in Learn, Ethereum (ETH)
The Ethereum merge is improving the ETH staking reward.
Here’s how to take advantage of that opportunity, and earn some extra money with Lido ETH staking.
Why does Ethereum need Lido?
The problem with staking on Ethereum is that running your own node requires 32 ETH, which can amount to more money than it costs to buy a house.
Most people who want to stake Ethereum don’t have access to that much capital. Or, even if they do, they might not want to risk that much money. ETH staking Lido solves the problem, since it allows users to stake small denominations of Ethereum.
Lido makes money by charging users a fee for their staking service. Currently the fee is 10% of all earned rewards, however, that could change in the future. The Lido protocol keeps some of the fee, and distributes the rest to the validators running the staking nodes.
Lido is the most popular Ethereum staking protocol and currently has 4.2 million ETH in user deposits. Claims on staked Ethereum are represented as stETH, an ERC20 token that trades widely throughout Ethereum’s decentralized finance ecosystem. It’s also supported in Exodus!
If you’re ready to start earning passive income on your crypto, here’s how to stake Ethereum with Lido and Exodus.
How to stake ETH with Lido
Staking ETH with Lido only takes a few minutes. Here’s how to do it.
Install a crypto browser wallet
Install the Exodus Web 3 wallet on Chrome or Brave. It’s free for Chrome and Brave web browsers.
What this video for a step by step on staking ETH with Lido:
Should you buy stETH instead of staking ETH with Lido?
Before you start staking ETH with Lido, you should check the markets to see if you can buy stETH at a discount. It’s important to realize that stETH is not pegged to ETH, and a divergence in the price is not a cause for alarm. The markets set the ETH/stETH rate, it’s not a peg like USDC or DAI to the US dollar.
Lido is well-aware that stETH can trade at a discount, and Lido’s website lets everyone know how much they can save by buying from a DEX. stETH could even trade for a premium in the future. Before you stake Ethereum with Lido, always check the markets to see if there is a better deal.
Staking ETH with Lido risks
Lido currently controls about 32% of all staked ETH. One entity controlling that much staked Ethereum creates a potential centralization risk.
To be fair to Lido, the community did create a DAO vote on whether the protocol should set a self-limit and put a cap on the amount of ETH that can be staked, but the 278 respondents (13 of whom owned upwards of 1million LIDO tokens) voted overwhelmingly against the idea.
While there is no immediate threat from Lido controlling the lion’s share of all staked ETH, it’s still a risk that users should pay attention to. Lido have provided this useful resource on their website, for a full list of the risks involved in using the protocol.
How to buy stETH
Lido is a great option for anyone who wants to stake their Ethereum and earn some passive income. If you want to buy stETH instead of staking ETH, you can get your coins through Exodus. You can buy stETH and other cryptocurrencies in Exodus, in any way you prefer:
- Use a credit / debit card, bank account, or Apple Pay. The easiest payment gateway, Ramp or MoonPay, is chosen for you depending on your region and availability.
- Exchange Bitcoin and 200 other cryptocurrencies for stETH using the built-in exchange appLink your Exodus wallet with the FTX exchange for even more options
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.