The switch removed the need for energy-intensive mining equipment essentially overnight, replacing these machines with a leaner staking mechanism. In order to become a validator of this network, users must first put up 32 Ethereum.
They can earn a percentage yield for doing this and validating the network honestly, or, conversely, can face hefty fines on those staked funds should they behave maliciously.
Despite the lucrative yield on offer, which today can earn users up to 4%, putting up 32 ETH, or roughly $42,000, is a big ask for many. Services like Lido and Rocket allow investors to stake any amount of Ethereum and still earn their rewards.
And besides the hefty upfront charge, once those funds are staked, they can’t be removed (until the next Ethereum upgrade).
Here’s why Shanghai has become such a highly-anticipated upgrade. Once executed, this change will let users withdraw their staked Ethereum.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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