The upgrading of Ethereum’s network to ETH2.0 did not only bring about the benefits of greater scalability and faster transaction speeds. It has also given rise to many staking platforms.
Is this good or bad? This is a question most Ethereum users don’t really pay attention to. For many, what matters is that they have a platform to use in order to earn staking rewards. However, different platforms have different policies and features.
Here’s a rundown of some of what staking platforms are offering to differentiate themselves from others.
At least one staking platform acknowledges the issue of custodial staking, which is the default for most platforms. Under this arrangement, there is a centralized service that manages all of the ETH staking process on behalf of the user. This means that the service provider takes custody of the user’s private validator keys and withdrawal keys.
Custodial staking comes with a number of risks. For one, it would be difficult for users to guarantee the security of their keys. They have no influence on how the custodian secures the keys. Additionally, the setup is predisposed to the chances of suffering from reduced rewards and drastic slashing penalties.
Non-custodial stalking platforms eliminate the said risks while ensuring a high level of transparency. They usually employ open source systems and rigorous auditing. Also, many of them maintain a policy of not taking a share from user rewards.
There are also platforms that follow the semi-custodial model. Under this approach, the staking service provider usually advertises its platform as non-custodial in nature, but they actually require users to surrender their validator keys. Users get to keep their withdrawal keys but not the ones for validation. This model serves as an acceptable enough compromise for both the staking service platform and the users. It comes with the risk of suffering from severe slashing penalties and reduced rewards, but it is less prone to successful cyber theft or hacking attacks
Staking through decentralized apps
The dApp TronPredict has found an opportunity to become a staking platform by introducing TronPredictToken in TronPredict V3.0. Users get to earn this new token whenever they stake their prediction on TronPredict. The amount that can be earned is based on how much TRX was invested.
This is not necessarily the standard idea of staking, but it is an innovative approach by decentralized apps to offer something based on the idea of ETH staking. In a way, it helps promote a sense of reliability among users by making them go back to the platform later.
Staking through ETH wallets
This idea of staking has been made popular by CryptoLocally, which released the second generation of its Finance Wallet back in November 2020. The upgraded wallet makes it possible for users to earn staking rewards. CryptoLocally integrates popular decentralized finance protocols such as Maker and Aave to enable easier yield farming under a non-custodial staking model.
With the growing popularity of Ethereum and the news of its rising prices, it is not unlikely for it to come close to the success of Bitcoin. With this comes the emergence of more staking platforms in their various forms and innovations.