We often say that it's still very early in crypto. Like the internet in the early 1990s, the crypto space is young, the onboarding is difficult, the market is volatile, and regulations are unclear.
While all this is true, it's also true that up to 20% of Americans, and over 400 million people globally, own crypto. What do they do with it? Sadly, not a lot.
For most, crypto turns into just another form of investment, like stocks or real estate, to sell when the price goes up. Many crypto owners hold their assets on traditional financial platforms like PayPal or centralized exchanges like Robinhood or Coinbase.
Fewer do the research and commit to decentralization and self-custody via wallets like MEW. With a non-custodial wallet, it's easier to discover more DeFi platforms, but they can be confusing and intimidating.
Either way, crypto ends up being a 'pet rock' to most newbies. They don't really know what it's good for and what they can do with it.
Does that sound familiar? Are you hesitant to try anything with your crypto besides leaving it sitting in the wallet until it's time to cash out? Can't really blame you. There are multiple challenges that prevent newbies from engaging with crypto, but there is also a solution – and it's staking.
The problem with crypto
Although every company in crypto claims to focus on improving user onboarding and building friendly interfaces, there is still a lack of good UX and educational material that would clearly explain earning opportunities.
The crypto community on forums leans toward experienced OG users or traders with a high risk tolerance, whose conversations can look like this even to people working in the space:
And with crypto's considerable image problem, it's not surprising no one really wants to try and figure it out! Mainstream media may get a lot wrong about crypto (especially the differences between centralized and decentralized solutions), but it's futile to deny that scams, rug-pulls, and exchange fiascos are a daily reality.
Why staking is the best entry point for newbies
First of all, what IS staking?
On proof-of-stake blockchains like Ethereum, users can 'stake' their tokens (ETH, in Ethereum's case) to help run the blockchain and earn rewards in the process.
To 'stake' means to deposit ETH into a smart contract, where it will stay doing the good blockchain work, while the staker receives continuous rewards to their crypto wallet.
So, what are the best things about staking?
Simple: With a good interface, staking is simpler and more straightforward than any other reward-generating crypto activity. Essentially, all it involves is depositing crypto into a contract and providing an address for the rewards.
Familiar: Staking is similar to a familiar concept in traditional finance - the savings account. The big difference is that staking has higher returns than traditional banks, and stakers remain in control of their assets, free to unstake and withdraw at any time.
Lower risk: Compared to most DeFi operations, staking involves fewer smart contracts and parties, which means fewer vectors of exposure to risk. Since Ethereum's transition to proof-of-stake, the number of stakers has been growing consistently and staking providers are establishing strong reputations. Staking is becoming the 'blue chip' choice in crypto.
Flexible: Staked ETH used to be locked on Ethereum, but after the Shapella upgrade enabled withdrawals, users can stake and unstake at any time. This allows stakers to experiment with providers, find the best user experience with the best returns, and eventually explore more complex options (like operations with liquid staking derivative tokens).
Good for the community: Staking gives users a literal stake in the future of the blockchain they are supporting, and a place in the entire crypto community. Not all ways of earning crypto rewards contribute to a common good. Aping into meme coins and knowingly taking part in rug pulls, like some crypto users do, only exacerbates the crypto problems we discussed above. On the other hand, securing the network with a long-term staking investment is good both for the staker and for the ecosystem.
Ready to give ETH staking a try?
If you prefer a wallet on mobile, download the MEW wallet app and check out full validator staking via Staked.us, or liquid staking with Lido.
You could also connect your preferred browser, mobile, or hardware wallet to the MEW web dashboard to stake 32 ETH validators with Staked.us, or stake any amount via ETH Staking powered by Coinbase.
And our multichain Enkrypt browser wallet can take you anywhere you want to go, whether you are staking ETH or a new trending PoS token that's just getting started.
