MetaMask Introduces Staking Offer: Here’s What To Know
Validator Staking For Ether Users
Prominent crypto wallet provider MetaMask recently launched a cutting-edge staking service allowing Ethereum users to run their validator nodes. This novel validator staking option has been seamlessly integrated into the MetaMask portfolio.
MetaMask runs the validator node for consumers who deposit 32 Ether (ETH), equivalent to around $78,752 in fiat at the current Ethereum price. Despite the significant investment, MetaMask assured users there is no need for pooling.
Instead, the provider will ensure that the node runs securely to speed up the staking process while lowering the chances of operational downtime. Choosing to stake with MetaMask provides an alternative to the centralized concerns that come with major liquid staking providers like Lido.
MetaMask’s effort allows users to participate in staking without requiring significant technical skills or bulky hardware requirements. This provides a user-friendly and accessible path to validator node operation.
Eliminating Slashing And 10% Fee Concern
Furthermore, the approach eliminates the possibility of slashing occurrences due to internet failures. Consensys, the company in charge of this service, stated that it has never received any penalties in over two years despite managing over $2 billion in ETH among over 33,000 node validators.
Meanwhile, staking through MetaMask provides a 3.8% annual income. However, it is essential to note that the site does levy a 10% commission on this income. Lefteris Karapetsas, the inventor of Rotkiapp, a cryptocurrency portfolio tracker, opines that this new service is an “interesting idea.”
But he added that the 10% fee may be a deterrent for certain people. According to Karapetsas, the 10% commission makes the service unattractive to clients compared to the other options on the market.
MetaMask’s Yields Similarity With Lido
Meanwhile, MetaMasks staking yields (after factoring in its costs) are almost identical to Lido’s 3.4% returns. Lido Finance is the industry’s leading liquid staking platform, with 9.3 million ETH (equal to $22.9 billion) currently staked.
This accounts for around 40% of the total 28.8 million ETH staked on the network. Interestingly, over one-quarter of Ethereum’s total circulating supply is now in various staking arrangements.
In addition to decentralized staking providers like MetaMask and Lido, Coinbase also offers staking services. However, Coinbase’s 25% commission on staking earnings makes it a less appealing alternative for those seeking to maximize profits.
Spot Ethereum ETF Setback For Fidelity
Meanwhile, Fidelity Investment’s wait for a spot ETH ETF approval continues after the US Securities and Exchange Commission (SEC) announced a deferral of its decision. The SEC’s decision relates to a proposed rule change allowing Cboe BZX to list and trade shares of Fidelity’s upcoming fund.
Initially expected to decide by January 20, 2024, the regulator opted for a 45-day extension, establishing a new March 5, 2024 deadline.
Is A Spot ETH ETF Approval Likely In May?
According to Bloomberg ETF expert James Seyffart, the delay in Fidelity’s ETF decision was anticipated as the regulator is known for ruling on multiple proposals simultaneously. According to him, this new schedule is tied to the SEC’s decision to approve or reject VanEck’s Ethereum ETF application by May 23.
Despite varied deadlines for other applications, the SEC would likely rule on all outstanding Ethereum ETFs in late May. Recall that Fidelity and VanEck were among the eight asset managers that received clearance for spot Bitcoin ETFs last week. But that doesn’t guarantee a successful approval for their spot ETH ETF proposals.
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