How to Stake Ethereum: 5 Best Ways

Ethereum, since its release in 2015, has become a core decentralized platform, acting as an international settlement layer for a diverse set of applications beyond the simple peer-to-peer transaction. The guiding principles of Ethereum center on trustless and permissionless interaction, allowing anyone to partake in the network.

The process of staking enables one to be part of the network operation while, in the process, earning passive income. In this article, I will explain Ethereum, how to stake Ethereum, how Ethereum staking works, and highlight the five major methods through which individuals and institutions can participate.

#Understanding Ethereum

One of the significant achievements in Ethereum's history was "The Merge," which was completed on September 15, 2022, which brought the network's transition from Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism, a fundamental alteration with the aim to increase scalability while reducing energy consumption. This transition was a key component of the broader "Ethereum 2.0" upgrade.

Following the Merge, Ethereum has continued to evolve through crucial upgrades. In 2023, the Shanghai-Capella enabled the much-anticipated withdrawal of staked Ether (ETH). More recently, the Dencun upgrade, implemented in March 2024, introduced proto-danksharding (via EIP-4844). This enhancement significantly reduces transaction fees for Layer 2 scaling solutions, making the Ethereum ecosystem more accessible and cost-effective.

Looking ahead, the Ethereum network successfully implemented the highly anticipated Pectra upgrade on May 7, 2025. This upgrade brings further advancements, including a substantial increase in the maximum staking limit for validators from 32 ETH to 2,048 ETH (through EIP-7251), and the implementation of the Smart Accounts Revolution (EIP-7702), which aims to simplify blockchain interactions for users.

#What is Ethereum Staking?

Ethereum staking, at its core, is the process that underpins the PoS consensus mechanism. Ethereum staking is a core component of Ethereum’s Proof-of-Stake (PoS) consensus mechanism, which replaced the original Proof-of-Work (PoW) system in the Ethereum 2.0 upgrade, finalized during the Merge in September 2022.

Ethereum staking involves locking up ETH tokens to support the Ethereum network's operations—such as validating transactions and securing the blockchain.

#How does Ethereum Staking Work?

Validators play a crucial role by staking their ETH to validate transactions and secure the blockchain. These validators are responsible for proposing new blocks of transactions and attesting to the validity of blocks proposed by their peers. This process ensures the integrity of the transaction history and maintains the overall security of the Ethereum network. In return, participants receive rewards in the form of newly issued ETH and transaction fees.

#Ethereum Staking Rewards

In return for validators' participation and commitment to the network, those who stake ETH have the potential to earn yield. The annual percentage rate (APR) for staking rewards can vary, influenced by factors such as the total amount of ETH staked across the network and the level of network activity.

These rewards are generated from two primary sources: consensus layer rewards, which are newly created ETH issued by the protocol to incentivize validators, and execution layer rewards, which consist of transaction fees paid by users and the potential for Maximal Extractable Value (MEV) gained from optimizing transaction ordering within blocks.

#How Much Ethereum do you Need to Stake?

To run your own validator node on Ethereum, you'll need a minimum of 32 ETH. However, participating in Ethereum staking through various staking pools allows you to stake smaller amounts of ETH while still earning rewards without the need to maintain your own node. We've provided the exact overview in the chart below.

#How to Stake Ethereum: The 5 Best Ways

Depending on the needs and considerations, below are five primary ways that individuals and institutions can stake their Ethereum. Each of these approaches has a varying degree of pros and cons, accommodating different levels of technical expertise, financial investment, and risk tolerance.

#1. Running Your Own Validator Node

This method involves setting up and maintaining your own dedicated Ethereum validator node. The primary requirement is having 32 ETH to deposit as stake, along with significant technical expertise to set up and continuously maintain the necessary hardware and software.

The pros of running your own validator node include having full control over the entire staking process and your validator keys. This method also offers the potential for higher rewards, as you receive the full staking rewards, including any MEV generated from the blocks you propose.

The cons include the high complexity involved in the initial setup and ongoing maintenance of the node, a higher risk of incurring downtime penalties due to potential technical issues or internet instability, and the challenges associated with ongoing technical maintenance. You could use these resources to aid your node deployment.

If you are interested in running your own validator node, check our detailed guide here: How to Run an Ethereum Node: Step-by-Step.

#ETH Node Requirements: Technical & Financial

• Minimum ETH Requirement:

  • 32 ETH is required to run an independent validator node (acts as collateral and enables validator software).

• Recommended Hardware Specifications:

  • CPU: Multi-core processor (minimum 4 cores; 8+ cores recommended for better performance).
  • RAM: At least 16GB (32GB preferred).
  • Storage: Fast SSD required.
    • 2TB NVMe SSD is acceptable.
    • 4TB NVMe SSD recommended for future-proofing.
    • Preferably includes DRAM cache for optimal IOPS.

• Internet Connection:

  • Stable broadband connection required.
  • Speed: At least 5–20 Mbps for both upload and download.
  • Higher speeds (up to 50 Mbps) may be needed if using MEV-Boost or building blocks locally.
  • Data Plan: Minimum of 2TB/month to handle bandwidth demands.

• Wallet Setup:

  • Required for managing staked ETH and rewards.
  • Options include:
    • Software wallets: e.g., MetaMask.
    • Hardware wallets: e.g., Ledger, Trezor (offer greater security).

Further reading: Best Web3 Infrastructure Providers

#2. Centralized Exchanges

Many centralized cryptocurrency exchanges, such as Coinbase, Binance, and Kraken, offer staking services to their users. This method is generally user-friendly and requires minimal to no technical setup. A significant advantage is the lower or no minimum ETH amount requirements compared to running a solo validator.

However, a major con is the custodial risk, as the exchange holds the private keys to your staked ETH. You also have less direct control over the specific staking parameters, and exchanges typically charge a commission or fee on the staking rewards.

#3. Non-Custodial Staking Services

These services offer a middle ground, allowing users to maintain control of their private keys while still benefiting from professional management of the staking process. Often, users delegate their validator keys to the service provider but retain control over their withdrawal keys.

The pros include achieving a balance between ease of use and retaining custody of your ETH. The cons are that these services typically charge service fees and require a certain degree of trust in the provider's operational expertise and security measures. Examples of such services include Kiln and Everstake.

#4. Staking Pools

Staking pools allow multiple Ethereum holders to pool their ETH together to reach the 32 ETH threshold required to run a validator. This significantly lowers the barrier to entry, as users can participate with any amount of ETH, often starting from very small fractions. It also allows for risk mitigation through the pooling of resources.

The main considerations are that pool management fees are typically charged, which can reduce the overall returns, and the individual rewards might be slightly lower compared to running a solo validator. Popular platforms that facilitate decentralized pooling include Rocket Pool and Lido.

#5. DeFi Staking Platforms

The decentralized finance (DeFi) ecosystem offers various platforms that allow users to stake ETH in flexible arrangements, often with the potential for enhanced yields through yield-enhancing derivatives like liquid staking tokens. A significant pro is the increased liquidity options provided by liquid staking tokens (LSTs) such as stETH (from Lido) and rETH (from Rocket Pool).

These tokens can be traded or used as collateral in other DeFi protocols, offering greater flexibility. DeFi platforms also often provide flexible staking durations and seamless integrations with other DeFi products, potentially leading to higher overall yields. The main cons include the exposure to smart contract risks inherent in DeFi protocols and the potentially higher volatility associated with the DeFi markets. Examples include platforms like Lido and Rocket Pool, which, as mentioned, also operate as staking pools.

To provide a clearer perspective on the different Ethereum staking methods, a comparative analysis based on several key factors is presented below.

#How to Stake Ethereum: The Decision-Making Guide

The choice of Ethereum staking method should be aligned with individual user profiles and their specific needs and preferences.

• Independent Operators: Individuals or teams possessing strong technical expertise and the required capital (32 ETH) who prioritize maximum control over their staking operations and are comfortable managing the associated risks and responsibilities will find running their validator node the most suitable option.

• Casual Investors: For individuals with smaller amounts of ETH and limited technical expertise who seek a straightforward way to earn rewards, centralized exchanges offer the most accessible option, despite the inherent custodial risks.

• Users Seeking Balance: Those who desire a balance between ease of use and retaining control over their ETH might opt for non-custodial staking services. This method requires some familiarity with blockchain platforms but offers greater security than centralized exchanges.

• Community-Oriented Users: Individuals looking to participate with smaller amounts of ETH and contribute to the network's decentralization while accepting potentially slightly lower individual rewards may find staking pools to be a good fit.

• DeFi Enthusiasts: Users who are comfortable navigating the decentralized finance ecosystem and are seeking potentially higher yields and greater flexibility through liquid staking tokens and other DeFi integrations might prefer staking on DeFi platforms, keeping in mind the associated smart contract and market volatility risks.

#What are the Risks Associated with Ethereum Staking?

While staking offers the opportunity to earn rewards and contribute to the network's security, it is crucial to be aware of the inherent risks involved. One significant risk is slashing, a penalty mechanism where validators can lose a portion or even all of their staked ETH for engaging in malicious behavior or failing to meet their responsibilities, such as by proposing conflicting blocks or experiencing prolonged periods of downtime.

Validators also face downtime penalties for failing to remain online and active, which can result in a reduction of their potential rewards. Finally, while withdrawals are now enabled, it's important to remember that the initial act of staking involves committing ETH to the network, and the process of unstaking still requires a certain period, during which the staked ETH is not readily liquid. Let's look at each in more detail.

#1. Network and Protocol Risks

A primary concern for Ethereum stakers is the potential for slashing. This penalty can be imposed on validators for various infractions, including proposing and signing two different blocks for the same slot or attesting to blocks in a way that contradicts the network's history. Slashing can result in an immediate loss of a portion of the staked ETH, and in extreme cases, the entire stake could be at risk.

While historically rare, with less than 0.04% of validators slashed as of February 2024, it remains a significant risk to consider. Validators also face downtime penalties for failing to remain online and actively participate in the network's consensus process. Consistent uptime is crucial for maximizing rewards and avoiding these penalties.

Furthermore, the Ethereum protocol is not static and is subject to ongoing development and upgrades. These changes could potentially affect staking mechanics, reward structures, and associated risks.

#2. Liquidity and Lock-up Periods

While the Shanghai upgrade enabled withdrawals, it's important to understand that staking Ethereum still involves a period of illiquidity. While you can now unstake your ETH, the process itself takes time and is subject to network conditions. This means that investors need to consider their liquidity needs before staking, as their ETH will not be immediately available for trading or other uses. Solutions like liquid staking, which provide tradable tokens representing staked ETH, can help mitigate this risk by offering a way to access liquidity while still earning staking rewards.

#3. Custodial and Counterparty Risks

Choosing a staking method also involves considering custodial and counterparty risks. Using centralized exchanges or other custodial staking services means entrusting your ETH to a third party. This exposes you to risks such as potential hacks of the platform, the platform becoming insolvent, or regulatory actions that might affect your access to your funds.

In contrast, running your validator node or using non-custodial staking services allows you to maintain control of your private keys, mitigating these counterparty risks. However, with increased control comes greater responsibility for securing your keys and managing your staking setup effectively.

#Conclusion

When choosing how to stake Ethereum, consider your technical skills, financial resources, risk tolerance, desired control, and liquidity needs. Solo staking is ideal for those with technical expertise and 32 ETH, offering full control. For smaller holders or lower-risk preferences, centralized exchanges, staking pools, or DeFi platforms may be more suitable. Liquid staking solutions are best if short-term access to funds is important.