Burning part of a validator’s deposit for cheating. Slashing punishes dishonest work, such as signing two different blocks. Simply going offline costs far less.

You staked 1 ETH at 2.5%, and ETH fell 30% in a year. In dollars?

A loss: the yield does not cover the price drop. 1.025 ETH at a 30% lower price is about 72% of the starting dollar amount.

How much ETH do you need to run your own validator?

32 ETH. The minimum is 32 ETH. 2,048 is the maximum per validator after Pectra, and smaller amounts go through liquid staking.

ETH staking: earning by securing the network

Lesson 28 of 58 in the course “Crypto”. Free, with animations and a quiz.

A deposit instead of mining

In Ethereum, blocks are checked by validators, not miners. Each one locks ETH as a deposit and earns rewards for honest work: new coins and part of the fees. If a validator cheats, for example by signing two different blocks at once, part of the deposit is burned. That is called slashing. If it simply goes offline, the penalty is small. So the network is protected by participants’ own money instead of electricity.

Three routes: solo, pool or exchange

Your own validator needs 32 ETH and a computer that runs around the clock. Since the Pectra upgrade in May 2025, one validator can hold up to 2,048 ETH, but the minimum is still 32. For most people liquid staking is easier: you put any amount into a protocol like Lido or Rocket Pool and get a token that grows in value and works in DeFi. The third route is the “staking” button on an exchange. It is the simplest, but the coins and keys stay with the exchange.

What it means in money

Right now ETH staking pays about 2.5% a year, in ETH. About 44M ETH is staked, roughly 35% of all coins. The more people stake, the lower the rate for each of them. Example: 1 ETH becomes about 1.025 ETH after a year. If ETH drops 30% over that time, you are still down in dollars. Staking grows the number of coins, but it does not protect you from their price falling.

The catches

First: interest in ETH does not save you when ETH falls. Second: getting out is not instant. Validators wait in an exit queue, and in autumn 2025 it stretched to several weeks. Third: you trust a protocol or an operator, and they can have bugs. The rule is simple: only stake ETH you were going to hold for years anyway, and pick large protocols with a long track record. Next, we look at the biggest ones.

Check yourself

What is slashing?
Correct answer: Burning part of a validator’s deposit for cheating. Slashing punishes dishonest work, such as signing two different blocks. Simply going offline costs far less.
You staked 1 ETH at 2.5%, and ETH fell 30% in a year. In dollars?
Correct answer: A loss: the yield does not cover the price drop. 1.025 ETH at a 30% lower price is about 72% of the starting dollar amount.
How much ETH do you need to run your own validator?
Correct answer: 32 ETH. The minimum is 32 ETH. 2,048 is the maximum per validator after Pectra, and smaller amounts go through liquid staking.

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