When it has been quite a lot of time that you have been trading in cryptocurrencies, it becomes important for a crypto trader to switch to new trading methodologies instead of just buying and selling coins. This not only helps us improve our crypto trading portfolio but also helps you earn a passive income. Yes, we are here referring to "Staking" which means locking your coins for some time so that you can generate a passive income through it. Nowadays, one such term that you might have come across is "Eth staking."
Yes, this term is being referred to quite often in the crypto trading world. Hence, if this is the reason why you have landed here, then you can surely take a look at the details provided in the section to follow and get to know about this concept in a better way.
What is Ethereum or ETH staking?
To put it short, we can say that ETH staking means locking up your ETH for a specified period so that you can contribute to the security of the Ethereum blockchain, and in turn, you are provided with some rewards. The traders who take part in this process are known as "Validators" and "Stakers." These individuals are provided with some kind of responsibility such as storing information and adding blocks to the particular blockchain, and in turn, they are rewarded with Ether.
PoW to PoS- A journey towards ETH staking
After the Merge or the introduction to Ethereum 2.0, the Ethereum blockchain network switched from a Proof-of-work consensus mechanism to a Proof-of-Stake consensus mechanism. This transition to PoS has given rise to ETH staking and users are now more and more involved in this process because nobody wants to miss out on an opportunity to earn extra income. On the other hand, they are contributing towards network stability and reduction in the energy consumption which is required for the validation of the transactions and issuing of new Ether.
Now, let's learn how to stake ETH
I hope, now you have a basic idea of what it actually means to stake your crypto holdings. So, I think now is the time that you start staking your ETH and learn how to do that. There are different ways through which you can involve yourself in the staking process. You can stake your crypto assets as an individual, involved in pooled staking, or stake-as-a-service. There are different platforms including crypto exchanges like Binance and Coinbase, through which you can for ETH staking. For staking your assets, here are the steps to be followed:
Note: Here we are taking Binance exchange as an example to show you how the whole process works. You can apply the procedure on other platforms as well.
Sign up for an account on an exchange
The first thing that you need to do is go to the official website of Binance Exchange or any other chosen platform. After filling up the sign-up form and completing the verification process, move to the next step.
Time to purchase some ETH
Once you are done with account creation, you can fund your account with some ETH by navigating to the "Trade" tab.
Send your ETH to the staking program
Now, go to your exchange's wallet, and then you can simply stake your assets within the wallet itself by locating the "ETH Staking" option.
Pick among the Staking options
At this stage, you have to go ahead with choosing staking options including the amount of ETH that you wish to stake, the time period for the same, and others
You can now start staking
Now, you need to make sure that you have successfully completed the process and now you can sit back, relax, and wait for the rewards to get credited to your account.
This marks the end of the ETH staking process. In case you are also interested to stake your purchased Ethereum, then you can make sure that you follow all the steps that are explained to you in the sections above.