With the release of MetaMask’s new pooled staking capability, Ethereum staking becomes more accessible to all users by removing the 32 ETH threshold.
TakeAway Points:
- MetaMask introduces “pooled staking” feature for Ethereum with aim of improving accessibility by enabling users to stake ETH without requiring 32 ETH.
- Along with keeping complete control over their ETH, users can now benefit from rewards and help strengthen Ethereum’s security.
- Liquid staking tokens (LSTs) are a feature of rival Lido and Rocket Pool’s service; nevertheless, MetaMask’s service is not available in the UK or the US at first.
MetaMask reveals Pooled Staking
MetaMask, the leading Ethereum wallet, is set to launch a new “pooled staking” feature this week. This move aims to make Ethereum staking more accessible and cost-effective for users. Traditionally, staking on Ethereum requires a minimum of 32 ETH, which equates to approximately $112,000 at current market prices. This high entry barrier has limited participation to a small fraction of Ethereum holders. MetaMask’s pooled staking service will allow users to stake any amount of ETH, thereby democratizing access to staking rewards and contributing to the network’s security.
Matthieu Saint Olive, senior product manager at MetaMask developer Consensys, emphasized the benefits of this new feature:
“With Pooled Staking, 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.”
This service is currently available to a select group of users, with a broader rollout expected soon.
Competitive Environment
MetaMask’s entry into the staking market pits it against established players like Lido and Rocket Pool. These platforms offer “liquid staking tokens” (LSTs) that can be borrowed, loaned, or re-invested into decentralized finance (DeFi) protocols. Lido, for instance, allows users to stake ETH and receive Lido Staked Ethereum (stETH) tokens, which can be used in various DeFi applications while earning an annual percentage yield (APY) of around 3.8%.
However, MetaMask’s new staking feature does not include its own LST, which could be seen as a drawback compared to its competitors. Despite this, MetaMask’s integration with Consensys Staking, which manages over 33,000 Ethereum validators and more than 1 million ETH staked, provides a robust foundation for its staking service. The company boasts a 99.9% validator participation rate and zero slashed validators, underscoring the reliability of its staking infrastructure.
Regulatory Difficulties
The new staking feature will not be available in the U.S. or UK initially, reflecting the regulatory challenges in these regions. In the U.S., the Securities and Exchange Commission (SEC) has been stringent on staking services, as evidenced by the $30 million fine imposed on Kraken in 2023 for offering an unregistered staking service. Coinbase has also faced similar regulatory scrutiny, leading to the curtailment of its staking services.
In the UK, the regulatory landscape remains uncertain. Economic Secretary to the Treasury Bim Afolami has promised that staking and stablecoin rules would be clarified within six months. However, as of now, the rules are still pending. This regulatory ambiguity has led some members of the Ethereum community to view it as an opportunity to further decentralize the network. Currently, the U.S. accounts for 50% of all validator nodes on the Ethereum network, followed by Germany with 12%, South Korea with 6%, and the UK with 4%, according to Etherscan.
