What is staking?
- Proof of Stake: Staking is an essential feature of proof of stake (PoS) protocols. Large PoS protocols including Ethereum, Polygon, Solana, and Polkadot allow users to stake their native tokens and accrue rewards.
- Staking as an incentive for validators: Blockchain node operators must pledge their tokens, also known as staking, to a network in order to be selected as a block validator. As a reward for correctly adding valid blocks to the blockchain, node operators receive newly minted tokens as rewards, known as staking rewards.
- Slashing: Node operators who perform invalid functions (eg. adding a corrupted block to the blockchain) could lose a portion of their pledged tokens, a function known as slashing. Our staking validators are highly effective, and we guarantee to reimburse any losses (slashes) due to our validation process (but not for slashing that occurs for reasons outside our control). See the Gemini Staking agreement for more details.
What is the difference between Staking* and Staking Pro?
Staking Pro is a service designed for advanced customers who require more control over their staked assets and desire greater on-chain transparency.
This service is ideal for those who want to avoid sharing staking rewards and are willing to meet the network minimums. For Ethereum the minimum is 32 ETH. It's worth noting that customers need a significant amount of staked assets in Staking Pro to accrue high returns on Ethereum. This is because when a customer is using Staking Pro, they are running a personal validator to stake their ETH, rather than a pooled validator offered by Staking. Fewer validators means a lower chance of being selected to propose new blocks and earn execution and MEV rewards.
*Not available in the UK
Why are the staking rewards different for Staking and Staking Pro?
Staking Pro requires running a personal validator on the Ethereum network, which may result in lower staking yields compared to someone who operates a larger number of validators.
This discrepancy in staking rewards can be attributed to the way Ethereum's proof-of-stake (PoS) consensus mechanism functions. In Ethereum's PoS system, the total staking rewards are distributed among all active validators in proportion to their stake. However, there is a cap on the maximum number of validators that can be active at any given time.
With a limited number of active validators, running a personal validator means that your stake competes with a smaller pool of validators for a share of the rewards. In contrast, someone operating a considerably larger number of validators has a greater combined stake, increasing their chances of being selected to validate blocks and earn rewards.
Therefore, while running personal validators on Ethereum provides an opportunity to participate in staking and earn rewards, it is important to acknowledge that the potential returns may be lower compared to those who operate a larger number of validators. It is advisable to consider these factors and evaluate the trade-offs when deciding on the number of validators to run on the Ethereum network.
Why are staking rewards not fixed?
Staking rewards are a function of several supply and demand factors on the network, and the actual reward granted to staking participants is determined at the time rewards are granted. For example, because the number of newly minted tokens is usually a fixed amount in a specific timeframe, staking rewards are higher with fewer node operators and vice-versa. These rewards are distributed proportionately on each successful checkpoint submission to each delegator based on their stake relative to the overall staking pool of all validators and delegators.
How do I redeem my staked rewards / assets? When can I get my staked assets back?
The unbonding period on ETH is approximately 7 days.