How Profitable Is Ethereum (ETH) Staking

One of the main events of this year in the world of cryptocurrency may be the long-awaited transition of Ethereum to the network version 2.0. Vitalik Buterin predicted an update back in 2016. Investing in time did not work, and the process slowed significantly. 

The team is set up seriously, so already in 2020 it is worth counting on the introduction of the so-called staking. Staking is that the user gives ethers to the likeness of a deposit, due to which it ensures the operation of the network and earns interest. Changelly tells you how much it will turn out to earn on this idea.

Ethereum (ETH) Staking Explained

Staking is a passive income from cryptocurrencies based on the PoS algorithm and its variations. The essence of the process is to keep coins in your wallet to obtain the right to participate in the extraction of cryptocurrency and make a profit.

eth staking

This year Ethereum, the second cryptocurrency by capitalization, will switch to the Proof-of-Stake algorithm. The transition will mark a complete change in the principle of issuing new coins. Now ETH will be mined not by the owners of mining farms on video cards and ASIC miners, but by the so-called validators.

Fortunately, staking does not mean having graphic cards and getting huge electricity bills at the end of the month. Justin Drake says that most consumer laptops will be able to support multiple validator slots. However, you need to stay online all the time so you can check the blocks.

Some of these requirements can even be circumvented if you are part of a pool. RocketPool will be able to manage to stake on your behalf, and you will not need to run the appropriate software or stay on the network. In addition, pools can offer you the minimum amount for staking – for example, only 1 ETH. Unfortunately, staking pools usually charge a fee, and therefore with “minimal” staking, you will earn less than if you worked as a separate validator.

The best association with the staking process is a bank deposit. The main difference is that the coins you have allocated will help the network and ensure transactions in it, and not make money for the bank.

You need to block a certain number of your coins in the node for staking. In fact, this is a passive income with a percentage of blocked coins. The value of this percentage can be calculated using the EthereumPrice calculator.

Ethereum 1.0 VS Ethereum 2.0

Ethereum 1.0 and 2.0 should work in parallel initially. During the “zero phase”, you can transfer your broadcast to the lighthouse chain of Ethereum 2.0, which will only handle staking. At the same time, Ethereum 1.0 will process everything that is not related to staking (transactions and operations on smart contracts).

You will still be able to mine on Ethereum 1.0 after the staking starts to operate, however, the reward for mining will gradually fall. The Constantinople update in 2019 significantly reduced the volume of mined coins. In the coming years, the reward for mining may be reduced by ten times.

You can start staking immediately as soon as Ethereum 2.0 is launched. Thanks to mining pools and other participants in the Ethereum ecosystem, almost all Ether owners will have the opportunity to participate in Ethereum 2.0 staking.

Read more about Ethereum 2.0: Release and Roadmap.

How Much Can You Earn on Ethereum (ETH)

The calculator allows you to calculate annual income for any amount of blocked ETH. In order to participate in the staking process, you will need at least 32 ETH or $6,000 at the current cryptocurrency rate. You can always check the cross-rates at our service

EthereumPrice takes into account additional indicators: the time of operation of the Ethereum staking node in the cryptocurrency network, its price, and the share of all coins in the circulation that are allocated for staking. Depending on these values, the annual income of the validator can vary greatly. If the node does not work half the time, then its income will be noticeably lower.

An investor blocks 32 ETH at an Ethereum price of $200. 1 percent of coins in circulation are blocked in staking. Assume that its node has been running 99 percent of the time since activation. Profitability, in this case, will be 14% per year or 4.56 ETH.

staking 1st example

Service developers specify that it should be used more for educational purposes than as a practical tool. The exact profitability cannot yet be calculated since the developers have not yet launched staking and, can change some principles of evaluation. You can only imagine how much it will be when blocking a certain proportion of coins from the general circulation in staking.

Bottom Line

Judging by the general mood in the industry and among the developers of the Ethereum team, they really intend to launch an updated network this year. So, a new approach to earning on cryptocurrencies is waiting for us relatively soon.

Get ready for ether staking in advance. Check the cross rate on the widget below. 


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