MetaMask Launches Ethereum Staking

MetaMask, a prominent Ethereum wallet and browser extension, has recently introduced its pooled staking service, which enables users to stake any quantity of ETH.

Consensys has announced that Ethereum users now can “stake ETH in enterprise-grade validators while maintaining full control of their ETH”

Ethereum staking is the method by which validators on the proof of stake network assist in verifying transactions before their inclusion in the blockchain or consensus. Rewards are collected by their nodes when they process blocks of online transactions and process blocks when assigned. Failure to comply may also result in a reduction in the amount of ETH staked as a penalty.

However, MetaMask stated in its press release that 99% of holders do not meet the requirement of 32 ETH to become a validator.

MetaMask users can stake any quantity of ETH and receive rewards for contributing to the network’s security through pooled staking. The service is presently accessible to a limited number of users, and it is anticipated that a more extensive rollout will occur shortly.

Nevertheless, it will not be accessible in the United States or the United Kingdom at the outset.

The United States has implemented a severe assault on staking services. Kraken was fined $30 million by the Securities and Exchange Commission in 2023 as part of a settlement regarding allegations that its crypto staking service was an unregistered offering of securities. The SEC’s allegations against the San Francisco-based cryptocurrency exchange resulted in the termination of Coinbase’s staking service.

The situation in the United Kingdom is somewhat less bleak, although it remains uncertain.

In February of this year, Economic Secretary to the Treasury Bim Afolami pledged that the staking and stablecoin regulations would be reviewed within six months. At the Financial Times Crypto and Digital Asset Summit, he expressed his continued confidence in implementing the regulations when asked about progress.

Afolami expressed confidence in achieving secondary legislation regarding stablecoins and staking during the London event. “Those two things are priorities in the coming weeks and months.”

The regulatory pressure or lack of clarity has been perceived by certain members of the Ethereum community as an opportunity to decentralize the network further. Currently, the United States is responsible for 50% of all validator nodes on the network, with Germany following at 12%, South Korea at 6%, and the United Kingdom at 4%, according to Etherscan.

Matthieu Saint Olive, senior product manager at Consensys, the company that developed Metamask, underscored the new service’s simplicity and control. “He stated that MetaMask users now have a simple method to stake ETH in enterprise-grade validators while still maintaining full control of their ETH, earning rewards, and enhancing the security of Ethereum.”

MetaMask’s pooling staking is supported by Consensys Staking, which operates over 33,000 Ethereum validators and has staked over 1 million ETH. The company announced in its press release that it has a 99.9% validator participation rate and has not eliminated any validators.

MetaMask’s transition to pooled staking places it in competition with established entities such as Lido and Coinbase, which continue to provide their staking service in numerous U.S. states and internationally. The two providers collectively hold nearly 45% of the 33 million ETH—currently valued at $116 billion—staked on the network.

Lido, the most extensive liquid staking platform, enables users to stake ETH and receive tokens of Lido Staked Ethereum (stETH). These tokens can be utilized in DeFi applications and generate an annual percentage yield (APY) of approximately 3.8%. The project is a formidable competitor due to its extensive liquidity and integration with various dApps.

Coinbase remains the second-largest pooled staking provider by a significant margin, even though it has had to reduce the availability of its staking service. Three times the extent of the next two competitors, Figment, Ether.fi, and Kiln.fi, is its 15% portion.