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13th June 2024 > > ETH staking.

Updated: Jun 15


Some complex ETH re-staking options, and a very simple ETH staking option.

Market Snap

Market Wrap

A round-trip from $67k to $70k and back again in the last 24-hours suggests that volatility might be back. The cause of these gyrations is the market’s uncertainty of just how incompetent the Fed will prove to be in reacting to highly questionable inflation data between now and the US election.

Curious Cryptos’ Commentary – More re-staking options

On 5th of June, we looked at one option available to potentially double the annual rewards from liquid staking of ETH without incurring any risk of liquidation from leveraging stETH:

Lido, the creator of stETH, has launched a new product to allow re-staking of stETH within what will become customisable vaults:

Initially limited to only four options, various rewards will be paid which might perhaps give a significant boost to the annual return from staking ETH.

The key risk arising from financial engineering of this sort is contract risk. For well-established protocols that have been thoroughly tested, and that undergo ongoing audits and monitoring, this is a tail-risk, but it is one that should not be overlooked. Further mitigation can be easily achieved by spreading your re-staking decisions over these four vaults and liquid re-staking offered by Kiln using Eigen Layer.

One further consideration is that using one of these vaults means that you swap stETH for wstETH (Wrapped stETH) which is a taxable event in the UK. With CGT set to double or more for the 2025/2026 tax year following next month’s election, bringing forward capital gains into this tax year whilst maintaining full exposure to ETH looks like a smart move to me.

Curious Cryptos’ Commentary – Simple staking

If you are uncomfortable with liquid staking tokens and re-staking, MetaMask is rolling out pooled staking for any notional size of ETH that you may hold in a MetaMask wallet. Dedicated staking is set at 32 ETH, more than $100k in value, and possibly out of reach for many people, so pooled staking has long been a means of overcoming this barrier.

I still maintain that you would be better off storing and staking ETH using a Ledger Nano X, but if you are wedded to hot wallets, MetaMask staking is a simple solution.

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