Apart from buying and selling crypto, Huobi also supports staking ETH for Ethereum 2.0. Here's what you should know about it.
As the world's second-largest blockchain platform next to Bitcoin, Ethereum aims to add a new dimension to the crypto industry by enabling users to use smart contracts, run protocols, and build decentralized applications (dApps) on the network. However, Ethereum still has a number of notable challenges and limitations that need to be addressed, including the high energy consumption and the lack of scalability. In order to solve the issues, Ethereum has outlined a huge network upgrade called Ethereum 2.0.
Ethereum 2.0 or "Serenity" is designed to bring fresh updates to the previous system and make it better, but it'll take years to implement. In the meantime, there's an option to stake ETH for Ethereum 2.0 and earn considerable rewards once the two networks are merged.
Why Stake ETH for Ethereum 2.0
Ethereum 2.0 is an upgrade of the initial Ethereum network that has a number of changes, including the shift from the Proof-of-Work (PoW) consensus algorithm to Proof-of-Stake (PoS) that runs on the Beacon Chain. The new PoS consensus will use complex algorithms to pick a node responsible to validate a block of transaction, whereas the current system requires miners to compete with each other in order to validate transactions and earn rewards. The new system is expected to reduce the energy consumption of miners to process transactions by up to 99.95%.
While the grand upgrade is not here yet, you can already participate and contribute to the security and governance of the network by staking your ETH coins. This means you should lock up a number of ETH in a wallet until the period ends. The person who stakes their ETH is referred to as a "validator" or "Ethereum staker" and will be responsible for validating transactions and adding new blocks to the network. In return, they'll get staking rewards in the form of ETH; this can be a great alternative to earn passive income in crypto.
See Also: The Most Profitable Coins for Staking
That being said, the primary reason why staking Ethereum is a great idea is because the considerable reward from the Annual Percentage Rate (APR) can range from 5 to 6% depending on the exchange you use. The exact amount is based on the number of ETH2 locked in for staking. Other than that, another reason to stake is to aid the network. If you're interested in making improvements to the network and validating transactions, staking is certainly an easy and reasonable choice.
However, it's worth noting that staking ETH can take years to complete. Once you're committed to staking your coins for Ethereum 2.0, you won't be able to withdraw them until the upgrade is released, which could be months or even years away from now. Keep in mind that some exchanges might also have a minimum ETH requirement for staking. Therefore, ETH staking would be more suitable for those who actually own some extra coins to spare. If you don't have the required number of ETH to lock up for a while, you might want to reconsider your decision and perhaps spend your tokens on other crypto investments.
Nevertheless, you can stake your coins on various crypto exchanges, and one of the options that you can choose is Huobi.
How to Stake Ethereum 2.0 on Huobi
Established in 2013, Huobi Global or Huobi is a leading crypto exchange that allows worldwide investors to buy, trade, sell, store, borrow, swap, stake, and earn digital currencies. The company was originally founded in China, but now it has grown and built offices in several countries, including Hong Kong, South Korea, Japan, and the United States. Currently, the exchange has millions of clients from no less than 195 countries and processes billions of transactions on the platform every 24 hours.
Huobi supports over 400 cryptocurrencies, 57 fiat currencies, and a wide option of payment methods. On top of that, the exchange offers competitive trading fees and an easy-to-navigate mobile app. So, the advantages of Huobi are mostly about its wide ions of assets and advanced trading platform.
The exchange also allows its users to stake their coins in exchange for rewards. Staking is a way of earning interest simply by locking a certain amount of crypto tokens in a digital wallet to support blockchain network operations, such as validating transactions. Huobi recently introduced a new feature called Huobi Earn, which enables users to stake their coins rather easily in a Huobi wallet.
Huobi offers an ETH 2.0 staking service where you can simply lock some ETH to earn rewards. In order to stake ETH 2.0 on Huobi, you're going to need to deposit at least 0.1 ETH to the exchange. This amount is very low compared to the 32 ETH required to become a validator, so Huobi can be an excellent option for beginners and small investors.
To start staking, users will have to convert their ETH tokens into BETH which basically represents the staked ETH on a 1:1 ratio. BETH can also be traded on the exchange as BETH/USDT and BETH/ETH pairs. The staking rewards will be given in the form of BETH and HPT airdrop bonuses, while the estimated rate of return ranges from 4-20%. Those rewards will be given a day after the BETH holdings snapshot. Remember that after the ETH 2.0 pledge, the ETH coins will be converted into BETH and cannot be retrieved.
In addition, Huobi Wallet or HClaimer offers an interesting feature called One-Click function to make the process of collecting rewards easier. Initially, collecting staking rewards in Huobi is considered a long and complicated process for crypto investors who are staking across multiple protocols' staking pools at the same time. With this feature, users can gather rewards from various networks like ETH 2.0 with just a single click.
The following are the steps that you could follow to stake ETH 2.0 on Huobi:
1. Head over to Huobi's official website. Click "Finance" and then choose "ETH2.0" on the main page.
2. Click "One-click Exchange" and read the terms and conditions.
3. Choose the amount of ETH tokens that you want to stake (you'll see the corresponding amount of BETH as well). Confirm the request once you understand the risks and agreement.
4. Start staking by clicking "Submit". Keep in mind that you would need to have a Huobi user account beforehand to stake, so make sure to register yourself before staking.
The Benefits of Staking ETH on Huobi
There are several notable advantages that you can get from staking ETH on Huobi, namely:
- Staking on Huobi is very easy. There's no need to manage private keys, locate nodes, sign off on transactions, or perform other tasks in order to start staking. With just a few simple clicks, you can already stake your ETH tokens for Ethereum 2.0.
- Don't worry about losing your tokens because Huobi always monitors the users' token storage closely. Also, the exchange watches the process in real-time to ensure that every transaction goes smoothly.
- Significant rewards with no additional fees. Huobi shares the revenue from validator rewards, so you can get better passive returns at an extremely low cost. The minimum requirement for ETH staking is also very low compared to other crypto exchanges.
See Also: How to Mine Ethereum in 3 Different Ways
The Bottom Line
The Ethereum 2.0 upgrade is a necessary step to improve the service of the current Ethereum blockchain. The new mechanism will bring a lot of significant improvements such as higher energy efficiency, faster transaction processing time, better security against the 51% attack, and much higher scalability. However, Ethereum 2.0 is still not fully launched yet as there are still several phases to go in the roadmap. As for now, you can start staking your ETH tokens to earn rewards. The final phase is expected to happen in 2022, so staking your ETH tokens now might be a smart move!
Keep in mind that staking ETH for the upcoming Ethereum 2.0 can be a great alternative for passive income, but only if you own some extra ETH tokens to use. In order to stake in Huobi, you need to have at least 0.1 ETH in your deposit and pledge the tokens to the program. Your tokens will be locked and you will earn rewards by the end of the staking period.
Other than staking, the crypto industry has provided another means to earn passive income, which is holding a saving account. To learn what it is and where you can open it, visit How Do Bitcoin Savings Accounts Work?