MetaMask Introduces Validator Staking Service for Ethereum with a 10% Fee
Crypto News – On January 18th, MetaMask, a leading cryptocurrency wallet provider, unveiled its new staking service, allowing Ethereum users to operate their own validator nodes – but not without a cost.
MetaMask Portfolio now offers validator staking, a feature that eliminates the need for users to pool their resources or invest in complex hardware to run an Ethereum validator node. Instead, MetaMask will take care of running the validator node on behalf of users who deposit a minimum of 32 Ether, which, at current Ethereum prices, equals approximately $78,752 – a substantial investment.
One key advantage of this service is the absence of the pooling requirement and hardware demands. MetaMask emphasizes that they will securely manage the node, streamlining the staking rewards process while reducing the risks associated with slashing and downtime.
Introducing Validator Staking on MetaMask Portfolio.
— MetaMask
With a 32 ETH deposit, we run your very own validator node where you're always in control.
No pooling. No hardware. Just rewards.
https://t.co/rmCtgs86WO pic.twitter.com/R8VRttP2XX
(@MetaMask) January 18, 2024
This offering may particularly appeal to newcomers and decentralization advocates, as staking through MetaMask could address concerns about centralization seen in larger liquid staking providers like Lido. Furthermore, it eliminates the need for users to purchase their own hardware for running a personal Ethereum node and reduces the risk of slashing due to internet outages.
Consensys, the entity managing this service, highlights an impressive track record, having never incurred slashing penalties in over two years of operation while overseeing more than $2 billion worth of ETH across over 33,000 validators.
However, it’s worth noting that while MetaMask’s staking service currently yields a 3.8% annual return, the platform also imposes a 10% commission on validator rewards. Some users find this fee less attractive when compared to other available options, with Lido offering similar yields at 3.4%.
Lido remains a dominant force in the liquid staking platform sector, with a staggering 9.3 million ETH, valued at $22.9 billion, staked on its platform. This accounts for roughly 40% of the total 28.8 million ETH staked in the industry, as reported by Ultrasound.Money. Notably, around a quarter of Ethereum’s total circulating supply is currently locked in staking.
For Ethereum holders seeking alternatives, centralized exchanges like Coinbase also provide staking services, albeit with a significant 25% cut of staking rewards.
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