July 22, 2024
Latest Cryptocurrency News

MetaMask Launches Accessible Ethereum Staking Service

Crypto wallet firm MetaMask has unveiled a new staking service, allowing Ethereum holders to pool their funds and stake their assets with enterprise-grade validators operated by blockchain software company Consensys. This service aims to make staking accessible to a broader audience by eliminating the need to meet Ethereum’s substantial minimum requirement.

Easier Staking for Ethereum Holders

MetaMask wallet users can now stake their Ether (ETH) without needing the hefty 32 ETH minimum, which is approximately $112,000 at the time of writing. By using MetaMask’s staking pool, users can contribute smaller amounts of ETH and still be eligible for staking rewards. This new service democratizes the staking process, making it more accessible for the average Ethereum holder.

Understanding ETH Staking

With Ethereum’s transition to a proof-of-stake (PoS) consensus mechanism, the network now relies on validators to process transactions, store data, and add blocks to the Beacon Chain. Validators play a crucial role in maintaining the network’s security and decentralization. According to Consensys senior product manager Matthieu Saint Olive, MetaMask’s pooled staking service enhances Ethereum’s decentralization and security. Validators earn interest on their staked coins but also risk losing their ETH if they fail in their duties or engage in collusion, a risk known as “slashing.”

“If a validator is slashed, this would lead to users’ fund loss, which is the main risk around staking,” Saint Olive explained. However, he reassured users by noting that since 2020, Consensys validators have operated without any slashing incidents.

Addressing the high entry barrier

Despite the potential benefits, the high entry barrier of 32 ETH has made staking prohibitive for many. With ETH prices hovering around $3,500, the cost to become a validator stands at about $112,000. MetaMask highlighted that “99% of ETH holders have less than 32 ETH,” making it difficult for the majority to participate in staking. Additionally, 74% of ETH remains unstaked, with much of the staked ETH concentrated in a few larger pools.

MetaMask’s new service aims to bridge this gap, enabling users with less than 32 ETH to participate in network staking through Consensys validators. Importantly, users can also “unstake at any time,” subject to the validators’ exit queue protocols. While this service is not yet available to users in the United States and the United Kingdom, MetaMask is working to expand its availability to these regions.

A Step Towards Inclusive Staking

MetaMask’s new staking service marks a significant step towards making Ethereum staking more inclusive for the average ETH holder. By lowering the entry barriers, MetaMask allows more users to contribute to network security and earn rewards. As the regulatory landscape in the US and UK evolves, MetaMask plans to roll out this service in these jurisdictions, further broadening access to Ethereum staking.

Image by Kerfin7 on Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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