The Ethereum network’s recent transition to a proof-of-stake (PoS) consensus mechanism marks one of the most important events in crypto’s history. The Merge finalized Ethereum’s transition from its former proof-of-work (PoW) consensus via the Beacon Chain.
This structure is far more accessible and scalable than the former PoW mechanism. Previously, miners would compete to confirm the latest block of transactions in order to earn ETH rewards. Mining requires intensive computing power and consumes substantial energy.
Proof-of-stake foregoes mining for a new method of validating transactions. Anyone can help to secure the network by staking their ETH holdings. In return, stakers receive regular ETH staking rewards.
Ethereum staking has gained massive traction as investors rush to take advantage of the rewards on offer.
There are a number of ways to stake ETH depending on your needs. Stakers can either participate directly or via liquid staking services. Centralized exchanges also offer ETH staking for users.
Staking ETH directly to the smart contract provides full autonomy and potentially increased staking rewards. However, this approach is highly technical and requires substantial resources.
Direct staking requires participants to set up and run a full validator node on the Ethereum blockchain. Participants need to stake 32 ETH in order to do so. This figure equates to roughly $58,000 at the time of writing.
Such a high barrier to entry naturally excludes most individuals from participating in ETH staking directly. Fortunately, liquid staking services have emerged as a far more accessible alternative for ordinary users.
Liquid staking protocols use novel innovations to drastically reduce the barriers to ETH staking. With this approach, users can stake as little as 0.01 ETH to start earning rewards.
The process is far less intimidating than its name suggests:
Issuing LSTs thus allows users to benefit from ETH staking without needing to sacrifice control of their capital. Users can participate with virtually any amount of ETH. Further, those who put their LSTs to work via other DeFi protocols are able to compound their returns.
The inclusive nature of liquidity tokens has seen the sector grow rapidly in DeFi. Lido Finance has led this charge, boasting an impressive $13.8B in total value locked (TVL).
Ethereum staking rewards vary between protocols. However, users can generally expect to earn yields in the region of 4 - 6%.
At the time of writing, Lido’s stETH offers yields of above 3%. Rocket Pool’s rETH currently delivers similar yield. Meanwhile, Frax Finance’s sfrxETH offers slightly higher APYs.
In comparison, running your own validator node generates nearly 6% APYs. While this figure is substantially higher, it’s important to remember that running a node requires a 32 ETH investment. If you’re looking to earn higher staking rewards without maintaining your own validator, you may opt for a liquid staking aggregator, such as OETH.
Origin Ether (OETH) is the flagship ETH LST offered by Origin DeFi. OETH harnesses ETH to deliver far higher yields than liquid staking alone.
Despite having only launched in May 2023, OETH has already generated over 40,000 ETH in TVL.
Even in the face of such rapid scaling, the protocol still delivers >4% trailing 30-day APY. This means that stakers enjoy higher yields than base staking rewards.
OETH is fully backed by reserves of ETH. Users can deposit ETH in order to mint an equivalent value of OETH, which maintains its peg to ETH.
Traders can use OETH like any other token, ensuring that users retain full control of their capital. OETH’s unique design also offers an impressively seamless user experience. The protocol directly disburses yield to holders’ wallets, with no manual compounding required. As a result, users enjoy time savings and avoid excessive transaction fees.
OETH is able to offer outsized APYs thanks to its meticulous strategies.
One of OETH’s primary strategies utilizes reserves to provide liquidity to pools on Curve, the largest decentralized exchange in DeFi. Supplied liquidity generates yield in the form of trading fees. As this is executed via Convex Finance, these reserves also earn rewards tokens in the form of CVX.
OETH also earns yield by staking underlying ETH and other market operations. Users can view a full breakdown of all metrics via the analytics page. Importantly, Origin Ether is fully transparent and prioritizes robust security.
As with any investment, staking Ethereum carries risks. It’s vital to conduct extensive research before deciding to pursue staking.
Running a validator node is best suited for users with resources and high technical proficiency. Thankfully, liquid staking makes this process far more painless.
With services like OETH, users can retain control of their investment without sacrificing yield. In the case of OETH, this yield outpaces pure staking and single LST protocols.
ETH staking has maintained an upward trajectory since launching in late 2020.
The amount of ETH staked to the network has steadily grown despite broader uncertainty, evidencing the sector’s strength. In recent months, the share of ETH supply staked to the network has risen significantly. However this ration remains well below most proof-of-stake chains, which see upwards of 40% of their tokens staked.
As ETH is now deflationary, the race to accumulate has never been more urgent.Dive into the Origin Ether ecosystem and learn how you can stack ETH faster: app.oeth.com.
