Ethermine: Worlds Largest ETH Crypto Pool Switching to Staking
Having consistently dubbed its transition to Ethermine Staking, Bitfly presented the terms of its service, which has long been expected in the community. Everyone who wants to use should own at least 0.1 ETH. They can transfer them to Bitfly, and thus join the stable fund, which in the future will distribute the reward for new ETH among its users. Bitfly has already created a benchmark interest rate for ETH. It is called ETH.STORE and its aim is to determine the future profitability.
Own base interest rate determines the profitability
“ETH.STORE represents the average return achieved by validators on the Ethereum network over a 24-hour period. Thus, it represents a kind of basic rate of return that can be expected when betting on Ether,” Bitfly said in a statement. Thus, on Wednesday morning the interest rate was 4.429% per annum. In general, the data indicate that since April, the interest rate has fluctuated between 4 and 5%.
In order to attract as many users as possible, the new service will operate without a fee at the beginning — until “The Merge” happens and the old mainnet Ethereum merges with the new Beacon Chain, already working on Proof of Work. From now on, Bitfly will charge its customers for staking services depending on the amount of ETH deposited. The fee table has been compiled in such a way that basically it means that Bitfly will participate in the interest rates that staking brings.
Since the Beacon Chain has been operating since the end of 2020, there are already many staking providers in the Ethereum world. So far, cryptocurrency exchanges such as Coinbase, Kraken and Binance have captured their market share. However, with a 30 percent share, the relatively new company Lido Finance has become a leading staking provider. With the advent of Ethermine, a new major player has emerged, which is likely to shake up this rating.
Staking is now tied for long
In any case, it is important to know that those who participate in staking on Ethereum need more endurance. Because at the moment it is still unknown when you will be able to withdraw your deposits again — after all, ETH rates should ensure the security of the network, so withdrawals will only be possible later.
“Withdrawal of funds is possible only when the Ethereum protocol allows you to pay all stakes. You will be able to withdraw the Ethers you have invested in no later than 5 years,” Bitfly says. “There are no definite dates for the Merge, but the core developers are making every effort to ensure the possibility of merging and withdrawing funds. We expect that withdrawals will be possible soon after the merge (in 6–12 months).”
In all likelihood, the “Merge” is to take place around September 15. Preliminary work and tests for this have been carried out for several years already. But, according to Expert:inside, there remains an uncertainty factor, since the transition to a new system is like an open-heart operation, and there may always be problems with software updates. Cryptocurrency exchanges such as Bitpanda that support Ethereum’s transition to staking are likely to experience hour-long pauses during which Ethereum will not be able to trade.