How to earn more yield on Ethereum staked tokens – POS?

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How to earn more yield on Ethereum staked tokens – POS?

Want to contribute to the decentralization of Ethereum and want to maximize your interest in doing so? We’ll take a look at what is possible for yield maximizers just like you.

Staking Ethereum

The best way to stake your ETH is running your own Ethereum validator node. But this can not be done by everyone. In order to run your own Ethereum node and to contribute to decentralization, you have to stake an amount of 32 ETH.

For users who can only stake smaller amounts than 32 ETH, there is a solution. That’s why users can now stake within certain protocols. Whereby protocols take custody of deposited ETH and operate validator nodes on behalf of the depositors and earn a percentage of the generated yield.

On the other hand those staked ETH get represented by staking tokens stETH, cbETH, and so on. These yield bearing tokens can be used in other DeFi applications (as collateral or trading pairs). By using these tokens, users can get out by selling these on secondary markets.

All of these "staking derivatives" earn staking rewards, with a percentage of this yield allocated to the staking provider

How to earn more yield on Ethereum staking? 

By purchasing staking derivatives or Ethereum staked tokens, such as stETH and others at market discounts, you can boost yield on your staking rewards. By doing so, you pay less for the same yield bearing token, thereby increasing your yield.

To know how to buy them, visit the staking protocols where you want to buy them. You will probably need some ETH to convert into your favorite yield bearing staked ETH asset. 

DYOR

Note that there are a number of differences between staking providers, which are arguably more suitable for you as an ETH staker. Be sure you research more before selecting on random staking provider of staked asset token. 

For an overview and more research on each staking protocol and its place on the centalisation spectrum, marceaueth made a very nice spreadsheet, sharing his findings with the cryptocurrency world.

Spreadsheet of @marceaueth
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