stETH: Staking ETH 2.0 with StakeHound without lockup and full usability

stETH: Staking ETH 2.0 with StakeHound

StakeHound is thrilled to bring to the market stETH – a liquid wrapped version of ETH 2.0 released on December 1st, 2020 giving immediate liquidity and unlocking the staking rewards for the users.

The highly anticipated ETH (Ethereum) 2.0 release is a set of upgrades that improve the scalability, security, and sustainability of the Ethereum blockchain and is set to go live this December. While it promises of holding out steady staking returns, this network upgrade also creates illiquidity through lockups and the risk of running infrastructure and hosting a validator node. This has made users face a crucial decision: should users stake with ETH 2.0 or not?

ETH 2.0 Staking deal

The Ethereum network has a market cap of US$40.6 billion and is the biggest network to transition from proof-of-work (PoW) to proof-of-stake (PoS). If users choose to join this transition to Ethereum 2.0 Beacon chain launch, would it be best to run your own nodes and complete complicated, tedious work to become a 24/7 service provider?

But before answering this question, the choice that needs to be made is whether or not to stake on Ethereum 2.0. While staking on ETH 2.0 offers rewards, including high yields of up to 10% APR, users are required to stake a minimum of 32 ETH, which is currently equivalent to about US$16,000. Not only that but staked ETH must also be locked for about 18 months, making it illiquid for a long period of time. This makes users’ staked ETH unable to be used for anything else, especially the booming DeFi scene.

On top of this lock-in period and high minimum staking requirements, users will not receive compounding interest on their staked returns. Users’ earnings can also be slashed if they are unable to perform their duties as validators properly, which requires the right hardware for hosting validator nodes. While it seems like staking on ETH 2.0 has many limitations, staking ETH using a third-party provider might be the best option for new or non-technical users, new to the blockchain and staking space.

Liquid Staking of stETH by StakeHound 

StakeHound is an alternative liquid staking platform that allows potential users to enjoy the benefits of staking without experiencing limitations faced when staking on ETH 2.0. Unlike staking on ETH 2.0 and having to maintain your own nodes, StakeHound enables users to stake without lock-ups. There is also no minimum staking requirement, which means anyone can now stake ETH.

Liquid staking is a new innovative approach brought by StakeHound to Etherium users in the easiest and accessible way. stETH can be acquired on the StakeHound Platform by sending ETH 2.0 at the constant 1-on-1 rate. Staked ETH can be then immediately used in the DeFi applications while the staking rewards will be automatically distributed to all the stETH holders and can be fully accessible right away. In other words, StakeHound solves all the limitations with staking on ETH 2.0, whilst offering several benefits such as immediate liquidity and unrestricted access to the staking rewards.

 

In the following table we would like to summarize the benefits of using stETH instead of staking ETH 2.0:

 

Criteria Stake ETH 2.0 Use stETH 

Minimum lock-up period

18 months none

Minimum amount required to stake

32 ETH (US $16,000)

none

Access to the staking rewards

Rewards are locked for 18 months

Rewards are fully accessible

Access to DeFi

No, due to lock up of funds

Yes, fully liquid assets

 

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