use staking as a part of the verification process. Staking verifies cryptocurrencies with proof-of-stake instead of proof-of-work.
Bitcoin, and other currencies, use proof-of-work. This system relies on the mining process to verify transactions. Crypto staking is alternative to this system. It adds new transactions to the blockchain without any need to solve mathematical problems.
Each time that a transaction is verified using your coins, you will earn money. When a transaction is added to the blockchain then new coins are minted. In this way, if you have crypto in a staking pool then you can earn passive income.
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How much money can you make staking?
The most attractive thing about staking is that it is passive income. That means that you don't need to do anything, you simply stake your coins and earn money.
The highest reported annual yield for Ethereum staking is just over 10%. Compare this to a high of around 4% interest offered by leading Canadian savings accounts and you can see why so many people find staking an interesting investment.
Let's take a look at some of the leading exchanges and their best offers.
| Crypto exchange | APR |
|---|---|
| Binance | up to 5.2% |
| Coinbase | up to 5% |
| Crypto.com | up to 6% |
| Kraken | up to 7% |
| NEXO | up to 8% |
| YouHodler | up to 4.08% |
Good to know
What is APR in crypto staking?
APR stands for Annual Percentage Return. APR is the rate of interest you earn by staking crypto coins and it includes the interest rates and all of the other obligatory charges. APR is calculated with simple interest.
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How to stake your Ethereum?
The first step is to buy Ethereum from a crypto exchange platform.
Next, you will need to create an account on one of the platforms that allow crypto staking. All the examples mentioned in the table above provide this service. A comprehensive list and comparison tool can be found in our guide to crypto staking.
Other platforms like Kriptomat offer a sort of savings account where they will stake your crypto coins for you. They charge a fee for this service.
Once you have your Ethereum and your account the process is simple. You will join a waitlist and when your turn comes your coins will be staked automatically. Then you start earning!
Where to buy Ethereum?
Ethereum is a very popular coin and therefore is available from a wide variety of crypto trading platforms. You can buy Ethereum from the following exchanges in Canada:
- Binance
- Bitbuy
- Bitfinex
- Bybit
- Coinbase
- Coinmama
- Crypto.com
- FTX
- Gemini
- Itez
- Kraken
- KuCoin
- Mt Pelerin
- OKX
- WazirX
You can also buy Ethereum from the following wallets:
- Argent
- imToken
- MyCrypto
- MyEtherWallet
- Squarelink
- Trust
Good to know
Interested in comparing trading platforms and seeing who has the lowest fees? Check out our crypto exchanges guide today!
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Is it a good idea to stake Ethereum?
Staking can bring in higher returns than conventional interest rates on saving accounts. Additionally, staking earns money passively meaning you don't have to be glued to your screen waiting for the perfect moment to make trades to make money.
Staking Ethereum may suit people who already own Ethereum coins but who don't have the time or the energy to be constantly trading and monitoring price shifts. Since Ethereum staking ties up coins and prevents you from trading them until the verification process is complete, some users find this frustrating. If the perfect moment to sell comes, but your coins are already staked then there is little you can do but wait!
Are you interested in putting your coins to work?
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What are the best alternatives to Ethereum for staking?
There are some great crypto coin alternatives to Ethereum if you are interested in diversifying your staking. Let's take a look at some of the leaders in Canada and compare their values.
| Cryptocurrency | Value Staked to Date | Total stake % | Reward |
|---|---|---|---|
| Solana | 52.78B USD | 74.95% | 5.99% |
| Ethereum 2.0 | 37.58B USD | 8.86% | 4.54% |
| Terra | 37B USD | 41.75% | 6.08% |
| Cardano | 29.82B USD | 71.9% | 5.01% |
| Avalanche | 25.9B USD | 66.56% | 9.06% |
| Polkadot | 14.26B USD | 52.53% | 14.05% |
Interested in diversifying your crypto coin portfolio?
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What is the Ethereum Merge?
The Ethereum Merge took place on September 15th, 2022. Ethereum transitioned fully from a proof-of-work to a proof-of-stake model. This was was a change that had been anticipated for some time. It meant the merging of the Eth1 and Eth2 systems and the completion of a long-term project for Ethereum.
One immediate effect of this transition, according to Ethereum, is a 99.5% reduction in the amount of energy the currency consumes. Proof-of-work is a highly energy-inefficient model that requires a high-consumption level of computing power. By contrast, proof-of-stake works by peer-to-peer consensus building and avoids the need for the 'mining farms' that have been criticized for high every usage.
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