The challenges of Eth2 staking, explained

Right now, staking ETH is a significant, long-term commitment.

The minimum amount that someone was able to contribute into the deposit contract was 32 ETH — and at one point in November, that was worth an eye-watering $19,877.

These funds are going to be locked until the current mainnet “docks” with the beacon chain. At present, estimates suggest that this milestone may only be reached in 2022, meaning that aspiring validators may have to wait some time until they get their funds back.

One of the biggest downsides with the transition to Eth2 is how this takes a lot of commitment from the thousands of validators who have put their crypto where their mouths are. It’s a leap of faith — not least because several other key milestones related to this project have been hit behind schedule. Should further complications arise, there’s a chance that it could be years before the deposited ETH is released from the one-way contract, and its cash value may have fallen by then.

Serving as a validator also comes with responsibilities… and risks. “Slashing” means that nodes can be penalized for failing to act in the network’s best interests — as a result, there’s a real risk that staking could cause someone to lose crypto instead of earn it. Accidentally waving through an invalid transaction or falling offline can have huge consequences.