Non-custodial service provider Metamask has introduced a very interesting feature within its wallet called “Validator Staking” aimed at users of the Ethereum blockchain.
This is a service that allows you to stake ether directly on the Portfolio section of Metamask, running your own validator node that will be managed directly by Consensys.
This mechanism eliminates the need for pooling or complex hardware and minimizes the chances of encountering slashing of your Ethereum node.
Metamask’s Validator Staking could also solve the problem of centralization of LSD providers like Lido, which currently controls over a third of all ETH locked on the Beacon chain.
Let’s see all the details below.
The Metamask wallet makes Ethereum staking easier with the “Validator Staking” feature
The well-known non-custodial wallet Metamask presented yesterday to the public the “Validator Staking” feature which allows all Ethereum blockchain users to stake by running their own validator node on the network.
The node will be directly managed by Metamask’s parent company, Consensys, which eliminates the need for pooling or using complex hardware, but applies a 10% fee on the interest generated by staking.
Currently staking on Metamask has an APR of 4% and requires a minimum of 32 ETH to participate (or multiples).
The service could break down several entry barriers as few users are able to run their own validator node and often choose to use third-party services, centralizing the entire process towards a few players.
Staking on Metamask instead assumes that the end user always has control of the node, even if it is not managed directly.
The Metamask service against the risk of slashing
As explained in the introductory video, the service provided by the Metamask wallet helps mitigate the risk of slashing in case of internet interruptions, as Consensys is a reliable entity that has never received sanctions from the network despite managing ETH worth over 2 billion dollars through more than 33,000 validators.
Furthermore, Validator Staking also reduces the downtime of your node, maximizing the final yield.
All this could even solve the centralization issues of large liquid staking providers like Lido, which currently controls 32.2% of the Ethereum staking market with over 9.3 million ETH locked in it.
Several experts from the Ethereum community have indeed observed how Lido is acquiring an increasingly dominant role in this context, risking to monopolize the LSD sector.
Anyway, Lefteris Karapetsas, founder of the Rotkiapp cryptocurrency portfolio tracker, has noted that the returns offered by Metamask are not in line with those of Lido and other managers. These are his words in a post on X:
” It’s an interesting idea, but a 10% commission makes it a completely unattractive option for any user who cares to compare it with other options available on the market.”
A small step for Metamask, a big step for mass adoption
The service presented by the Metamask wallet, which allows Ethereum users to run their own validator node for staking in complete autonomy, opens the doors to an era of decentralization and operational simplicity.
This is a small step forward for Consensys, which can further strengthen its position in the cryptocurrency market, and at the same time a big step for the crypto community towards mainstream adoption of non-custodial practices non-custodial.
The fact that users can run a validator node without the need for special hardware and without certain skills speaks volumes about the potential offered by Validato Staking, which has all the cards on the table to scale the Ethereum staking market.
Obviously the yields are lower than those we can find on alternatives like Lido or official staking on the 2.0 platform, but they eliminate a series of risks and entry barriers that make the service very convenient for less experienced subjects in the web3 sector.
The vision of Metamask
Traditionally, many people rely on centralized services for staking, but this initiative allows users to maintain greater control over their funds.
Decentralization is one of the key principles of the Ethereum blockchain industry, and this move aligns with the goal of distributing decision-making power among users.
In order for the outside world to truly embrace the mainstream adoption of non-custodial crypto practices, it is necessary for these processes to be simple and intuitive for the end user.
Metamask has always been oriented towards this vision, and while seeking to offer solutions that put the user in a position to always be in possession of their assets, it aims for a constant simplification of its products.
The wallet supported by Consensys, until a few years ago, was solely a wallet for cryptocurrencies, but now it is increasingly taking the form of a unified hub where it is possible to store one’s assets, exchange them with other users, engage in trading, staking, and even convert one’s coins into fiat currency.
The work to be done to reach the general public is still long, but it is evident that Metamask is on the right track.
Source: https://en.cryptonomist.ch/2024/01/19/the-metamask-wallet-introduces-the-validator-staking-service-which-allows-ethereum-users-to-stake-ether-by-running-their-own-validator-directly-in-the-portfolio-section/