Since Ethereum’s “Merge” event in 2022, staking has been one of the top ways to compound crypto by earning passing rewards. However, knowing where to stake crypto with robust security and the highest annual percentage yield (APY) can be tricky.
This article provides our picks for the best Ethereum staking platforms, taking into account security, APY, lock-up period, payout frequency, ease-of-use and more.
Reviewing the Best ETH Staking Platforms
Next, we will review each platform in closer detail, highlighting its key features, pros and cons.
1. BTC20 – Stake-to-Earn Bitcoin Alternative on Ethereum With Dynamic Yield and Four-Year Halving Cycle
The best staking platform is B2C20, a newly launched protocol with $BTC20 as its native token. The token represents a Bitcoin alternative on the Ethereum network and features a 21 million capped supply, is 100% community-owned and offers substantial rewards.
One of BTC20’s main draws compared to Bitcoin is that holders earn BTC20 rewards via staking rather than mining. This is a more straightforward, environmentally friendly and accessible process and has put BTC20 in high demand.
It launched a presale last month, raising $6.05 million in 10 days, selling each token at just $1.
There were 6.05 million tokens sold in the presale, with the remaining 14.95 million $BTC20 allocated to staking rewards, following a 120-year unlock schedule on a four-year halving cycle.
For the first cycle, 50 new $BTC20 will be released every 10 minutes, with the number halving every four years.
Staking rewards are based on a dynamic yield, which will adjust based on the size of each user’s current percentage staked in the staking pool.
Following its token launch, $BTC20 pumped 600%, reaching $6. At the time of writing this, investors can buy the token for just $2.
With that in mind, BTC20 is top of our list of best Ethereum staking platforms because it offers users the chance to earn yield while providing much higher upside potential in terms of the underlying asset’s price going up.
This is because most Ethereum staking platforms utilise ETH for staking, and the ETH upside is relatively limited, considering its $200 billion market cap. On the other hand, the BTC20 platform uses its native BTC20 token with a market cap of just over $12 million.
Furthermore, BTC20 boasts similar scarcity-based tokenomics to Bitcoin, all while solving several of its issues, such as the complexity of mining, environmental concerns and lack of interoperability with the Ethereum ecosystem. As such, BTC20 could potentially be one of the most lucrative staking platforms on the Ethereum blockchain.
Varies depending on the amount of $BTC20 staked and the investor’s share of the pool.
No lock-in period
Every 10 minutes
2. eToro – Beginner Friendly Broker With No Lock-in Period and Upto 90% Of Rewards Returned to Users
eToro is a prominent stock and cryptocurrency broker operating globally and is highly regulatory compliant. This makes it one of the most secure ETH staking platforms, rendering it a favourite amongst newbies and those that remain on the fence about the wild-west of DeFi.
Currently, the platform provides staking on three cryptocurrencies (although there are plans to integrate more): Ethereum, Cardano and Tron.
Staking is carried out automatically on eToro; users just have to hold the eligible coins. As such, there is also no lock-in period. This makes for a seamless user experience, ideal for beginners and passive investors.
eToro offers three tiers for members staking crypto, with staking rewards varying between 75-90% of the total generated by the staking pool, depending on the member’s tier.
Furthermore, the platform boasts one of the most intuitive and easy-to-navigate user interfaces of all crypto exchanges.
On top of that, eToro provides access to a wide selection of asset classes. As well as offering many top altcoins, investors can buy stocks, commodities, indices, currencies, ETFs and more on the platform.
eToro also has a crypto wallet called eToro money. The wallet is connected to the blockchain, meaning you can send, receive or trade crypto and enjoy instant withdrawals with high levels of SSL security.
In conclusion, eToro is a feature-packed platform that makes it easy for users to earn free crypto quickly.
The rewards vary, but stakers receive 75-90% of the total rewards that eToro accrues, depending on their membership level.
No lock-in period
3. Coinbase – Leading Exchange Offering Staking On Many Assets With 3.27% ETH APY
Coinbase is a publicly traded company and one of the top crypto exchanges. It is the second largest exchange by trading volume, second only to Binance. However, Coinbase is listed over Binance because Coinbase is a much more regulatory-compliant company, despite its recent struggles with the SEC.
When it comes to staking, Coinase Ethereum staking offers a 3.27% APY, as well as staking on a range of other top cryptos, including USDC, Solana, Polkadot, Cardano and many more.
Coinbase does not impose a lock-up period, but users may have to wait until the unstaking process is complete by the protocol to receive their crypto.
Staking ETH on Coinbase is a relatively straightforward process, following the same process as staking other cryptos on the platform. Like Lido DAO, Coinbase offers a synthetic staked ETH token, cbETH, on which users can earn an additional yield.
Another benefit to the Coinbase platform is its seamless user interface comparable to eToro’s.
3.27% (but varies depending on the total amount of ETH staked).
No lock-in period
Every three days
4. Lido – Decentralised Liquid Staking Solution Enabling Users to Earn Multiple Yields From Staking ETH
Lido is a liquid staking solution offering users a notable Ethereum staking yield and provides a synthetic version of the token, which they can use to earn extra yield.
Currently, Lido offers liquid staking on Ethereum, Solana and Polygon. Its Ethereum staking currently provides a 3.8% APY, Solana is 7%, and Polygon is 4.3%.
According to DeFiLlama, Lido holds the highest market share of all liquid ETH staking platforms, with over $14 billion total value locked (TVL).
While Lido’s growth has raised centralisation concerns, its governance process largely mitigates this risk since $LIDO holders can vote on proposals to control the staked ETH.
After staking Ethereum on Lido DAO, users receive a synthetic version of the token, stETH. They can then put this token to work in over 100 dApps to earn an extra yield on top of the 3.8% APY.
Some applications that users can generate extra yield on their stETH include 1inch, AAVE and Balancer.
3.8% (but varies depending on the total amount of ETH staked).
No lock-in period
5. Rocketpool – Decentralised Staking Pool With Permissionless Validators and Non-rebasing Liquid Token
Rocketpool is a decentralised staking protocol established in 2016. Initially, it focused on traditional staking but later incorporated liquid staking, offering users a non-rebasing liquid ETH in return for staking their coins.
Since Rocketpool’s rETH is non-rebasing, its value gradually climbs over time, so rETH costs more than ETH. Depending on your jurisdiction, this may prove more tax efficient than stETH.
One of the main draws to Rocketpool is that it is permissionless to operate a node. Consequently, anyone can run a node on the network, making it more decentralised.
Rocketpool’s seven-day average Ethereum staking APY is 3.27%, equal to that of Coinbases. However, thanks to Rocketpool’s rETH token structure, simply holding rETH means you are staking ETH and will earn this yield.
Another benefit to Rocketpool is that there is no staking lock-up period, meaning you can withdraw your tokens anytime.
3.27% (but varies depending on the total amount of ETH staked).
No lock-in period
6. Nexo – User-friendly Staking Solution With Liquid Staking and 4% APY
Nexo is an all-in-one crypto exchange offering over 500 cryptos and many additional products and services, including ETH staking.
The platform’s slick user interface and daily Ethereum staking rewards make it a contender for one of the best crypto staking platforms.
With customisable yields of around 4% (up to 12%) and instant withdrawals, Nexo has quickly become one of the top ETH staking platforms.
Users who stake ETH with Nexo gain a synthetic NETH in return. Nexo will then allow them to take out a crypto loan using the NETH as collateral with a 50% loan-to-value (LTV) ratio, leading to endless new ways to earn on staked ETH.
As well as a high ETH yield, Nexo offers generous APY of up to 16% on other cryptos. According to Nexo’s document, it combines staking rewards with rewards from MEV and Ethereum network fee activity to maximise users’ yield.
Nexo facilitates staking on over 35 different crypto assets and operates in over 200 jurisdictions. Moreover, the platform boasts industry-leading security and is backed by institutional insurance to protect against losses.
It varies but around 4%.
No lock-in period
What is Ethereum Staking?
While both PoW and PoS ultimately rely on financial risk to secure a network, PoS does so in a more environmentally friendly way, albeit at the potential cost of increased centralisation and slightly lower security.
To begin validating transactions, Ethereum validators must “stake” cryptocurrency (or deposit it into an Ethereum smart contract). If the validator is found to have acted maliciously, some of its stake will be seized in a process known as “slashing”.
The purpose of this is to incentivise validators to act with good intentions.
Furthermore, validators are financially incentivised with staking rewards resulting from a combination of gas fees and a portion of ETH emissions.
How Does Staking Ethereum Work?
As mentioned, Ethereum relies on network validators to store and validate transactions. However, validating transactions on Ethereum is expensive for the average user. It requires high-quality validating hardware, and the user must stake a minimum of 32 ETH to get started.
Even with 32 ETH staked, three is no guarantee that the validator will be selected to validate blocks regularly; this means the rewards may be inconsistent. As a result, many validators choose to join what is known as a “staking pool”. This is where multiple validators combine their resources to receive more steady and predictable rewards.
Each staking pool member will receive rewards proportional to their pool share.
However, this raises the question of how Ethereum holders with less than 32 ETH can stake their coins.
This provides a more hands-off approach to earning rewards, although delegators must sacrifice a small amount of rewards in return.
The APY validators generate ultimately depend on the total amount of ETH staked and in proportion to their Ethereum staking pool size. If the amount of staked ETH decreases on the network, they will earn a higher APY.
Benefits of Staking Ethereum
Many reasons exist to stake ETH, from financial incentives to ensuring a more robust and decentralised financial system. Let’s take a look at them below.
Potential to Compound Growth
As we have discussed, staking crypto means you can earn passive rewards. However, this is only part of the benefit of ETH staking rewards. The other advantage is compounding gains. Think about it, while 4% of APY on staked ETH may not seem much today, if ETH’s price increases, so does that reward.
For example, suppose the ETH APY was 4%, and then ETH did a 5x; this would equate to a 20% APY gain rather than 4%, plus the additional APY from other years. Moreover, the actual staked ETH would also have seen significant gains in this scenario, adding to the compound effect.
Bolster Ethereum’s Security
As we mentioned, the more ETH staked, the lower the rewards. This is because validating becomes more competitive as the amount of staked ETH increases. While this may reduce earning potential, it means the network’s security is increasing.
The reason is that the more ETH that is staked, the harder it would be for a bad actor to overpower the network by controlling the majority of staked ETH.
More Environmentally Friendly
PoS is a more environmentally friendly alternative to PoS. Consequently, staking Ethereum is a far more eco-friendly way to support blockchain decentralisation than mining Bitcoin. This benefit was also discussed in our BTC20 price prediction, where we highlighted that its staking mechanism is environmentally superior to Bitcoin’s mining mechanism.
Is Ethereum Staking Worth it?
Several factors must be considered when deciding whether Ethereum staking is worth it.
Firstly, you must consider the risk of the underlying asset, Ethereum. Despite the APY that staking offers, your portfolio could still lose value if the price of Ethereum drops. That said, if you are HODLing anyway, the Ethereum staking rewards may offset some of the losses if it goes down.
The second risk to consider is staking risk. This ranges from slashing and other penalties to smart contract risk. If you or the entity you delegated to breaks Ethereum’s rules, some of your stake may be slashed as a punishment.
Moreover, there remains a possibility that your validator could get hacked or attempt to steal the funds.
The best way to mitigate this risk is by sticking with a reputable staking platform with a proven track record, such as eToro.
We have already discussed the benefits of staking in the section above, so it is ultimately up to the individual investor whether ETH staking is worth it. However, the risks are minimal if you already hold ETH and stick with a reputable staking platform.
How to Stake Ethereum
The method to stake Ethereum varies between each staking provider. However, eToro is one of the most accessible platforms, so this section runs through step-by-step how to stake ETH on eToro.
Step One: Create an eToro Account
First, visit the eToro website and create an account. When visiting the eToro home page, select Join eToro and complete the sign-up instructions.
Step Two: Deposit Funds to eToro
Once you have signed up, click the Deposit Funds button at the bottom left of the screen. Then, choose the amount you want to fund your account and enter your payment details.
Step Three: Buy Ethereum on eToro
Head to the search bar at the top of the screen and search for Ethereum. Then click Trade and select the amount you would like to purchase. Complete the purchase by clicking Open Trade.
Step Four: Begin Staking
Finally, you can start staking your Ethereum. The great thing about eToro is that this is all managed automatically, so there is no need to do anything else. eToro will deposit the funds to the investor’s account each month, along with an email explaining the rewards and how they were calculated.
Do You Pay Tax on Ethereum Staking?
For most jurisdictions, the simple answer to this question is yes – any profits earned from cryptocurrency are subject to taxation. However, the exact rules and regulations may differ depending on your location, so it is important to contact a local tax professional for proper guidance.
When it comes to staking ETH, these profits are generally attributed to income tax. This means that you will owe taxes on them based on their value when you receive them.
However, as mentioned earlier, some protocols like Rocket Pool provide a synthetic token that accrues value over time. In this scenario, you may owe tax in the form of capital gains only when you dispose of the asset and realise profits.
Still, consult a local tax specialist to avoid penalties and ensure you comply with all regulations.
Is Ethereum Staking Safe?
When staking Ethereum, it is natural to be cautious of the potential risks. These risks span from smart contract risk all the way to centralisation risk.
Once you have deposited your ETH into its PoS smart contract, it is no longer in your custody and could be stolen by a hacker. While this does present smart contract risk, this risk would be much greater reaching than just the funds lost to the hack.
It would also cause the ETH price to crash, so even unstaked ETH in self-custody would be at risk in this scenario. Also, it is important to mention that Ethereum has some of the most robust security on the market.
Another risk to consider is slashing and other penalties. While you may not face these issues with reputable brokers like eToro, some lesser-known staking platforms may go against Ethereum’s rules for their own gain, risking their delegator’s funds in the process.
As mentioned, Ethereum also faces a centralisation risk regarding its PoS mechanism. While this may not directly affect the security of your staked funds, it is worth being aware of as it could increase regulatory pressure on staking platforms in the future.
This is evident with SEC Chair Gary Gensler suggesting all PoS cryptos are securities.
Nevertheless, despite Ethereum 2.0 staking being a relatively new concept, it has proven to be a robust method of earning passive rewards, particularly for those who stick with a proven staking platform.
Like everything in crypto, staking carries risk. Nevertheless, the passive rewards offered on one of the top-performing assets in recent years provide a viable way to compound crypto gains.
Currently, the best staking platform showing the most potential is BTC20. Besides a revolutionary new staking model, its native token, BTC20, has significant room for growth, with a market cap of just over $12 million. In comparison, the Lido DAO (LDO) market cap is over $1.5 billion.