MetaMask launches ETH staking service! 10% handling fee makes LSDFi market a hot commodity

MetaMask launches Ethereum staking service, but the handling fee is as high as 10%, which may affect user acceptance and experience.

Since Ethereum completed the merger (The Merge) and transformed into POS in September 2022, more than 28.86 million Ethereum coins have been pledged, equivalent to 10% of the total supply About 24%. Various staking methods have emerged on the market, including solo-staking, through liquidity staking protocols (such as Lido) or centralized exchanges (such as Coinbase).

MetaMask, the mainstream Ethereum wallet, recently released a new service called "Verifier Staking", which will be included in the MetaMask Portfolio. This move is another important development after MetaMask allowed users to stake Lido and Rocket Pool directly in its portfolio in January last year. Through this feature, MetaMask users can easily participate in validator staking activities on the Ethereum 2.0 network. This move further strengthens MetaMask’s position within the Ethereum ecosystem and provides users with more ways to participate in the network.

This "validator staking" service is provided for users who own 32 Ether coins or multiples thereof. It is powered by the Stake service of MetaMask developer Consensys to assist users in safely running nodes and simplifying the staking process to facilitate users to obtain rewards. Additionally, the service reduces the risk of curtailments and downtime.

What pain points are solved?

This new service is particularly attractive to users and beginners pursuing decentralization. Staking through MetaMask solves the centralization issues of large liquidity staking providers such as Lido. According to official data from Lido, more than 32% of all Ethereum is currently pledged through the platform.

In addition, the service eliminates the need for users to purchase and set up hardware, run personal Ethereum nodes, and reduces the risk of curtailment due to network outages.

Consensys is very proud of the past performance of its staking service: in the past two-plus years of operation, we have successfully managed over $2 billion worth of ETH staked by over 33,000 validators without any slashing. Punishment situation.

What is the weakness?

While this new MetaMask validator staking service provides convenience and appeal, the platform charges a handling fee of up to 10%, which may deter some validators.

Note: Coinbase Ethereum staking service charges up to 25% of the staking reward.

In this regard, Lefteris Karapetsas, founder of cryptocurrency portfolio tracker Rotkiapp, said: This new service is an interesting idea, but its high 10% fee is compared to other available staking options on the market. Not competitive enough.

The current annual rate of return for validator staking through MetaMask is 4%, but after taking into account the impact of handling fees, its annual rate of return is equivalent to the 3.4% rate of return provided by Lido.

Staking Steps Tutorial

Through the following steps, you can pledge in MetaMask Portfolio:

Connect your MetaMask wallet to MetaMask Portfolio

Click left Select the "Staking" tab in the sidebar and navigate to "Verifier Staking" at the top of the page

Select the account address

Use the slider to enter the pledged ETH amount (Note: Deposits can only be made in 32 Multiply, i.e. the amount required for one validator)

View staking summary, staking rewards and launch time (note: MetaMask charges 10% from the rewards earned)

Review Then select "Confirm" and sign the transaction in your wallet to approve and submit the pledge deposit.

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