It has been 9 months since the Ethereum 2.0 network consensus layer was launched. Since then, many services offer staking solutions to users. Ledger, the hardware wallet manufacturer, has just unveiled a partnership with one of these services.
Ledger and Lido: the unexpected duo finally here
As we have just seen, the Ethereum 2.0 network – at least, its consensus layer – was born on December 1, 2020 with the launch of the beacon chain.
Since that date, it is possible to participate in the consensus by becoming a validator of the network. As the network uses a proof of stake (PoS) mechanism, the future validators have to stake 32 ETH to participate in the validation of transactions.
Unfortunately, until now, Ledger hardware wallet holders were not able to use their ETH without having to move them out of the wallet and thus put them at risk. This situation has just changed, on August 13, as explained in a post on the official Ledger blog.
From this date, Ledger hardware wallet users will be able to take part in the Ethereum 2.0 PoS, via the service offered by Lido.
Staking on Ledger Live
Lido’s service is now available in the Ledger Live software, allowing the management of hardware wallets. To do this, you will have to go to the application, in the “discover” tab, and find the Lido application in the Ledger Live catalog.
Unlike operating a personal node, Lido does not require a minimum number of ETH deposited in the staking service. Therefore, staking is now open to everyone, even if you don’t have the theoretically required 32 ETH, which is almost $100,000 at the current price.
In practice, for every ETH deposited, Lido will award you the same amount of stETH, a representation of your deposit, which can be traded on many DEX.
“By staking ETH with Lido, you no longer need to own 32 ETH to become a network validator. Lido allows users to participate in the network with any amount of ETH, without the need to maintain a complex infrastructure while preserving the liquidity of your ETH. For every ether you stake through Lido, you will receive stETH in exchange.”Ledger announcement
Who says transaction validation says rewards. To date, Ethereum 2.0 has seen a maximum return of 18.1% annually, although it averages 6%. Lido, on the other hand, charges a 10% fee on rewards to ensure its service.
For its part, Ethereum 1.0, the current version of the network, has successfully deployed the London hard fork. This one introduces in particular the EIP 1559 which aims at changing the mechanism of fees and which integrates the destruction of ETH in each transaction… so much so that some blocks have even become deflationary.