Read before staking

TLDR

• How the yield is generated?
• Where is the node located?
• Is the pool well-liquid? 
• Have you subscribed?

Transparency

Yield is good, but it is also important to know how your yield is generated. In the last times most of the high-yield providers (Celsius, VOYAGER, VAULD, BLOCKFI, NURI, etc.) What have all those in common? Yes, high yield. My friend's high yield doesn’t come from the air. This yield model should be transparent. On most of the high-yield platforms, they take your staked ETH and do some crazy kinds of stuff with that. They put your ETH on some leverage and get 10–20% out of that and return your 4% of ETH staking. The person who takes the full risk is you.

The nodes must be transparent, and you should watch the rewards coming. Also, look for TVL on the pool. The higher, the better. Make also sure that, your returns are also auto-staked. 

Good to know: On-chain ETH staking yields are currently around 4-5% APY. So anybody offering you less than 4%, means they are fooling you and eating your profit out. If anybody offering you more than 6%, ask them how they generate, this APY.

Do you know what is the difference between APY and APR?

Location

One of the underrated points on staking, especially for ETH, is the location of the hosted nodes. The country where your node locates has a very influence on your nodes as well as the network. Like mining, you might have heard that there was a substantial price drop in BTC when mining was banned in China. 

The hot topic in the USA is now the censorship of crypto. There are a lot of discussions in the media about censorship and sanctions on crypto. The tip here is to look for crypto-friendly countries. The worse thing that could happen is that you lose your staking assets. 

Do you know what crypto-friendly countries are? 

• Malta
• Canada
• Slovenia
• The Netherlands
• Portugal
• Germany
• Luxembourg
• Estonia
• Singapore
• Switzerland
• ……

No full liquidity

What does it mean? 

For now, you won’t be able to trade, send, or sell the amount you have staked. This includes both the originally staked amount as well as any rewards that were received in your account. When the ETH2 upgrade is complete and withdrawals are enabled by the Ethereum network, you’ll be able to send or sell your staked ETH along with all of the rewards you’ve earned.

It is by default, or design, that you can’t get rid of your staked ETH until the Shanghai upgrade. It is not clear when will be it available. Till that, ETH staking is only a one-way road. 

For a good staking pool/node, must be there some liquid secondary market. So that you could sell your staked ETH. 

If I left any points open, please let men in the comments. Let's discuss!

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