MetaMask enables pooled staking for Ethereum holders

Crypto wallet firm MetaMask rolled out its staking service, allowing users to pool their funds and stake their assets in enterprise-grade validators operated by blockchain software company Consensys. 

With the service, MetaMask wallet users can stake their Ether (ETH) without the need to meet Ethereum’s hefty minimum requirement of 32 ETH, which is worth about $112,000 at the time of writing.

Using MetaMask’s staking pool, users can provide less than the required ETH and still be eligible for the staking rewards for securing the network.

What is ETH staking?

Since Ethereum upgraded to a proof-of-stake (PoS) consensus mechanism, it has also moved from a mining model to a staking model. This means the network needs validators to process transactions, store data and add blocks to the Beacon Chain.

Essentially, validators keep the network secure and decentralized. Consensys senior product manager Matthieu Saint Olive believes that MetaMask’s pooled staking service contributes to the decentralization and security of Ethereum. Saint Olive told Cointelegraph: 

“Having more users staking and more ETH staked is beneficial for Ethereum security […] Also, the underlying validator infrastructure is distributed across multiple cloud providers, multiple regions across the globe, multiple consensus clients and multiple execution clients.”

Validators are awarded interest on their staked coins for their active participation in Ethereum. However, the staked ETH can also be lost if a validator fails to do its job or engages in collusion, a situation commonly known as “slashing.” 

“If a validator is slashed, this would lead to users’ fund loss, which is the main risk around staking,” Saint Olive explained. However, the Consensys executive claimed that since 2020, their validators have gone smoothly “without any slashing incidents.”

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99% of ETH holders do not have 32 ETH

While the benefits of staking could be massive, not everyone can meet the minimum requirement of 32 ETH. 

As ETH’s price surged to over $3,000, the requirements to become a validator became costly. At the moment, Ether hovers around the $3,500 mark. This means that to participate in Ethereum staking, one needs about $112,000.

However, not everyone can afford to participate. Citing blockchain data, the MetaMask team highlighted that “99% of ETH holders have less than 32 ETH.”

Furthermore, the wallet service provider noted that 74% of ETH is currently not staked, and much of the staked ETH is concentrated in a few larger pools.

Because of these, the wallet provider’s new service aims to bridge the gap for users with assets below the minimum requirement. Users with less than 32 ETH can participate in network staking through Consensys validators.

In addition, their assets can be “unstaked at any time,” depending on the validators’ exit queue protocols.

In a previous Cointelegraph interview, Consensys CEO and Ethereum co-founder Joseph Lubin compared the new service to liquid staking and said that it may be more convenient.

“You can kind of flip a switch and you are able to, in a pretty liquid way, allocate small amounts or large amounts of Ether and pull them back really quickly,” Lubin said

Not available in the U.K. or U.S. yet

While the service seems convenient for ETH holders, it is not yet available for users in the United States and the United Kingdom. However, MetaMask highlighted that it is working to make the service available in these jurisdictions soon.

Saint Olive said that the regulatory landscape in the US is still “experiencing meaningful evolution” in its Ethereum staking policy. According to the executive, they are expecting to roll out the product to the US as soon as the policy progress crystalizes. 

Similarly, the executive highlighted that regulators expect to release additional regulatory guidance in the United Kingdom. Saint Olive told Cointelegraph that they expect the UK to “modernize the current regime and provide greater clarity to the staking market.”

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