FAQs
ETH & Stader FAQs
1. Why should I stake my ETH?
Staking ETH allows you to participate in network consensus (securing the network) and earn rewards in the form of new Ethereum tokens. It's a way to generate passive income with your current ETH holdings.
2. How does liquid staking offer advantages over simple staking?
Liquid staking, as opposed to simple staking, provides you with a representative token (like ETHx in case of Stader) that you can trade, sell, or use in DeFi protocols while still earning staking rewards. This significantly enhances the liquidity and usability of your staked assets.
3. What is Ethereum 2.0?
Ethereum 2.0, or ETH2, is an upgrade to the Ethereum blockchain. This upgrade aims to improve the speed, efficiency, and scalability of the Ethereum network. It includes the implementation of Proof of Stake (PoS) consensus mechanism and sharding to increase transaction speed.
4. Why should I stake with Stader?
Stader is an excellent choice for users interested in leveraging the opportunities of decentralized finance (DeFi) due to its unique features and proven reliability. Here's why you should consider Stader:
Expertise Across Multiple Chains: Stader has demonstrated proficiency in rolling out liquid staking solutions on a variety of blockchains, including both Ethereum Virtual Machine (EVM) and non-EVM chains. This wide-ranging expertise allows us to provide dependable and efficient services regardless of your chosen blockchain platform.
Prioritizing User Safety: At Stader, we put user safety at the forefront of our operations. To uphold this, we conduct comprehensive audits of our smart contracts to ensure their robustness and security against potential risks and vulnerabilities.
Access to the Best DeFi Opportunities: With Stader, users can tap into top-tier opportunities within the DeFi landscape. Our liquid tokens consistently offer attractive returns, making Stader an optimal platform for users seeking to enhance their returns in the DeFi realm.
5. How does Stader ensure the security of staked assets?
Stader has implemented robust security measures to ensure the integrity of your staked assets. Our multi-pronged security approach includes:
Audits by Renowned Firms: Our protocol is audited by leading blockchain security firms such as Sigma Prime, Halborn, and Code4rena. This thorough examination helps ensure a high level of safety and security. All audit reports were made publicly accessible as and when they were completed, demonstrating our commitment to transparency.
Bug Bounties: To further reinforce the security of our platform, we have introduce a $1 million bug bounty program through Immunefi. This incentive program encourages independent security researchers to help us identify any potential security risks in our systems.
On-Chain Monitoring: In addition to audits and bug bounty program, we're implementing on-chain monitoring via Forta. This proactive monitoring will help us detect and address any potential security issues promptly.
Through the combination of these strategies, Stader strives to provide a secure environment for staking, giving our users the confidence to invest their assets
ETHx FAQs
1. How does ETHx work?
ETHx allows users to benefit from Ethereum staking while maintaining liquidity for their assets. Here's a simple explanation of how it works:
a. Deposit and Token Issuance: When a user deposits ETH into the ETHx staking contracts, the protocol issues an equivalent number of ETHx tokens back to the user. These tokens act as a liquid representation of the user's staked ETH, allowing them to maintain control over their assets without sacrificing potential staking rewards.
b. Multi-Pool Architecture: Once deposited, the user's ETH is managed by the Stader staking manager, which leverages a multi-pool architecture. The staked Ethereum is split between multiple pools, including Permissionless and Permissioned node operator pools. This setup not only ensures scalability and decentralization but also optimizes the return potential for the staked assets.
c. Node Network and Reward Generation: The ETH from the pools is then allocated to the ETHx Node Network, a decentralized group of Ethereum nodes that interact with the protocol's staking contracts. These nodes perform critical validation tasks for the Ethereum Beacon Chain. The tasks performed by these nodes generates staking rewards.
d. Accrued Rewards and Value Growth: As the nodes generate rewards, these are accumulated and lead to an increase in the exchange rate of ETHx relative to ETH. This growth mechanism ensures that ETHx tokens increase in value over time, reflecting the staking rewards earned from the ETH staked.
So, in essence, ETHx provides a flexible, scalable, and profitable solution for Ethereum staking, allowing users to earn rewards and participate in the DeFi ecosystem without locking up their assets.
2. How do I earn rewards with ETHx?
ETHx allows you to earn staking rewards on your ETH holdings. Here's an example to illustrate the process: Let's say a user stakes 100 ETH and receives 100 ETHx, initially at a 1:1 exchange rate. The staking APR is 5%. Over the course of a year, the value of the user's ETHx holdings increases as the exchange rate grows due to the 5% APR staking rewards. By the end of the year, the user's 100 ETH has grown to 105 ETH. This demonstrates how ETHx enables stakers to continuously earn rewards, effectively growing their Ethereum holdings over time.
3. How do validators earn rewards?
Validators earn rewards by participating in the Ethereum 2.0 Proof of Stake consensus. They propose and attest to blocks, helping secure the network, and earn ETH as rewards for their effort. These rewards are accumulated and increase the value of ETHx tokens.
4. What are the potential returns with ETHx?
The rewards with ETHx are not fixed and largely depend on the rewards released on both the beacon and consensus layers, as set by the Ethereum Foundation. Currently, the APR is approximately 3.5%. However, this rate is subject to change. For real-time APY, we encourage users to check our dApp. We continually strive to optimize these returns for the benefit of our users. To estimate your potential earnings, please use our rewards calculator.
5. How can I track my earned rewards?
Your staking rewards are inherently factored into the increasing value of your ETHx tokens.
Let's consider an example where you initially staked 10 ETH and received 10 ETHx in return. Over time, as rewards accumulate, the ETHx/ETH exchange rate may increase, for instance, to 1.02. This means each of your ETHx tokens is now valued at 1.02 ETH, resulting in a total holding value of 10 ETHx * 1.02 = 10.2 ETH.
In the above scenario, the increase of 0.2 ETH represents your staking rewards. You can continually track these rewards by monitoring the changing ETHx/ETH exchange rate and the quantity of your ETHx holdings.
6. What fees are associated with staking?
A total of 10% is deducted from the rewards generated through staking. Of this, 5% is allocated as a protocol fee, contributing to the ongoing development and enhancement of the platform's infrastructure. The remaining 5% is provided to the node operators as the node operator commission. This fee structure allows for the continual delivery of innovative staking and DeFi solutions.
7. What can I do with ETHx in DeFi?
ETHx tokens not only provide staking rewards but also give access to the DeFi ecosystem. This gives your staked Ethereum additional utility while you continue to earn staking rewards. You can utilize ETHx for:
Yield farming
Lending
Borrowing
Contributing to liquidity pools
8. What are the potential risks involved with ETHx?
Using ETHx involves certain inherent risks, as with any form of digital asset investment. Here are some of the main risks that users should be aware of:
Smart Contract Security Risk: Like all DeFi protocols, Stader's ETHx protocol is governed by smart contracts, which could potentially contain vulnerabilities or bugs. To minimize this risk, Stader ensures that its smart contracts are open-sourced, rigorously audited, and covered by an extensive bug bounty program.
Beacon Chain - Technical Risk: The Ethereum 2.0 Beacon Chain is still a technology under active development. While a large number of developers and researchers are working to ensure its stability and security, there's no guarantee that it's entirely free of errors. Vulnerabilities inherent to the Beacon Chain could potentially affect the staking process and the value of ETHx.
Slashing Risk: Validators in the Ethereum 2.0 network can face penalties, including the potential loss of all staked funds, if they fail to fulfil their duties. Stader mitigates this risk by staking across multiple reputable node operators with diverse setups.
While Stader goes to great lengths to ensure the security of your staked assets, it's essential for users to be aware of these risks and make informed decisions when staking their assets
Staking FAQs
1. What is the ETH:ETHx exchange rate, and how does it change?
The exchange rate symbolizes the total value of the Stader stake pool for each circulating ETHx token. Exchange rate = Total ETH in Stake Pool / ETHx in Circulation
Initially, the ETHx exchange rate is set to 1:1. As rewards accumulate in the pool, the ETHx:ETH exchange rate increases. Exchange rate (after rewards) = Exchange rate (before rewards) + (Rewards Added / ETHx in Circulation)
Therefore, the exchange rate evolves as more rewards are added, directly impacting the value of each ETHx token in terms of ETH.
Let's consider a scenario to illustrate this concept: Suppose, at the time of staking, there are 1000 ETH in the Stake Pool and 1000 ETHx in circulation, setting the initial exchange rate at 1 (1000 ETH / 1000 ETHx = 1).
Now, after some time, network rewards result in an additional 100 ETH being added to the Stake Pool. The Stake Pool now holds 1100 ETH, while the circulating ETHx remains at 1000.
We calculate the new exchange rate as follows: Exchange rate (after rewards) = Exchange rate (before rewards) + (Rewards Added / ETHx in Circulation) = 1 + (100 ETH / 1000 ETHx) = 1 + 0.1 = 1.1
Thus, the new ETHx:ETH exchange rate becomes 1.1, indicating that each ETHx token now represents 1.1 ETH. Therefore, even if you initially staked 1 ETH (and received 1 ETHx in return), when you decide to unstake, your 1 ETHx would be exchanged for 1.1 ETH, accounting for the rewards added to the Stake Pool.
2. What is the minimum and maximum amount of Ethereum I can stake?
The minimum stake value is 0.0001 ETH. There is no upper limit on the amount of ETH which you can stake.
3. What is the gas fee, and how much does it amount to?
Gas fee is the transaction costs incurred on the Ethereum network. It compensate for the validators tasks to process and validate transactions. The exact gas fee varies based on network congestion and complexity of the transaction.
4. How can I add ETHx tokens to my wallet?
To add ETHx tokens in your wallet, you need to follow a simple process on the Stader dApp. Simply click on the "Add ETHx" option. Upon clicking, a confirmation request will be generated in your wallet. Once you confirm this action, the ETHx tokens will be successfully added to your wallet.
5. How many ETHx tokens do I receive after staking my ETH?
The amount of ETHx you receive is dependent on the amount of ETH you stake and the current ETH to ETHx exchange rate.
Unstaking FAQs
1. What does 'unstaking' mean in the context of ETHx?
Unstaking refers to the process of withdrawing your staked assets. When you're dealing with ETHx, unstaking involves converting your ETHx tokens back to ETH.
2. What is the procedure to 'approve unstaking'?
Initiating 'unstake approval' is your first step towards unstaking your ETHx tokens. This procedure involves providing confirmation through your wallet, thereby giving Stader Protocol the necessary permissions to handle the ETHx tokens you're looking to exchange for the equivalent staked ETH. It's crucial to understand that, in this step, no updates are made to your ETHx holdings. The Stader protocol simply gains the necessary permissions to interact with your tokens for the unstaking process. Rest assured, there's no inherent risk associated with this step.
3. How do I calculate the amount I'll receive when unstaking?
The value you receive when unstaking is determined by the exchange rate either at the unstake time or the finalization time, whichever is the minimum. For instance, if the exchange rate stands at 1.05, you'll receive 1.05 ETH for every ETHx you unstake.
4. What is the 'unstaking period'?
The 'unstaking period' refers to the duration required to convert your ETHx back into ETH. Unstake requests are typically processed within 7–10 days, subject to entry and exit queues on the Ethereum network.
5. What should I do after requesting to unstake?
After initiating an unstake request, your next step is to wait for the unstaking period to conclude. Once completed, you'll be able to claim your unstaked ETH in the Withdraw tab by clicking on the "Withdraw" button.
6. Do I still accrue rewards during the unstaking period?
No, during the unstaking process, your ETHx tokens no longer earn staking rewards. The reward accumulation ceases when the unstaking procedure is initiated.
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