After a few weeks of living with Proof of Stake on Ethereum, it seems the switch is a massive success. The Merge went off without a hitch, and staking cut ETH inflation by 98%. However, there are some PoS detractors, as you need to stake 32 ether to become a validator. And many can’t afford such a steep price. With that said, does Proof of Stake on Ethereum hurt the small investor?
Proof of Stake on Ethereum
Staking is like putting your ether in a vault to earn dividends from the accrued earnings. You don’t have access to liquid crypto (with a few exceptions) but make money over time through validation.
It’s an intelligent way to diversify your crypto portfolio and contributes to the Ethereum network. In addition, the blockchain becomes a bit more secure and efficient with every new staked ether. At publication, investors have staked nearly 15,000,000 ETH and have created just over 440,000 validator nodes.
However, few people have nearly $43,000 to throw into Ethereum to create a validator node. Does that mean staking is a highly exclusive investment opportunity in which only the wealthiest holders can invest? Fortunately, that is absolutely not the case.
You can stake less than 32 ETH.
Just because you don’t have enough ETH to activate validator software doesn’t mean you can’t stake any. You can always throw your crypto into a staking pool, where several holders combine their ETH to make a validator.
The earnings are lower, but it allows smaller investors to take advantage of Proof of Stake rewards on Ethereum. Staking pools are also an option if you want your crypto to remain liquid. At publication, there’s no way to “unstake” your ETH if you’re a solo staker.
Some of the most popular staking pool services out there include Rocket Pool, StakeWise, and Lido. These services allow you to stake as little as .01 ETH, or even less in some cases. In addition, the specific pool protocols mentioned are all vetted by Ethereum developers and provide a low barrier of entry for staking.
