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Should you take the chance to stake ETH? Benefits and Caveats

Should you take the chance to stake ETH? Benefits and Caveats

Of all the cryptos out there right now, there is a solid case to be made that ETH is the most interesting of all of them. It’s not the most famous, nor the most widespread. It’s not the most gimmicky either, and it’s not pegged to an existing fiat currency. The reason that it might be the most interesting isn’t connected to any of those debates. Rather, ETH is interesting because it’s innovating its own way forward, and the decisions being made aren’t just driven by pump-and-dump mania. This is a coin with an eye on the future.

ETH holders are now being presented with the opportunity to stake their tokens as part of the coin’s validation process. This is part of a process which will, in due course, make ETH arguably the greenest cryptocurrency around. But for people who stake tokens, there is more to this process than that. If you’re wondering whether you should become part of this innovative future, there are some questions worth asking and answering. Among these, the most prominent would be “should you stake ETH”? Below are some tips which will help you answer that.

What’s in it for you?

Staking ETH is not dissimilar to taking a fiat currency amount and placing it in a high-yield savings account. The returns for someone staking Ethereum at this point and letting it mature are believed to be between 6-7%, but some estimates suggest that they could rise as high as 10.1%. Staking is considered to be one of the more assured ways of making passive income from crypto right now. You can also use staked Ethereum (stETH), as well as staked Solana (stSOL) at crypto casinos such as Cloudbet, therefore gaining your interest returns along with your winnings.

What are the risks?

The primary risk that exists with Ethereum is the same as that of any investment you might make – the value of the investment may go down. While in ETH terms you are sure to see a return, there is the complication that ETH may lose value by the time you are in a position to consolidate your stake. If that is the case, then your investment may end up being worth less than you initially put in. That being said, the move to ETH 2.0 is likely to make the coin a more attractive investment, and should make it both more valuable in the near term and more resistant to loss of value in the longer term.

Is staking a sensible move?

The overall question you need to answer to your satisfaction is whether staking the coin is a move you’re likely to regret in the long term. In many ways, staking can be seen as a defence against price drops. We’ve all seen the recent direction of travel with not only Bitcoin, but most cryptos, and it has been downward. In the short term, you’re not likely to see huge incentives to lock in value by making an immediate sale, and staking your ETH – therefore tying it up until at least the completion of the move to proof-of-stake validation is complete – is probably no bad thing. Once that move is complete, we may well see rises in price for ETH in general.

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