You may have heard about Ethereum staking,
but, today, we're going to get down to the truth.
So if you've ever been interested in having a validator node
or making passive income with Ethereum,
you're definitely going to want to check out this video.
In fact, a lot of people are telling you
that all the validators are going to dump the price of Ethereum.
At the end of this video, I'm going to tell you why that's not true.
Let's get it!
Welcome to BitBoy Crypto!
My name is Ben.
Today, we are going to be taking a look at Ethereum staking.
So let's start with the fundamentals.
Ethereum is now PoS.
Now, that doesn't stand for point of sale or piece of stuff.
That stands for proof-of-stake.
This means it is a staking project now,
which also means you can earn more ETH by staking.
So let's talk about what staking is and what it does.
No, proof-of-stake is not your receipt from Ruth's Chris Steak House.
So the staking is done by two parties.
First, you have your validators.
These are people or a company running an ETH node
that has at least 32 ETH locked up on it.
And you also have to run the validator software.
You also have what are known as delegators.
So you have validators and delegators.
Now, these are people that own ETH,
they may not own 32 ETH,
but they still want to take advantage of the passive income rewards,
so they want to stake their Ethereum,
but they're not going to be running a node.
When a delegator joins a validator,
it's called a pool.
You may have heard the term staking pool before,
and this is where that comes from.
Now, staking is actually very simple.
And it can be done through an exchange.
But you do have to be careful.
Because when you stake with some place like Coinbase,
what you're doing is you're giving your crypto, your ETH, over to that company,
a third party,
which we saw with Celsius is not always the smartest thing to do,
and you could lose all your crypto.
So if you want to do this on an exchange,
I don't suggest putting your entire stack there.
Just a percentage and amount that if Coinbase went bankrupt,
we don't think it's going to happen,
but we also didn't think Celsius will go insolvent either,
just in case that happens,
you don't want to lose all your crypto.
And personally,
I can't ever advocate for people using third party exchanges to stake.
But also some people feel comfortable doing that.
So that's your right.
Now, Coinbase staking is very simple.
It's got an APY of 3.28%.
If you want to get higher rewards than that, you can check out Lido Finance.
It offers up to 5.2%.
But to make this happen, you've got to have Ethereum, right?
So the biggest exchange in the world,
well, that's Binance.
So if you want to sign up for an account with Binance,
then make sure to check out the link down below.
We got plenty of Ethereum, plenty of liquidity.
You can get it there.
And then once you own it, then you can decide what to do with it.
So the staking rewards come from several different Ethereum network mechanisms,
or blockchain operations.
You have consensus rewards and execution rewards.
We'll talk about the consensus rewards first.
You have a proposer.
This is where your validator proposes the next block to verify.
You have an attestor.
This is where your validator votes on different blockchain checkpoints.
Then you have the sync committee.
And, no, this is not your dad and his two friends
trying to unclog pipes in the kitchen.
This is where your validator signs the block header
and then holds it for full confirmation.
So then we have the execution rewards.
These are tips and priority fees.
These are given when people are trying to speed up their transactions.
Then you have the MEV.
This is the fee for the reorganization of a block.
Now, you might remember there was an MEV scandal.
This is where miners were front running the blocks.
It's a long story.
It did have some negative coverage around it.
But that's what MEV is.
Now, when it comes to the yield for these Ethereum nodes,
well, how much you get,
that varies on your network activity with your node.
ETH PoS has now brought on more deflationary pressure onto staking.
So you may look at a chain like Solana and say,
"Well, the yields are much higher on average than that of Ethereum."
But are they really?
Yes, technically, Solana has a higher yield.
However, due to PoS now,
Solana has a much higher inflation rate.
So even though you're actually making more money with the yield,
you're actually losing money over the long term
because the inflation is much higher.
We all know what inflation is doing to our economy.
It does the same thing in blockchain.
Now, staking on-chain with a validator node,
basically not staking through an exchange,
well, this is a great way for you to make passive income during a bear market.
Now, in the beginning of the video, I said,
there are a lot of people out there that are telling you
that what we're going to see is
when the Ethereum lockup is over with the validator nodes,
which I believe is the first six months,
we're going to get this massive dumping of Ethereum.
Well, guys, I just don't think that that's true.
When people locked up their ETH in these validator nodes
going back as far as 2020,
people knew that, most likely, we would see a rise and a drop in price
as we do every four years.
So to think that the moment that these validator nodes
can pull all their Ethereum off and sell them
when, within one year's time,
it's very likely the Ethereum price is heading back to an all-time high,
well, that just doesn't make a lot of sense.
These validator nodes, they don't cost a lot of money to run
outside of the ETH that you have locked up on it.
Compare that to something like Bitcoin mining,
where there is mining and energy costs.
That's why the supply shock of the halving forces these miners to sell off equipment
and to sell off Bitcoin at massive rates.
They have to do it to stay profitable.
Validator nodes are not like this.
So while a lot of people are telling you it's going to tank the market,
I just don't see that happening.
I hope you guys enjoyed this video.
That's all I got.
Be blessed.
BitBoy out.