Making Sense of Ankr Stkr ETH2 & Double-Staking

By drubid | cryptoadam | 19 Feb 2021

Ethereum's a really big deal. It keeps going up, up, up, and the only thing that seems to be getting in its way are expensive transaction fees--a problem that will presumably be resolved by the move to proof-of-stake in Ethereum 2.0.

Given that move to proof-of-stake, I was very interested in getting in on becoming a validator to profit from the reduced need for and dependency on miners. Unfortunately, I don't have the requisite 32 ETH laying around, though.

Still, there's hope! Services like Ankr Stkr allow the poor folks like me to stake ETH2 with as little as 0.5 ETH. Perfect, count me in! That's the starting point for this article, and it's part explaining and part looking for answers. If I say something incorrect, or if you have answers to my questions, please let me know!

I managed to scrape together 1 ETH and staked it with Stkr. In return, I received 0.99 aETH. This is the first step I'm unclear about: why didn't I receive 1 full aETH? I assume it's because of gas fees, but I'm not sure. Still, it was 0.01, which is more than I spent in transaction fees getting it staked, anyway, and so it didn't seem worth worrying about.

After that, I was super excited to have my aETH and be in on the ETH2 action, but then I read about Ankr's new partnership with SnowSwap. This felt like the perfect opportunity to get double rewards by double-staking.

Here's how that works. SnowSwap has an ETH2 liquidity pool (LP) made up of several currencies: wEth, vEth2, aETHB (Ankr's), and crETH2. You can exchange these tokens for SnowSwap's LP token, eth2Snow. Then you can stake the LP token to earn SnowSwap's native token, SNOW.

This brings us to my second question in all this: how do I receive rewards for staking ETH2, and do I forfeit them by exchanging for the LP token?

Despite these questions, I pressed onward for science. I exchanged my 0.99 aETH for 1.007 eth2Snow which I then promptly staked to begin accumulating SNOW at nearly 30% APY. When I decide I'm done staking, I can remove my eth2Snow from the LP and withdraw for a configurable percentage of the staking currencies, wEth, vEth2, aETHB, & crETH2. My assumption is, at that point, I'll be able to recover my 0.99 aETH and essentially be eligible for whatever rewards come from staking ETH2 with Stkr to begin with--and I'll have earned whatever SNOW from staking as bonus profit.

And that's my third and final question: does all that sound about right?

This has been a confusing little adventure, but it's been fun. At this point--one day in--it kinda looks like profit earned from staking with SnowSwap might be enough to cover the Ethereum gas fees, and I definitely have concern that I'm shooting myself in the foot or missing out on a key staking-ETH2-with-Ankr concept.

It's been hard to find documentation on the topic, though, and I'm trying to piece it together.

Help me out, community. Am I messing this up big-time, or is this a legitimate way to double-stake and earn bonus rewards? What do you think?

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