60. Earn Cash With Ethereum, Here’s How.

If you look really as to how the tokens working, a lot of these tokens are inflating their supply, right? So what they're actually doing is they're printing more tokens to then give you those as staking rewards. So, yes, it might seem like you're earning all these additional, you know, coins or tokens or whatever they are, but the reality is they're just inflating their supply, which is no different to what the, you know, the reason why the purchasing power of fiat currency becomes the way it is is because they inflate the supply. Welcome back to another episode of the Benneberg show with your favorite MBA and high school dropout where we talk everything. Crypto, business and personal growth. We've been talking a lot about personal growth. We've had some cracking interviews that might already be out and we've got some personal growth ones coming out in the future. But today we're going deep on Ethereum and ways you can actually stake your Ethereum, earn a Yield without needing the 32 ETH minimum that you require if you're going to set up a node. So as we know, Ethereum moved from proof of work to proof of stake last year. And a way that you can validate the Ethereum blockchain and actually earn a return on that is through staking your Ethereum. You're basically giving your Ethereum to help secure the network and then you can be paid rewards for making that action. But the way to do it normally, or I guess you know, to actually do it as a setting up a node, you actually do need 32 Ethereum, which is around 60,000 thousand US dollars to do that, which most people don't have. So there's a really cool way of doing it, which is called liquid staking, which is an area that we really like. And today we're going to walk through the pros and cons of doing it on liquid staking, how it works, and three different options to do it. How are you, mate?

I'm going really well. I'm excited to do this episode and just looking at some of the work we've got on the platform, particularly by Nick and everyone was poo pooing proof of stake and it's all going to hell, it's going to zero. He, he was the one guy that's like, no, this is a good thing. Here's what's going to happen. Absolutely nailed it. Went super deep, went into the protocol level, everything that was happening there. And then even after, when people are able to take their staked coins out. He's like, no, this is going to be a good thing. And explained exactly why. Nick, shout out to you, I love you. I might even be in love with you, mate. And I'm really looking forward to going through f staking today. Ben.

Yeah, so this, this resource that we're walking through is something we delivered to our members last week inside the collectorship platform. So we've got a couple of thousand investors that subscribe for sort of insights analysis. Those people that really want to upgrade and win in crypto. We try and give them, you know, some really good content and sometimes we share some of that on Ben and Bergs as a little bit of an insight is what we do and that's what we're doing today. But to get started, really, what, what even is liquid staking? Liquid staking is basically a way that you can pull your Ethereum with others to deposit into the Ethereum network to earn those staking rewards and they take a fee. So rather than having to have that 32e to participate, you can basically, as I said, pool that. It's more user friendly, it's more passive way to pull your crypto with people you don't know and then you can enter liquid staking to earn those yields. Now there's three kind of main ways you can do this through liquid staking just quickly before we do that. The other way to do it, if you want to go straight through what we call liquid staking protocols where you go direct into the smart contract of Ethereum, you can do that through your ledger. It is, as I said, it's a little bit more difficult with the amount of crypto you need to do that. And there's some other ways you can do it, but we won't talk about that today. Today is more for predominantly, you know, the most of us here that don't have that 32 ETH, you can do it through three main ways and they have pros and cons. The risk here as well, before we get into everything, is like there is always risks with everything. You have the smart contract risk, we have regulatory risk where we've seen the SEC announce like, you know, things around securities and different exchanges around staking. There's liquidity risk, there's a lot of risk in staking, so please be aware of that. It's actually something that I don't do. Bergs, do you stake your crypto?

No, I don't. I don't think the returns at the moment for me are high enough for me to Monitor it and do it. I. Although I. With liquid staking, I don't have to run my own, you know, validator with 32 8th I can do a small portion of it. So it's something I'm definitely going to look into. But at this point in time I don't stay.

Yeah, neither do I. Not saying it's not, it's not a good idea, but I'm in the same camp as Bergs on this one. I just like to sit, hold my. My Ethereum and Crypto. But for most, well, for some people you're going to want to stake your eth. So today is a little bit of a guide. So number one is Lido. Lido is the largest liquid staking protocol. It's basically a decentralized platform where you can put in your eth. It's managed by a dow. So Lido dao basically control how the protocol works. And by holding the Lido token, the LDO token, you can actually vote on different things around the parameters, the fees, the operators, things like that. So you can actually buy Lido the underlying token for the Lotto platform if you want.

And if we look here like there's a chart that we might link to in the show notes for those that are members of Collective Shift, we've actually got like a screenshot here of the balance of liquid staking protocols. And Lino is by far the biggest and we're seeing a bit of an Upgrade coming. Lido V2 in the middle of 2023. So with Lido you're looking at around as of April 2023, a 4.5% annual return rate. You can get your distribution of the staking rewards daily. Lido takes a 10% commission. It's relatively easy to use. We're sort of writing this like a medium user friendliness and medium accessibility. So if you're a beginner, it's not a bad platform to look into. And that token, as I mentioned, is the LDO token. Next we have is Coinbase. So Coinbase is a centralized exchange, probably the most reputable exchange based out of the us. It's listed on the Nasdaq and you can use Coinbase to stake your Ethereum as well. All you need is a Coinbase account, you need to verify your identity and you can basically get involved with that. Downside risk here is that the SEC may be pursuing Coinbase for, you know, offering this as an unregulated security because there's an expectation of profit. So we do need to be wary that the SEC haven't put a real framework around if staking and Ethereum is a security just yet. Coinbase and a lot of people, people inside crypto are saying it shouldn't be. Some people in the SEC think it should be. There's been no decision on that yet, so just something to be wary of. Coinbase take a little bit of a higher fee, they take 25% fees instead of 10% and a smaller annual return looking about 3.8%. But it is, yeah, the user friendliness is super easy to involved with is Coinbase. It's a, it's a known exchange.

Yeah. And I think if you're already holding your ETH on Coinbase, you've accepted the exchange risk, you're holding it there, you're not doing self custody. So there is an option while you're holding it there to earn additional yield and you're still accepting that risk. So I would see the risk is not increasing by that much because the risk is more the exchange itself in my personal opinion. So that's a good opportunity to earn additional yield.

Yeah, great point Burks. And third but not least is Rocket Pool. So Rocket Pool is actually a Queensland based company, the most decentralized again another staking pool that has the ability to put your Ethereum in and then it's a. Also has some of the fundamental principles of decentralized finance. So it's non custodial, sell sovereignty, etc. Etc. You can also buy the underlying token LSD. But when you're sending your Ethereum to Rocket Pool and the way Rocket Pool works is that they set up mini pools so you only need to pull up to 10.4 eth instead of the 32e so you know, you can, you can obviously deposit less than that, but that's how they get access to the network. They're looking at a much higher rate and your return rate is 7.1% as of April, 15% commission fees, probably the lowest user friendliness out of the three I've just mentioned, but easy to access. Pretty low liquidity and volume though. So in terms of like Lido, it's much less in terms of the amount of people using it. So they're sort of the three different major players within the liquid staking field. As we mentioned before, like there is a lot of risks with liquid staking, just staking in general, you know, Ethereum, if anything, if you're wanting to like stake your crypto, like I'd probably say ETH is the least risky out of the most risky. But yeah, there's sort of three different options there. If you really want to get a yield on your, on your eth.

I love that these options exist. It's more innovation and it's more opportunity to earn capital and people will need to select whether it matches their risk profile and whether it's right for them. And we touched on some of the risks before and we'll just like, we'll go through them now where. And I love this cartelization. So if you've got a Dow or something controlling a certain area or if you have a validator that gets too large, they can then collude. If they own a significant percentage, they can collude for their own benefit. And we, we tend to see this with.

Pretty much any business. Right. Like you see it with. Although when admit it, like whatever, you have a big four, you have like mining or banking and they'll, they will collude. They're all on the same boards. They'll do things like price signaling, but these guys can actually manipulate things for their benefit. So that's something you need to be aware about. And there are tools out there, particularly June analytics where you see how large the validators are, but then within a validator and how many people own a specific amount of the tokens. Like if someone or a Group owns 90%, that's autocratic. They can just vote on anything they want. So that's something you need to be aware of. Other ones are smart contract risk. Again, this is nascent technology. They're building it on smart contracts. These things have been tested. But there can be future things or exploits that can come along. So know your smart contract risk, regulatory risk. This comes with, like we were saying with Coinbase or potentially your regulator, whether it's the SEC ASIC here determining that ETH is a.

What do we call it? Security. Security. Thank you. ETH is security. Then that will change the way that you interact with it and whether you're able to hold it or not. Systemic risks as well. So the whole crypto ecosystem is intertwined. A lot of dominoes can fall. And like nothing beats just holding that protocol asset and having self sovereignty around it. Nothing beats that. But again risks do come with that. And you need to know are you actually holding the protocol product itself? Like are you holding ETH or are you holding a derivative product of that asset? Just know what you're actually holding. Again, deeping. So LSD is traded on an open market and coordinated efforts to either short that or put pressure on it or the underlying asset, that's an Extremely small risk, but it's still a risk. And again, liquidity risk. If there's not enough liquidity, then the LSD token may suffer while you're attempting to trade it. So I love that these options exist at this point in time and the yields that are available. I personally won't be taking any of these up. I might explore some of them just to see how they work with a very small amount of eth, just to see how the protocols work, what the experience is like. I'll do that on a new wallet, an address that is segregated from what I'm doing with my other stack because I do like exploring it, but in terms of putting my stack in there, I personally won't be taking this up, but love that it exists.

It's a really good point. And it's also important that I know a lot of other people stake different chains and, you know, there's a range of different ways you can do this and also different tokens that offer rewards. It's important to know that you need to look into some of the token economics of some of the projects, projects that offer these rewards. Some of them are offering 10, 15, 20 yields or, you know, APYS or whatever they call them in, in that individual token. But if you look really as to how the token's working, a lot of these tokens are inflating their supply, right? So what they're actually doing is they're printing more tokens to then give you those as staking rewards. So yes, it might seem like you're earning all these additional, you know, coins or tokens or whatever they are, but the reality is they're just inflating their supply, which is no different to what the, you know, the reason why the purchasing power of fiat currency becomes the way it is is because they inflate the supply. So that's different to Bitcoin. Ethereum has a very low inflation rate. I'm not entirely sure what the current inflation rate is, Bergs. I mean, I'm pretty sure they were aiming to get it to near zero. But it's important to note that if you're staking on a lower token, it's important to look at the token economics. And if you need help with that, we have those details inside the collectorship platform. So as an insider member, you get access to our reviewed assets, where we have a lot of those tokens in there and we actually detail that out for you to help you on your research.

Exactly right. And it does get complicated. You need to see the issuance, you need to look at the smart contract. You need to see where that issuance is coming from, where it's going and then who's buying those tokens and how they're being market sold.

Yeah, yeah, there's a lot in there. So that's why we're here, to help collective shift. You know, we've got over a couple thousand members now and, you know, really helping you get advanced, like get ahead, but also save you time. So we've got a team of six analysts that are doing a lot of the work for you. So you can get in there. Especially from the altcoin perspective. We've got a great, a lot of great analysis in there, giving you what we like, what we don't like, the ins and outs completely. No bs. So if you've only got an hour a week giving exactly what you need in that platform. So go and check it out. Collectorship IO Bergs. I think that's it for today. Thank you very much.

Thanks so much, mate. I enjoyed going through that. A bit more knowledgeable now.

Amazing. Thanks so much for listening, everyone. If you, if you have a friend or family member, colleague that's into crypto, might be getting into crypto, maybe they're staking crypto on some sort of random token on random exchange, make sure to send them this episode. We'd love to help them out and as always, please leave us a review. If you liked or even not liked the podcast, we'd love to hear your feedback and we'll see you next time.

Thanks so much, folks.