The world’s largest Ethereum mining pool Ethermine, has released a new staking pool product for users (unless they reside in the US).
The new staking service allows members to collectively stake Ethereum’s native token Ether (ETH), with deposit amounts starting as low as 0.1 ETH.
The release comes as the broader cryptocurrency industry prepares for the Ethereum network’s upcoming Merge upgrade, scheduled for September 15.
The rise of staking and its benefits
The world’s largest Ethereum mining pool choosing to release an ETH staking product is a significant step in a new direction, as Ethermine was formerly more focused on cryptocurrencies with a Proof-of-Work (PoW) consensus mechanism.
Following the Merge, ETH mining will be eliminated as the blockchain moves to a faster, more efficient consensus mechanism called Proof-of-Stake (PoS).
The benefit to getting more users involved in staking on the Ethereum network is three-fold.
Firstly, larger volumes of ETH being staked on the network increase the security of the entire Ethereum ecosystem, especially as it heads. Secondly, the more users that switch from traditional PoW mining activities to invest in PoS blockchains actively decreases the number of electricity-guzzling mining rigs used in mining.
Third, these sorts of services democratise the staking process by making it more accessible for individual people to contribute ETH to the network. Otherwise, any one person looking to earn the rewards that come with being a validator on the Ethereum network would need to deposit 32 ETH upfront, which at the time of writing commands a substantial $51,000 price tag. It goes without saying that not everyone has this sort of capital ready to drop on staking.
An important caveat to note here is that users who do decide to stake their ETH ahead of the Merge upgrade will not be able to unstake their digital assets until the successful implementation of another network revamp, known as the Shanghai upgrade.
Speaking to The Chainsaw, Ethereum developer Marius van der Wijden said that while he was unable to provide a specific date for the Shanghai upgrade, he confirmed that it would provide users the ability to unstake their ETH.
“The only thing I can say is almost certain is that Shanghai will enable withdrawals.”
The loosely held consensus among the Ethereum community is that it will be implemented sometime over the next nine months.
The end of mining
Despite the significant benefits the Merge brings to the Ethereum network, not everyone is excited about the transition.
In an exclusive interview with The Chainsaw, prominent Ethereum miner Chandler Guo explained that he thinks the Merge will negatively impact the Ethereum ecosystem beyond the loss of income for miners like himself.