Main navigation

Ethereum Staking Contract Faces Inflow Spike as Coin's Price Drops by 30%

Mon, 01/17/2022 - 09:11
article image
Arman Shirinyan
Ethereum staking contract receives additional attention as simple "buy and hold" strategy becomes less efficient
Ethereum Staking Contract Faces Inflow Spike as Coin's Price Drops by 30%
Cover image via

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Read U.TODAY on
Google News

With a 30% market drop, Ethereum and other altcoins bring significant losses to their holders; that is why some traders choose safer and optimal options to invest in assets. Ethereum's staking contract allows holding Ethereum and receiving even more coins.

Why do investors choose to stake?

With the aggravation of consolidation on the crypto market, long-term traders and investors who are willing to buy significant amounts of coins might switch the direction of their investment and store money in a more convenient way.

The staking contract allows investors to receive a "passive income" with the help of their collateral. But Ethereum staking is not something available to investors who are willing to increase their portfolio without spending any time on trading.

In order to become eligible for a reward, users need to become validators. By sending 32 ETH to their wallets, individuals can activate the validator software. As validators, clients become responsible for storing data, processing transactions and moving blocks through the network. The process of validation is something similar to mining.

How much Ethereum stakers make

According to the official staking launchpad page, Ethereum miners are currently able to receive up to a 5.2% annual rate for staking their funds. With the standard collateral of 32 ETH, investors receive 1.6 ETH annually.

Australia's Financial Watchdog Warns Against Investing Retirement Savings into Crypto

The drawback of such an investment is the inability to withdraw funds from the contract immediately. This requirement pushes away some active traders and investors who usually act immediately on rapidly changing market conditions.

article image
About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.