MetaMask Introduces Staking Service, Bypassing Ethereum's High Minimum Requirement
Summary:
MetaMask, a crypto wallet firm, has launched a staking service that enables users to pool their funds and stake their Ether (ETH) in validators run by blockchain software company Consensys. The service allows users to bypass Ethereum's high minimum requirement of 32 ETH. Consensys's senior product manager Matthieu Saint Olive said this pooled staking service strengthens Ethereum's decentralization and security. The service is not yet available in the U.S. or the U.K., but the company aims to introduce it in these regions soon.
MetaMask, a cryptocurrency wallet company, has launched its staking service. This service allows their users to gather their funds and place a stake in enterprise-level validators, managed by blockchain software firm Consensys. The MetaMask's service enables users to stake Ether (ETH) without having to abide by Ethereum's hefty minimum requirement of 32 ETH; equal to around $112,000 at present. Thanks to MetaMask's staking pool, users can contribute less than the necessary ETH and qualify for rewards associated with network security.
Upon Ethereum's upgrade to a proof-of-stake (PoS) consensus method, the network has transitioned from mining to a staking model. Through this new model, the network seeks validators to process transactions, store data and add blocks to the Beacon Chain. Validators play a pivotal role in maintaining the security and decentralization of the network.
Matthieu Saint Olive, Consensys's senior product manager expressed that MetaMask's pooled staking service enhances Ethereum's security and decentralization. He noted the decentralized nature of the underlying validator infrastructure and its worldwide dispersion, as well as the advantages of having more users involved in staking.
Validators in the Ethereum network receive interest on their staked coins in recognition of their contributions. However, there is a risk of loss involved if a validator fails to perform its duties or resorts to collusion, an act known as “slashing.”
Despite potential rewards, not everyone can afford the steep minimum entry point of 32 ETH. With ETH's price surging past $3,000, the cost of becoming a validator has become significantly expensive. According to the MetaMask team, 99% of ETH owners possess less than 32 ETH and about 74% of ETH currently remains unstaked, with most staked ETH held in larger pools.
MetaMask's new service seeks to resolve this disparity by enabling users with less than 32 ETH to participate in staking through Consensys's validators. They can withdraw their staked assets "at any time" subject to the exit queue protocols of the validators.
Unfortunately, this service is not yet available in the U.K. or U.S., although MetaMask is working to introduce the service in these jurisdictions soon. Saint Olive stated that the U.S. regulatory framework is undergoing significant changes regarding Ethereum staking policy. He also mentioned that further regulatory guidance is expected in the U.K., which could provide more clarity for the staking market.
Published At
6/12/2024 1:00:00 PM
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