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The Best Ethereum Staking Platforms

Earn yield on your Ether by depositing it on an Ethereum staking platform

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CompanyFeePool TokenMin. Stake
Stakewise Pool logo10%NoYes
RocketPool logo15%YesYes
Binance logo20%NoYes

What is Ethereum Staking

The Ethereum 2.0 network is secured by a consensus mechanism known as Proof-of-Stake by which stakers (a.k.a "validators") who want to run nodes on the network and validate transactions need to deposit Ether. By depositing Ether, the network is assured that they have sufficient "skin in the game". If they behave as expected and only validate rightful transactions they receive rewards paid out in Ether. If they don't behave as expected or cheat they can get part of their deposit taken ( a.k.a slashing ).

Something that you have to know about staking on Ethereum is that the transition to Proof-of-Stake will take 1-2 years. While the skeleton of the Ethereum 2.0 network is launched on December 1 2020 all the normal activity (like trading, payments etc.) will still take place on Ethereum 1.0. This means that your staking rewards will not be available until the Ethereum 2.0 network is fully functional unless you use a custodial staking provider (more about this option in the next section). Think of it like an invoice that is due to you in one 1-2 years and which becomes more valuable every day.

How to choose the right Ethereum Staking Platform

There are different options available to stake on Ethereum. The normal process entails setting up an Ethereum node on your computer or a special hardware equipment and requires a very stable internet connection and regular maintenance. Since this process is too demanding for most average users there are specialized staking platforms that facilitate the task for users.

Custodial Ethereum Staking Platforms

Custodial staking platforms take care of the entire staking process for you. You just have to deposit your Ether and they set-up the node for you. They also run and maintain the node so you don't have to do anything. The main difference with non-custodial staking platforms is that you don’t control the private key of the validator node. Your funds are controlled and managed by the staking provider. In exchange for their service they take a portion of your rewards.

Custodial staking platforms can be offered by crypto exchanges like Binance but often the service is offered by specialized Ethereum staking platforms Another characteristic of custodial staking is that in most cases you will receive a deposit token. This deposit token accrues value as the staking pool earns rewards and proves that you are owed said amount in the pool. It also means that your deposit is liquid. You can sell it on the secondary market and swap your deposit token back to Ether provided there is demand for it.

Non-Custodial Staking Platforms

Non-custodial staking platforms set-up and manage the validator node for you in the cloud but they don't control your funds. Although you won’t have to worry about the node maintenance you still have control over the funds because you receive the private key. The private key is required to move the validator balance once it is possible in later phases of the Ethereum 2.0 network. In other words there is no way for the staking operator to steal your funds, get hacked or lose them.

With non-custodial staking platforms the billing is usually a fixed monthly cost instead of a percentage cut. You essentially pay the staking operator for the maintenance and server costs. Some Ethereum staking platforms offer both services so you can start with custodial staking to get a first impression of the procedure and later transition to non-custodial staking.

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