The launch of Ethereum 2.0 has created a new hype around staking in the Blockchain ecosystem. Users were invited to become validators and were offered the opportunity to lock-in their ETH in return for passive staking rewards from 4.9% up to 21.6%. However, not all users can stake on the ETH 2.0 launchpad as it requires a minimum threshold amount of 32 ETH (currently valued over US $19,500+). Not only that, but the launchpad will also lock users’ ETH for a minimum of 18 months, rendering their ETH liquid for other opportunities such as DeFi or yield farming.
Suppose a user does not meet the minimum requirements of staking with the ETH 2.0 launchpad but still wishes to participate in staking to earn passive rewards. In that case, they can consider staking with alternative platforms such as StakeHound. StakeHound offers all ETH holders the opportunity to earn passive staking rewards by removing the ETH 2.0 launchpad’s entry barriers, such as the minimum 32 ETH threshold or the 18-month lock-up duration. Eliminating such barriers may lead to a mass-adoption of staking.
ETH Moving to Proof-of-Stake
The launch of ETH 2.0 marks the beginning of the new Ethereum network that utilizes the Proof-of-Stake (PoS) consensus mechanism, shifting away from the existing Proof-of-Work (PoW).
The use of this new consensus algorithm is touted to be several times more efficient, scalable, and secure than the current Ethereum infrastructure. Not only that, but PoS promises stake rewards to users who will stake with ETH 2.0. So what staking rewards will users receive if they stake with ETH 2.0?
ETH 2.0 Rewards
When users choose to stake with ETH 2.0, they can earn rewards up to 22.5% APY on their ETH. This is a high annual rate, especially for a passive staking income. But as more users stake with ETH 2.0, the lower the estimated annual percentage return (APY) becomes. To enjoy these staking rewards, users are required to lock-in a minimum amount of 32 ETH for what is expected to be 18-24 months, thus making users’ ETH illiquid and participation in other opportunities, such as DeFi or yield farming impossible.
Users are also expected to run a validator node when they stake with ETH 2.0. If users are unable to perform their duties as a validator, they are faced with the prospect of their rewards being slashed. Fortunately, there’s an alternative solution for stakers to reap still the staking rewards while having liquidity for their assets.
StakeHound is an alternative staking platform that allows users to stake with ETH 2.0 and, at the same time, maintain access to liquidity. StakeHound issues users wrapped token or stETH upon ETH deposit backed 1:1 with the underlying staking ETH. With liquid staking, users can stake their ETH and receive stETH in return. As users have full control over their stETH, users don’t have to worry about lock-ups.
The staking rewards received will be distributed directly into users’ accounts. stETH complies with the universal ERC-20 standard, allowing for easy integration into DeFi protocols, wallets, and exchanges.
Apart from stETH, Stakehound also issues the HOUND token, the platform’s governance token, and the fuel that ignites the liquid staking ecosystem. HOUND is set to go live in Q1 2021. The platform also incentivizes everyone to become a liquidity provider by creating a sustainable, community-driven ecosystem.
StakeHound Bonus Program
Early adopters and liquidity providers will get HOUND tokens from various yield farming and early adopter programs. We call it the hunt. This program allows early adopters to participate in StakeHound’s staking program and enables users to maximize their rewards. Every time StakeHound is launching a new coin, users can participate in a new hunt and multiply their HOUND rewards up to a 1.7 multiplier.
- Hound Fan (1 x Bonus): Users will need to acquire stETH before Q1 of 2021 directly on StakeHound to become a Hound fan. The rewards will be proportional to the percentage of their total stETh purchase. More details about this will be available soon.
- Hound Master (+0.2 Bonus per Hunt): Users can purchase as many stETH as users want during the Hunt to increase their HOUND token multiplier by 0.2. Users are also allowed to participate in multiple Hunts to increase their multiplier.
- Hound Hero (+0.5 Bonus): If a user wants to increase their multiplier by an extra 0.5x, participate in every StakeHound Hunt available before the launch of the HOUND token.
The Ethereum network offers many passive income opportunities to its users, including yield farming and staking. Unfortunately, most users are left to choose between the two options due to the lock-in period with staking. Fortunately, alternative platforms such as Stakehound offer an innovative way to reap staking rewards while participating in the DeFi ecosystem.