ConsenSys, the Ethereum infrastructure provider behind Metamask, has announced that the widely used crypto wallet now allows users to stake their ETH directly from the app.
The public beta of the network allows users to select Lido or Rocket Pool for staking, through which they can gain performance and receive staked liquid ETH in return.
ETH staked on MetaMask
According to The Block’s account of the ConsenSys announcement, users can confirm the amount of ETH they would like to allocate for staking with a signed transaction on MetaMask and receive their liquid staking tokens directly from the staking provider.
Lido and Rocketpool were selected for the service due to their popularity and user feedback.
“It is important to note that MetaMask Staking does not provide staking services,” Abad Mian, MetaMask’s senior product manager, told TheBlock. “We simply connect users with Lido and Rocket Pool to stake their ETH and receive liquid staking tokens directly from the staking provider.”
“Staking” refers to when users of a proof-of-stake crypto network lock some of their crypto for a specified period of time to secure the blockchain. Participants earn a return in exchange, allowing them to make a profit simply by holding the currency.
However, betting on Ethereum requires a minimum of 32 ETH. At current prices, that’s a $44,800 worth of barrier to entry against any user who can’t invest that much in ETH.
By contrast, staking services like Lido and Rocket Pool pool ETH from smaller users into a functional validator that can earn ETH on behalf of all of its contributors. Additionally, by providing ETH-pegged liquid staking tokens such as stETH and rETH, pool users can effectively retain liquidity on their assets while continuing to earn returns.
MetaMask users can also exchange their rETH and stETH back to ETH within the app for a fee.
the fusion
Ethereum used a proof-of-work consensus mechanism until the Join last year, which changed the network’s consensus mechanism to proof-of-stake. This was widely considered to be one of the most technically challenging upgrades in the history of cryptography.
The update was criticized by some who believe proof-of-stake puts Ethereum on the path to centralization. More than 60% of the ETH staked is in control of a handful of centralized providers, including Lido, Binance, Coinbase, and Kraken.
Brian Armstrong, CEO of Coinbase reclaimed in August that he believes Coinbase would shut down the Ethereum staking service if asked by regulators to exert control over the network.
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