It’s no secret that Ethereum has been one of the hottest topics in the cryptocurrency world over the past year. The price of ETH has soared from around $8 in early 2017 to over $1,000 currently, and the network has seen explosive growth in terms of usage and adoption.
With all this excitement, many people are wondering how they can get involved with Ethereum. One way is to simply buy and hold ETH, but another way is to “stake” ETH and earn rewards for helping to secure the network.
In this article, we’ll take a look at what staking is, how it works, and how much ETH you need to stake in order to earn rewards.
What is staking?
In the simplest terms, staking is when you put your ETH into a smart contract that allows you to earn rewards based on the amount of ETH you have staked.
These rewards come in the form of newly minted ETH, which is created through a process called “mining.” When you stake ETH, you are essentially helping to validate transactions on the Ethereum network and in return you are rewarded with new ETH.
The amount of rewards that you earn will depend on a few factors, including:
The amount of ETH that you have staked
The length of time that you have staked your ETH
The overall amount ofETH that is being staked by all users
The current interest rate (which can fluctuate based on market conditions)
Generally speaking, the more ETH you stake and the longer you stake it for, the more rewards you will earn. There is no minimum amount required to start earning rewards, but there is a maximum limit of 2ETH per person that can be earned per day.
How does staking work?
In order to start earning rewards from staking, you first need to find a reputable Ethereum staking service. Once you’ve found a service that you trust, you will need to send your ETH to their smart contract address.
Once your ETH has been received by the smart contract, it will be “locked up” for a period of time that you specify. This lock-up period can be anywhere from 1 day to 1 year, but most people tend to choose a lock-up period of 1 month or less.
After your ETH has been locked up for the specified period of time, it will then be eligible to start earning rewards. These rewards will be paid out daily and will be automatically sent to your wallet address.
It’s important to note that once your ETH has been locked up in a staking contract, it cannot be withdrawn until the end of the lock-up period. This means that if you want to stop earning rewards or if you need access to your ETH for any reason, you will need to wait until the end of the lock-up period before withdrawing your funds.
How much Ethereum do you need to stake?
There is no minimum amount required to start earning rewards from staking Ethereum, but there is a maximum limit of 2ETH per person that can be earned per day. This means that if you want to maximize your rewards, you will need at least 2ETH worth of Ether tokens.