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I have 32ETH, but only just.

I have about 25 ETH but if I sell my remaining BTC I could get to 32.
The reason I switched to ETH was for the environmental benefits of pos.
Since I’ve started looking in to staking now I’ve some questions:
Do you get your stake back after 2 years? An article I was reading said that but I thought it was only once they finished the transition to pos, if so; is that on schedule?
It seems a reasonable risk to switch from btc to eth since it since the value is more or less pegged, presumably because of arbitrage? But what happens if eth becomes the dominant crypto? Without halvings and deflationary mechanics wouldn’t that make the predictable profitability of btc via the s2f model evaporate?

If you only had 32ETH (worth of Bitcoin) – would you startup a validator?

I have other savings but losing that much would certainly hurt.

What do you think?

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14 Comments

  1. I’ve done just that, sold about 0.7 BTC to fund my shortfall on the 32 required for a validation node. Trick is to watch the ETH-BTC chart carefully for a dip that corresponds to ETH being low relative to BTC. I watched it for a couple of weeks and was lucky to swap at the recent low 0.055 about two weeks ago, basically earned myself a few more ETH compared to a couple of weeks before that when the rate was up around 0.07

  2. It all depends on your technical skill level and how long term commited you are. Running an ETH 2 validator cost about $100/month if you are using a cloud service. You need to have basic server administration skills. There is risk you make a mistake and get slashed, so you have to monitor closely. Your eth is locked until the merge, so you can’t rely on it like an emergency fund for 1-2 years. The staking APY of 7% is generally higher than what you can find by depositing into a Yearn vault (1-5%). DeFi APYs can change though if DeFi picks up, as we saw 10-25% APY for months last year.

    There are a lot of other good places to put your ETH to work that are more liquid.

    Yearn – 3-6% compounded & paid out in ETH

    Bancor – 4% with 100+ day deposit with IL insurance paid out in BNT

    Convex – 4-8% paid out in CRV & CVX rewards

    Thorchain – 20% paid out in RUNE with IL insurance after 100 days. Will go down as they open up more space.

    Lido – Staking service pays 5% and runs the validator for you.

    Alpha Finance – Pays 6% in pure ETH, but more risk as it’s used in their leveraged trading products.

    StakeDao – 9.85% in pure ETH from a Curve deposit auto compounding strategy.

    These are mostly the bluechip plays. There are plenty of more higher risk/reward plays like Ribbon finance.

    It’s possible to make more money by not being a validator, but you also have increased risk from smart contract bugs, exploits, rugpulls, etc … If you have the skills, running a validator is easier, as you don’t have to move money around so often chasing APYs or monitor daily for emergencies. You can setup alerts using https://beaconcha.in

  3. You don’t need to run your own validator and stake the entire 32 Eth, there are staking services which allow you to stake less. If you don’t like giving away your custody or promoting centralization, wait for rocketpool. The additional smart contract risk should be minimal with the amount of effort they’re putting into it.

  4. I would always want to hold onto a some amount of BTC. It might not have as much upside potential as ETH, but it’s arguably a safer asset. IMO ETH has a few more vulnerabilities than BTC. Less so than a year or two ago, but they are still there.
    E.g. transition to PoS could not go as planned, changes due to EIP 1559 may have some unintended consequences.

    Like someone else said, wait for Rocket pool, do partial staking and keep the sats.

    > But what happens if eth becomes the dominant crypto?

    If it does, you’ve got 25 eth in your pocket and laughing.

    But what happens if it doesn’t?
    There is no sign of bitcoin slowing down. It is only going to get stronger from here on in. No matter the narrative, BTC will continuing chugging along like the king Don it is. You should always want to hold at least some value in that network.

  5. Not a financial advisor, but the way I think about it is that the upside of both bitcoin and ethereum is far greater than staking rewards. I personally wouldn’t trade diversification for staking, especially when there are other ways to get interest if you really need the income.

  6. You will definitely get your stake back after the merge etc, but the risk is not being able to sell the ETH in the meantime.

    Which is why I am in pretty much the same position as you and a bit unsure about what to do.

    I feel it is probably too risky to stake unless you have at least the same amount “free” to use if you need the money.

  7. If you’re thinking of staking, I suggest looking into HEX. It is the most beautifully designed crypto for staking that I have found. Everything is transparent and the returns are far better than staking ETH. You get up to 40% APY and the HEX chart is the best performing asset ever. You can split up and ladder your stake lengths to suit your needs. The longer you stake the higher APY you’ll receive. DYOR on it and you’ll see.

  8. Pos is more environmentally friendly but magnitudes less secure. Bitcoin still only produces less than 0.1% of global C02 emissions so it’s cost well worth the security on chain.

  9. Depends how savvy you are, what are the chances of messing up the staking process and losing your entire stack (in addition to slashing).

    I suggest sending some of your eth (say a third) to binance and buying Beth. You will get daily staking rewards from holding Beth in your spot wallet and get a slightly better exchange rate as people swap back to eth at a small loss. I managed to swap a little a few weeks ago at 0.91 exchange (also some earlier at 0.94 exchange) for a small win, in addition to the daily staking.

    Edit: formatting

Trying to mine with 4 GPu’s on mortar max motherboard b450

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