MetaMask allows Ethereum owners to have a pooled stock
Crypto wallet firm MetaMask has enabled users to pool their funds and share their assets on an enterprise-grade validator managed by blockchain software company Consensys.
With the service, MetaMask wallet users can earn Ether (ETH) without having to meet Ethereum's minimum requirement of 32 ETH, which at the time of this writing is worth $112,000.
Using MetaMask's staking pool, users can contribute less than the required ETH and still qualify for the rewards that go into securing the network.
What does ETH hold?
After Ethereum evolved into a proof-of-stake (PoS) consensus mechanism, it moved from a mining model to a staking model. This means that the network needs validators to process transactions, store data, and add blocks to the Beacon Chain.
Essentially, authenticators keep the network secure and decentralized. Consensys senior product manager Mathieu Saint-Olive believes that Metamask's bundled staking service will contribute to Ethereum's decentralization and security. Saint Olive told Cointelegraph:
“Having more users and having more ETH stakes is important for the security of Ethereum. […] Also, the underlying authentication infrastructure is distributed across multiple cloud providers, multiple regions around the world, multiple consensus clients, and multiple performance clients.
Validators are awarded interest on their stake coins for their active participation in Ethereum. However, a stake in ETH can be lost if a validator fails to do its job or is involved in a compromise, commonly referred to as a “strike.”
St. Olive said: “If a check goes down, this will lead to a loss of user funds, which is the main risk around the stock. However, the concessionaire's executive said that since 2020, their inspectors have gone smoothly “without any untoward incidents”.
Related: Is $4,000 Ethereum a Distant Dream? Futures premium drops to 3-week low.
99% of ETH owners do not have 32 ETH
Although the benefits of the shares can be great, not everyone can meet the minimum requirement of 32 ETH.
As the price of ETH rose above $3,000, the requirements to become a validator became expensive. Ether is currently hovering over the $3,500 mark. This means that a person needs about $112,000 to participate in Ethereum staking.
However, not everyone can afford to participate. Citing blockchain data, the Metamask team highlighted that “99% of ETH holders have less than 32 ETH.”
The wallet service provider also noted that currently 74 percent of ETH is untapped, and that the majority of ETH is stored in a few large pools.
For these reasons, the wallet provider's new service aims to bridge the gap for users with less than minimum assets. Users with less than 32 ETH can participate in the network's inventory through Consensys validators.
Additionally, their assets may be “out of stock at any time” based on validators' checkout queue protocols.
In a previous Cointelegraph interview, Consensus CEO and Ethereum founder Joseph Lubin said the new service could be more convenient compared to liquid staking.
“With the flip of a switch, you can pretty much allocate a small amount or a large amount of ether and quickly return it,” Lubin said.
It is not yet available in the UK or the UK
While the service looks convenient for ETH holders, it is not yet available for users in the United States and the United Kingdom. However, MetaMask has indicated that it is working to make its service available in these regions soon.
St. Olive notes that the regulatory landscape in the US is still “undergoing a meaningful evolution” in Ethereum staking policy. According to the executive, they are expecting to deliver the product to the US once the policy progress is seen.
Similarly, the executive stressed that regulators expect to release further regulatory guidance in the UK. St. Olive told Cointelegraph that they expect the UK to “modernize the current regime and have greater transparency for the popular market”.
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