Ethereum
How MetaMask claims it can beat cheaper competitors by expanding its Ethereum offering – DL News
- MetaMask users can now stake small amounts of Ether through the wallet.
- The new offering charges higher fees than market leader Lido.
MetaMask is going all-in on the $116 billion Ethereum staking market.
Consensys, the company behind the best crypto wallet, announced on Wednesday the launch of Pooled Staking, a new offering that will allow those who own small amounts of Ether to pool their tokens and earn staking rewards .
“It’s an easy way to be rewarded for contributing to the security of Ethereum,” said Matthieu Saint Olive, senior product manager at Consensys. DL News. “This solution will be competitive.”
Previously, only users with 32 Ether could stake via MetaMask.
The launch of Pooled Staking puts MetaMask on equal footing with other staking providers that accept small amounts of Ether for staking.
But it could be an uphill battle for MetaMask to break into this highly competitive market.
Saint Olive said MetaMask would charge Pooled Staking users 15% of their staking rewards for its service – far more than the 10% from leading Ethereum staking provider Lido.
The Ethereum staking market is huge. Nearly 33 million Ether tokens worth $116 billion are staked on the blockchain, earning at least 3.1% per yearpaid in Ether.
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The Lido dominates the market, representing almost 29% of all the Ether put into play.
By providing a more accessible option for MetaMask users, Consensys hopes its Pooled Staking feature can compete with dozens of other options, many of which, like Lido, offer lower fees.
Staking Fees
Staking on Ethereum is complex.
This requires extensive technical knowledge, a stable internet connection, and a minimum of 32 Ether, worth $113,000. Errors can lead to significant financial losses.
For this reason, many Ethereum users choose to stake through a third-party provider.
Staking providers typically accept a percentage of rewards – between 10% and 25% – in exchange for helping their users.
On the low end, Lido, Binance Staked ETH, and Mantle Staked ETH charge 10% fees on staking rewards.
Coinbase’s Wrapped Staked ETH is on the high end, charging 25%.
According to Saint Olive, MetaMask’s 15% pooling fee falls somewhere in between.
“Users care more about the rewards they actually receive and the security of the solution than the provider fees themselves,” Saint Olive said.
Security and convenience
The new offering could appeal to more casual crypto users due to its convenience.
MetaMask users can start staking their Ether through the wallet interface.
However, MetaMask also offers users the ability to stake through competing staking providers Lido and Rocket Pool – both of which offer lower staking fees – through the same interface.
As for security, Pooled Staking will use the same staking system used by Consensys Staking, the company’s enterprise-grade staking product.
Consensys claims to have received third-party services safety certifications for Consensys Staking and MetaMask.
Consensys Staking has 33,000 Ethereum validators with over 1 million Ether staked, which equates to 3.3% of all Ether staked, according to the Pooled Staking announcement.
Despite everything, he claims to have never seen one of his validators get slashed.
Slashing occurs when the Ethereum network takes Ether from validators who do not post data when they are supposed to, or do not post the correct data.
In November, Bitcoin Suisse, a company that provides staking services to institutional clients, suffered a Loss of $200,000 after nearly 100 of its validators were fired for attempting to post incorrect data.
In October, 20 Lido validators were also cutcosting the protocol $45,000.
Tim Craig is a DeFi correspondent at DL News. Do you have any advice? Send him an email to tim@dlnews.com.