Ethereum users can now stake an entire validator directly from MetaMask

The new product from MetaMask does away with the requirement for complicated hardware or pooling to operate an Ethereum validator node. But it comes with a 10% fee. With the help of a new staking service from cryptocurrency wallet provider MetaMask, Ethereum users can now operate their validator nodes for a fee.

On January 18, the cryptocurrency wallet provider introduced validator staking via MetaMask Portfolio. MetaMask will manage the validator node on behalf of stakers who deposit 32 Ether. This is a significant amount, equal to about $78,752 at the current price of Ethereum.

It said, “We run your node securely, streamlining your staking rewards while reducing risks of slashing and downtime,” and that neither pooling nor hardware is needed.

MetaMask Staking Service and Decentralization Benefits

Beginners and/or decentralists may find the new service alluring because it addresses the centralization concerns raised by big liquid staking providers like Lido by staking via MetaMask. 

It eliminates the risk of internet failures and the need to buy equipment for operating a personal Ethereum node. The service’s manager claimed over two years of existence, managing $2 billion worth of ETH across more than 33,000 validators, without receiving any slashing penalties.

Currently, 3.8% is yielded by staking using MetaMask; however, the company also charges a 10% commission on validator awards. The new service is an “interesting idea but a 10% fee makes it a completely unattractive option for any user who bothers to compare with the other available options out there” according to Lefteris Karapetsas, the founder of the cryptocurrency portfolio tracker Rotkiapp.

Staking with MetaMask produces yields that are comparable to Lido’s 3.4% yield after removing its expenses. Lido is the industry’s leading liquid staking platform, with 9.3 million ETH worth $22.9 billion currently staked. This accounts for around 40% of the total 28.8 million ETH invested, according to Ultrasound. Money. Staking accounts for around 25% of Ethereum’s total circulating supply.

Aside from decentralized staking companies, Ethereum holders can use centralized exchanges like Coinbase, which takes a hefty 25% share of staking rewards.