We do the research, you get the alpha!
MetaMask, a leading Ethereum wallet and browser extension, has launched its pooled staking service, allowing users to stake any amount of ETH.
Ethereum staking is the mechanism by which validators on the proof of stake network participate in consensus, or the verification of transactions before they're added to the blockchain. If their nodes process blocks of transactions that are online and process blocks when assigned, they collect rewards. And if they don't, they can see their staked ETH slashed as a penalty.
But users need 32 ETH to become a validator—a criteria that 99% of holders fall short of, MetaMask said in its press release.
The pooled staking will allow MetaMask users to stake any amount of ETH and earn rewards for contributing to the network's security. The service is currently available to a small group of users, with a broader rollout expected soon.
However, it will not initially be available in the United States or United Kingdom.
The crackdown on staking services in the U.S. has been severe. In 2023, the Securities and Exchange Commission fined Kraken $30 million in a settlement over charges that its crypto staking service constituted an unregistered offering of securities. Coinbase saw its staking service curtailed after the SEC made similar allegations against the San Francisco-based crypto exchange.
In the U.K., things are a bit less dire—but still unclear.
Economic Secretary to the Treasury Bim Afolami promised in Feburary this year that staking and stablecoin rules would be read in six months. When asked about progress during a Financial Times Crypto and Digital Asset Summit, he said he's still confident the rules will be implemented.
"What I’m very confident we’ll be able to achieve is the secondary legislation around staking and stablecoins," Afolami said during the London event. "Those two things are absolute priorities in the coming weeks and months."
Some members of the Ethereum community have seen the regulatory pressure or lack of clarity as an opportunity to further decentralize the network. As it stands, the U.S. accounts for 50% of all validator nodes on the network, followed by Germany with 12%, South Korea with 6%, and the UK with 4%, according to Etherscan.
Matthieu Saint Olive, senior product manager at Consensys—the company behind Metamask—emphasized the simplicity and control offered by the new service. “MetaMask users now have an easy way to stake ETH in enterprise-grade validators while maintaining full control of their ETH, earning rewards, and making Ethereum more secure,” he said.
MetaMask's pooled staking is backed by Consensys Staking, which manages over 33,000 Ethereum validators and more than 1 million ETH staked. The company boasted in its press release that its has zero slashed validators and a 99.9% validator participation rate.
MetaMask's move into pooled staking pits it against established players like Lido and Coinbase, which does still offer its staking service internationally and in several U.S. states. Together the two providers account for almost 45% of the 33 million ETH—worth $116 billion at the time of writing—that's been staked on the network.
Lido, the largest liquid staking platform, allows users to stake ETH and receive Lido Staked Ethereum (stETH) tokens, which can be used in DeFi applications while earning an annual percentage yield (APY) around 3.8%. The project's extensive liquidity and integration with numerous dApps make it a formidable competitor.
Meanwhile Coinbase, though it has had to cut back on its staking service availability, is still the second-largest pooled staking provider by a wide margin. Its 15% portion is three times the size of the next couple competitors Figment, Ether.fi, and Kiln.fi.