Staking platform reaches a turning point: Is decentralization the next step?

The Staking Platform is a gateway and channel for users to participate in digital asset staking. Since Ethereum upgraded from the PoW consensus mechanism to the PoS consensus mechanism, staking platforms have gained a wave of new attention and attracted a large number of new users’ participation.

In terms of the purpose of staking, currently common staking platforms can be divided into two types: one type helps users participate in liquidity staking of PoS mechanism blockchain networks, and the other type provides conventional digital asset staking services of DeFi protocol project platforms. While the two types of platforms may be very similar in service mode and usage, both can help users enhance asset liquidity, but they differ in protocol architecture design and the ultimate purpose of staking services.

For the former mentioned “staking,” it is a mechanism to maintain network security on PoS mechanism blockchain networks—users can earn asset rewards by participating in staking on PoS mechanism blockchain networks, and these rewards are intended to encourage users to maintain the integrity and security of the blockchain network by participating in staking.

For the latter mentioned “staking,” it is an asset service provided by DeFi protocol project platforms—users lock their held digital assets in the smart contracts of DeFi projects to further earn income on the held digital assets, namely earning interest.

It is worth noting that conventional digital asset staking services, different DeFi protocol projects may support different types of assets for staking, and they may even support staking NFTs. However, staking platforms aimed at helping users participate in PoS mechanism blockchain network validation usually accept established, single asset type participation in staking.

Recently, many information platforms have selected the anticipated staking platform list for 2024 based on criteria such as trading functionality, user engagement, asset accumulation, platform availability, security, and reward situation. Some of the staking platforms that frequently appear on different lists include:

Lido

Lido is currently the largest liquidity staking platform in terms of asset size, with a Total Value Locked (TVL) exceeding $14 billion. It supports staking on PoS consensus mechanism blockchain networks such as Ethereum, Polygon, and Solana.

Rocket Pool

Rocket Pool is a decentralized liquidity staking platform that focuses on and supports Ethereum staking. It has developed intelligent node software, providing a permissionless protocol that allows users to freely choose to become node operators (validators).

Coinbase Prime

Coinbase Prime’s Total Value Locked (TVL) has now exceeded $2 billion, supporting participation in Ethereum staking.

EigenLayer

EigenLayer is a well-known re-staking platform that focuses on and supports Ethereum staking. From the perspective of staking purposes, it also belongs to liquidity staking. Currently, there are over 600,000 ETH staked on EigenLayer.

Stader

Stader is a comprehensive staking platform that supports multiple blockchains. It enables participation in staking activities on PoS consensus mechanism blockchain networks such as Ethereum and Polygon. Additionally, it is linked to over 40 conventional digital asset staking services provided by DeFi projects. Currently, the Total Value Locked (TVL) on Stader exceeds $124 million.

Tenderize

Tenderize is a DeFi protocol project platform that provides conventional digital asset staking services. It supports various digital assets for staking, allowing users to earn interest. Users can also utilize the alternative assets obtained through staking to participate in other free transactions.

The listed staking platforms cover various staking service models, including liquidity staking (including re-staking), centralized exchange staking, and staking pools in DeFi protocol projects. However, liquidity staking still dominates in terms of the locked asset size. Since Ethereum completed the merge and changed its consensus mechanism on September 15, 2022, most of the staking of the digital asset ETH has been done through third-party liquidity staking platforms.

Next thoughts on the staking platform

Ethereum staking is facing a serious centralization problem, with leading platforms like Lido and Coinbase holding almost half of the Ethereum staking assets.

On March 21, 2024, Ethereum founder Vitalik Buterin reiterated the centralization risks of Ethereum staking at the ETHTaipei event. During his speech, he elaborated on a new concept proposed by Barnabe Monneau of the Ethereum Foundation in February 2024: Rainbow Staking, aimed at addressing the growing centralization issue in Ethereum staking.

The core idea of the Rainbow Staking framework is: to allow various protocol service providers to participate as much as possible in differentiated protocol services, thereby increasing the number of independent validators participating in staking.

By integrating various protocols, Rainbow Staking hopes to address two major challenges faced by users who want to participate in staking: the asset threshold requiring 32 ETH for staking and the technical challenge of operating independent nodes. This may also imply that the goal of the new technical framework is to reduce the economic value of existing liquidity staking assets (such as LSD assets) and return Ethereum staking to its original purpose.

Participate in staking using digital asset management tools

Currently, to participate more conveniently in Ethereum staking or DeFi projects, users can also directly engage through digital asset management tools, such as blockchain wallets. As one of the earliest Ethereum wallets developed and launched, imToken has always been actively involved in the Ethereum ecosystem. Users can participate in Ethereum staking through imToken using two staking options: custodial staking and non-custodial staking. Additionally, imToken supports users in viewing staking details at any time and allows them to withdraw their staked assets according to their preferences and needs.

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Learn more

imToken supports Ethereum staking

Managed pledge, you can copy the link below to your browser to learn more:https://support.token.im/hc/zh-cn/articles/900004631346

For non-custodial staking, you can copy the link below to your browser to learn more:https://support.token.im/hc/zh-cn/articles/900007068843

More secure offline staking

With the help of blockchain wallets and similar digital asset management tools, users can achieve even stronger security for offline staking.

Offline staking, also known as “cold staking,” is a mechanism that allows users to participate in blockchain proof-of-stake mechanisms without being connected to the internet. In this mechanism, users can store the private keys of the assets they wish to stake in asset management tools or hardware blockchain wallets that do not require an internet connection, thus enhancing the security of their assets.

At the same time, users must set up a connected asset management tool to create a staking node and use this node to participate in offline staking. Typically, the creation of a staking node involves delegating to a third-party staking pool service. As a delegated party in the third-party staking pool, the node will participate in validating transactions.

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