Liquid & pooled staking

What are staking pools?

Staking pools are a collaborative approach to allow many people with smaller amounts of ETH to obtain the 32 ETH minimum required to activate a validator on Ethereum. Pooling functionality is not natively supported within the protocol, so solutions were built out separately to address the need for participating with smaller amounts.

Some staking pools operate using smart contracts, where funds are deposited to a contract that manages and tracks your stake, and issues you a receipt token (liquid staking token) that represents this value. Other pools may not involve smart contracts and are instead mediated offchain.

Pooled options differ enormously in how much you can verify about them. Transparent, protocol-governed pools are open-source smart contracts on Ethereum that hold deposits, publish their node operator sets, and issue a redeemable token; everything backing your position is visible onchain. Opaque pooled products, such as some centralized exchange yield programs, take your ETH into custody, and you cannot independently verify what is staked on your behalf, if anything. Most of this page covers the first kind; see opaque pooled products for how to tell the difference.

Every pooled option solves the real access problem of staking with less than 32 ETH, or without running hardware. But each also puts an intermediary between the staker and core Ethereum protocol. Only solo staking gives you a direct, unmediated relationship with Ethereum.

Why stake with a pool?

In addition to the benefits of participating in staking, staking with a pool comes with a number of unique benefits.

Comparison of staking options

Liquid staking tokens

Most transparent staking pools issue a liquid staking token (LST), an ERC-20 token that represents a claim on staked ETH and the rewards it earns. When you deposit ETH, the protocol stakes it with its node operators and mints a receipt token (LST) to your wallet. You can hold the token yourself or custody it with a third-party provider, and can transfer or sell the token at any time. The underlying ETH stays staked on the consensus layer. Liquid staking protocols account for around a third of all staked ETH, making LSTs one of the most common ways to stake today.

How rewards show up in the token

LSTs reflect staking rewards in one of two ways:

• Rebasing tokens (such as Lido's stETH): your token balance increases as rewards accrue, so one token stays roughly equal in value to one ETH.
• Exchange-rate tokens (such as Rocket Pool's rETH): your token balance stays the same, but each token becomes redeemable for a growing amount of ETH over time.

Both designs deliver rewards net of the staking protocol's fee. Neither is inherently better, but they behave differently in wallets and DeFi applications, and are treated differently for tax purposes in some jurisdictions. Rebasing tokens often have "wrapped" non-rebasing versions for compatibility with applications.

Redeeming and trading

There are two ways to exit an LST position:

• Redeem through the protocol for the underlying ETH. Redemption depends on the protocol having liquidity available, either a buffer of unstaked ETH or validators exiting through the consensus layer exit queue, which can take time.
• Sell on secondary markets at any time. Because the token trades freely, its market price can deviate from the value of the ETH backing it, particularly during periods of market stress.

Since the Pectra upgrade, execution layer triggered withdrawals (EIP-7002) (opens in a new tab) allow validator exits to be triggered directly from the execution layer by the withdrawal address holder. Staking protocols can use this feature to ensure their validators can be exited without relying on node operators to cooperate, so redemptions rely less on trusting node operators than they used to.

Holding an LST is not the same as staking

The Ethereum protocol pays rewards to validators; it doesn't know your token exists. When you hold an LST, you are not a staker from the protocol's point of view. Instead, you hold a claim on a service or smart contract that stakes on your behalf. This works well in normal conditions, but it comes with additional trust dependencies. Your staked ETH depends on the pool's contracts, governance, and operators working correctly, not just on Ethereum itself.

Risks of liquid staking tokens

LSTs inherit the underlying risks of staking (such as slashing and downtime penalties on the pool's validators) and add layers of their own:

• Smart contract risk - your ETH is held by contracts that could contain bugs or be exploited. Favor protocols with open-source, audited, battle-tested code.
• Market and liquidity risk - the token's secondary-market price can fall below the value of the ETH backing it ("depegging"). If protocol redemptions are slow or congested when you want out, selling at a discount may be your only fast exit.
• Governance and upgrade risk - fees, node operator sets, and even how the token works can be changed through the protocol's governance and contract upgrades. As a token holder you typically have no vote in that governance.
• Operator-set centralization - some pools concentrate stake with their chosen node operators. Large amounts of staked ETH under the control of a few organizations create conditions for censorship, value extraction, and single points of failure. Prefer pools with permissionless, distributed operator sets.
• Slashing pass-through - if the pool's validators are slashed or penalized, the loss is typically socialized across all token holders according to the protocol's rules.

Opaque pooled products

Not everything marketed as "staking" is protocol staking. Centralized exchange "earn" or "rewards" programs, and some yield products built on top of staking tokens, pool customer ETH in ways you cannot inspect:

• Custodial - the provider holds the withdrawal keys and the ETH.
• Terms can change - rates, lockups, and eligibility are set by company policy and can be revised at any time, unlike rules enforced by onchain contracts.
• May not be staking at all - under the hood, the yield may come from lending, trading, or other activities rather than validators. You usually have no way to verify.
• Counterparty risk - if the provider becomes insolvent or freezes withdrawals, there is nothing onchain for you to redeem.

To tell a transparent pool from an opaque product, ask:

1. Can you verify onchain where your ETH goes, in open-source, audited contracts?
2. Is the node operator set published?
3. Do you receive a token held in your own wallet that is redeemable for the underlying ETH?
4. Are the rules enforced by smart contracts and public governance, or by a company's terms of service?

The more of these questions a provider can only answer with "trust us," the more opaque the product.

Run a node for a pool

Becoming a bonded node operator for a staking pool is a middle path between holding a token and solo staking. Some staking protocols let individuals run validators using pooled ETH from other users. You post a bond of your own ETH as collateral, run the hardware and keys, and earn a commission on the stake matched to you.

For example, Rocket Pool megapool validators require a 4 ETH bond per validator, and Lido's Community Staking Module requires around 2.4 ETH for a first validator key (1.5 ETH for Identified Community Stakers). This offers people with less than 32 ETH a way to run their own hardware and strengthen the network's operator set, while accepting the pool's rules, performance requirements, and penalty conditions.

What to consider

Each pool and the tools or smart contracts they use have been built out by different teams, and each comes with benefits and risks. Pooled or delegated staking is not natively supported by the Ethereum protocol, and the gold standard for staking should always be individuals running validators on their own hardware whenever possible.

Attribute indicators are used below to signal notable strengths or weaknesses a listed staking pool may have. Use this section as a reference for how we define these attributes while you're choosing a pool to join.

Explore staking pools

There are a variety of options available to help you with your setup. Use the above indicators to help guide you through the tools below.

Please note the importance of choosing a service that takes client diversity seriously, as it improves the security of the network, and limits your risk. Services that have evidence of limiting majority client use are indicated with "execution client diversity" and "consensus client diversity."

Have a suggestion for a staking tool we missed? Check out our product listing policy to see if it would be a good fit, and to submit it for review.

Frequently asked questions

Further reading

• The Ethereum Staking Directory (opens in a new tab) - Eridian and Spacesider
• The risks of liquid staking derivatives (opens in a new tab) - Danny Ryan
• What Is Liquid Staking? (opens in a new tab) - Chainlink
• EIP-7002: Execution layer triggerable withdrawals (opens in a new tab) - Ethereum Improvement Proposals
• Ethereum Staking Pool Ratings (opens in a new tab) - Rated Network Explorer
• What's the difference between a liquid restaking token (LRT) and a liquid staking token (LST)? (opens in a new tab) - Liquid Collective