Ethereum 2.0 Staking: Passive income with risks

Ethereum 2.0 Staking: Passive income with risks

Ethereum 2.0 Staking is live and already tens of thousands are making daily returns with Ether. But staking also carries risks. Staked, one of the world’s best-known staking providers, has recently been penalised for breaching security standards on the ETH 2.0 network in the pursuit of even more profit. What went wrong?

Since 1 December 2020, it has been possible to earn passive income with Ethereum 2.0 Staking. BTC-ECHO has already reported on how to make Bitcoin Billionaire profits with ETH Staking in the past. Staking with Ethereum is still very new, but there are already a large number of providers. Customers can easily become Ethereum 2.0 validators with them via so-called staking pools. With the help of staking pools, it is possible for anyone to become a staker via a third-party provider such as Coinbase, Binance, Allnodes or Kraken.

The advantage here is that, on the one hand, you don’t have to install the hardware yourself that you need as an ETH validator. On the other hand, you can already participate in staking with significantly less than 32 Ethereum. The big disadvantage is that you have to trust the various staking providers for a long time. Therefore, complications arise time and again.

Staking company Staked has to pay 18 ETH fine

Only recently, the staking provider Staked had to learn an expensive lesson. On 4 February, an error caused 75 ETH 2.0 validators to pay an 18 Ether fine. This currently corresponds to just under 30,000 US dollars.

The problem: An unforeseen reaction to configuration changes led to several ETH 2.0 validator nodes managed by Staked having to be restarted. This in turn resulted in them mistakenly re-signing a second version of an already validated block. This briefly created the potential for a split in the Ethereum blockchain.