How to Stake ETH on Starknet and Earn High Yield?
Staking ETH on Starknet is now possible thanks to Braavos Wallet’s new Stake+ Pooling protocol. This breakthrough solution combines Ethereum’s robust layer-1 staking capabilities with Starknet’s gas-efficient model. The result? Easy, inclusive access to high-yield ETH staking, even for small-scale investors.
But how does it work? What’s the potential return? And what should you know before you get started?
This guide provides the answers.
How Do I Stake My Starknet ETH?
You ask, is it complicated? The answer is: not at all!
Here’s your simple, five-step guide to staking your ETH with Braavos Wallet.
- Deposit ETH into your Braavos Wallet.
- Click on the ‘Stake+’ button in the wallet’s interface.
- Choose your staking option: Lido or Staking Boost (more on this below).
- Decide the amount you wish to stake.
- Confirm your transaction.
Wait a while, and voilà! Your wstETH tokens or LP tokens, representing your position, will show up in your wallet.
What is Staking Boost?
Great question! Staking Boost is a unique feature within the Braavos Wallet that could supercharge your staking yields. With Boost, your investment is divided in two compounding steps, allowing you to maximize the yield-earning process, potentially driving double-digit returns, both by earning staking rewards and by earning fees as a liquidity provider. Remember, higher returns come with some additional risk – make sure you’re comfortable with that before opting for Staking Boost.
How Does the Process Work?
With Braavos Wallet, staking your ETH is made simple and efficient. When you initiate a stake, your ETH is gathered with others’ in a Pooling smart contract on Starknet. Once the pool reaches a critical mass, the funds are seamlessly bridged to Ethereum layer-1. From there, they are staked via the reputable service, Lido. Subsequently, the Lido staking token (wstETH) is bridged back to Starknet’s layer-2. This unique process shares the otherwise high gas cost associated with Ethereum layer-1 transactions among multiple users, significantly cutting individual expenses.
If you opt for the Staking Boost feature, an even more sophisticated strategy is applied. Half of your ETH is staked via Lido, while the other half is reserved to receive the returning wstETH tokens. Upon their arrival, these tokens are promptly deposited into the mySwap ETH-wstETH liquidity pool. This single transaction allows you to earn swap fees on top of staking rewards, thereby enhancing your yield.
Furthermore, it is worth noting that with the prices of ETH and wstETH relatively pegged, this strategy minimizes the risk of impermanent loss while enabling you to earn from the pool’s fee.
How Long Does It All Take?
We know your time is precious, and you asked if this process is time-consuming. The answer is that it won’t take more than a few seconds to perform the investment transaction, however, its completion will take a few hours, mainly depends on two main factors:
- User Pooling Duration: This varies based on demand but could take from a few minutes to several hours.
- Bridging Duration: This process, involving bridging the pooled funds to Ethereum L1, staking them with Lido and bridging them back to Starknet, takes about 8 hours.
So, in total, you’re looking at somewhere between 8 to 16 hours. We believe it’s worth the wait, considering the potential for high yield and low gas fees that Braavos’ ETH staking protocol offers.
How Much Should I Invest?
Investing is a personal decision and depends on many factors, including your financial situation and risk tolerance. But one of the beauties of Braavos Wallet pooling mechanism is that it enables you to stake smaller amounts. Yes, even a modest $100 investment can yield positive results when you don’t have to incur the high Ethereum gas fees! If you want to get a taste of the feature before going all in, it is worth noting that the minimum amount to invest is 0.01 ETH.
What Are the Risks?
You’re right to ask about the risks – every investment comes with its own set. These can include market volatility, smart contract bugs, and potential changes in staking rewards.
This feature along with the Braavos wallet and the Starknet network itself, are all still in their alpha development stage where the code has not yet been audited. It’s vital to fully understand these risks and consider them in the context of your risk tolerance.
Is Double-Digit Yield a Sure Thing?
We wish we could guarantee that, but the truth is, we can’t. Many factors can influence your actual yield, such as market conditions and the performance of the mySwap ETH-wstETH staking pool. However, our ‘Stake+’ section in the wallet does provide a seven-day moving average APR for the Staking Boost feature, which can give you a ballpark figure.
Can I Withdraw My Staked ETH?
Absolutely, you can withdraw at any time. The process is similar to the deposit flow and takes about 8 to 16 hours under normal network conditions. The high gas fees of Ethereum layer-1 are split among all users during withdrawal, so you don’t have to worry about it eating into your yield.
There you have it
We hope this article answers your questions about boosting and staking ETH on Starknet with Braavos Wallet. As always, we’re here to help you navigate the crypto landscape and make informed decisions. Your trust is important to us, and we’re committed to helping you understand every step of your crypto journey.
Let us know if you have any other questions!