You Can Now Share Ethereum on MetaMask – Should You?

The popular cryptocurrency wallet metamask Launched mask functionality, which means users can now lock files Ethereum Through the new feature via Lido or Rocket assembly To earn financial rewards.

What that means is that anyone with a MetaMask wallet can now easily start earning a return on any amount of ETH they want directly from their wallet, and without having to navigate what can often be complicated user interfaces in staking apps. But should they?

In the end, foreplay isn’t without risk — not to mention the fact that it is dismantling (ie redeeming your ETH from a staking contract) is not an option at the moment. Ethereum developers say, however, that this feature will be coming soon.

Staking providers

For users who are not concerned about risk, staking can be a profitable activity. While reward rates vary, MetaMask claims that users can earn a return of around 5.22% per annum on ETH deposits with Lido, and 4.59% with Rocket Pool.

According to Lido websiteCurrently, more than $6.9 billion in ETH is stored through its service, earning users approximately 4.9% annually. Lido is a so-called Staking Liquid Provider, which means that users who participate in ETH through Lido receive an equivalent amount of Staked Ethereum (stETH) for their tokens. This allows speculators to remain “liquid” while locking in ETH, allowing them to use stETH on other DeFi services.

Staked Ethereum is currently trading at a slight discount to ETH. While ETH Its price is about 1418 dollars, Steth It is currently trading for $1,407, per CoinGecko data.

Lido is currently the most popular staking provider, holding 29% of all staked ETH, according to Dune Analytics. data.

Rocket Pool is another liquid storage service, which provides users RETH in exchange for their tokens. But it appears that the Rocket Pool on MetaMask has already reached its “maximum capacity”, which means that users may only have the option to share ETH through Lido on MetaMask for now.

Rocket Pool Staking via MetaMask has reached its capacity. Image: MetaMask.

How many have already bet with MetaMask so far? He said that while MetaMask’s senior product manager, Abad Mian, did not provide exact numbers Decrypt The team is pleased with the offering so far.

“We started rolling out the app yesterday at 10% with full rollout today. We’ve seen exciting interaction since the news went on air four hours ago,” said Mian.

But there are other options for ETH staking beyond the two providers that MetaMask now offers through its platform. CoinbaseAnd Binance USAnd A legendary sea monsterAnd the Nexus It also offers Staking Ethereum, each with varying reward rates. Of these centralized providers, only Coinbase and Nexo currently offer a liquid staking option, returning Coinbase Wrapped Staked ETH (cbETH) or Nexo Staked Ethereum (NETH) tokens in exchange for ETH, respectively.

Single mask is also an option — but users will need a minimum of 32 ETH (around $45,800) to do so.

Staking benefits

Since Ethereum is a proof-of-stake blockchain, more ETH-custodial users and running validators around the world would, in theory, make the network more secure and decentralized over time. This is a good thing for a network that has been criticized for being over-the-top Centralized when compared to bitcoin.

Passive income through accumulating rewards may seem like a no-brainer for some long-term holders who do not plan to immediately sell or trade their bags of ETH in the short term.

Risks

But locking cryptocurrency with a third party has its risks. There is a common phrase in cryptography: “It’s not your keys, it’s not your coins.” Unfortunately, this has been true as the market grapples with the devastating effects of Terra crash And FTX breakdown. To date, like Gemini Kassab program closes After the collapse of cryptocurrency lenders BlockFi And CelsiusShould currency holders trust their cryptocurrency with a third party at all? What are the risks, and what do Ethereum developers think?

MetaMask parent company ConsenSys explained in a file Mail Last month what was believed to be the fundamental risks that come with staking ETH. Specifically, it points out the potential risks surrounding compromised, buggy third-party software Smart contractsand large fluctuations in token prices.

It also raises the potential risks associated with unwanted governance decisions being made by any relevant decisions DAOs, issues with code portability, “legal uncertainty”, and the possibility of private keys being compromised. While this may sound like a wide range of potential risks, every one is possible if a user breaches their private data — or a powerful third party makes game-changing decisions.

Withdrawals

Before considering Staking Ethereum, it is necessary to know what uninstallation is Not Available now. This means that at the moment, your Ethereum can enter – but it is I can’t get out yet. This may come as a shock to some, as it means that staking is currently a one-way experiment, but Ethereum developers have plans to change that soon.

The Shanghai update scheduled for early this year will enable pooled ETH withdrawals.

“After Shanghai Update, stakeholders will then be able to withdraw their bonus and/or initial deposit from the validator balance if they choose,” website is reading.

Ethereum developer Marius van der Wijden Tell Decrypt That withdrawals could come as early as March.

He said: “We have launched three cloud devnets and will be doing some cloud fork shadows soon (where we enable the feature on the regular Ethereum chain shadow copy)” Decrypt in message. Withdrawals are expected to begin in March.

Regarding whether or not Ethereum holders should participate in ETH, “people should listen to their gut whether they want to participate now or in a couple of months,” van der Wijden said.

“The code for withdrawals is mostly implemented, but it still needs to be thoroughly tested before it is released,” he said.

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