Topics Crypto
Bybit Learn
Bybit Learn
Beginner
Sep 19, 2022

What Is Ethermine & How Does Its ETH Staking Service Work?

With Ethereum’s long-anticipated and long-delayed The Merge finally completed, miners, stakers and investors are considering what steps to take moving forward. How well The Merge goes will influence some investors’ and traders’ decisions. Others, who have strong convictions about ETH or who are taking a long-term approach, may not be too concerned about the after-effects of The Merge. Ethermine is one of the top options for staking ETH after The Merge — and you can actually begin staking immediately if you want to.

What Is Ethermine?

Ethermine is a mining pool platform that allows users to mine Ether, Beam, Ravencoin, ZCash and Ergo. There are over 222,657 active miners on Ethermine, making it the largest Ethereum mining pool.

How Does Ethermine Work?

Mining Ether on Ethermine is a simple process. On the website, click on Start Mining, then choose your mining server and mining software. Ethermine offers servers in the U.S., Europe and Asia. There are two options for the U.S. and Asia, depending on where you live, so that you can choose a server closer to you. 

Mining software compatible with Ethermine includes options for Windows AMD, Windows NVIDIA, Linux® AMD and Linux NVIDIA. You can view the specific software on the Mining page. Ethermine provides a link to each software's download and a configuration guide, making it easy to get started.

Anyone with a computer can mine Ether, but it may or may not be profitable, depending on the hardware used and the cost of electricity. It’s necessary to run calculations to determine whether to mine on your own or with a large Ethereum mining pool. The average computer isn't able to profitably mine Ether. Etherscan has a mining profitability calculator that you can use to easily make this calculation.

A mining pool combines the hash rates of the participants to mine the cryptocurrency. If the mining pool successfully mines a block, then the reward is divided among the participants. A benefit of using one of the larger Ethereum mining pools, such as Ethermine, is that you’ll have a higher success rate. This mining pool is responsible for 22% of the Ethereum network's hash rate. It only charges a 1% fee on mining rewards, and the platform is available on both desktop and mobile.

Closure of Ethereum Mining Pools

Because Ethereum has long had the aim to switch to a proof of stake (PoS) consensus from its previous proof of work (PoW) model, the closure of Ethereum mining pools is inevitable. Now that The Merge has been completed, Ethermine has shut down its ETH mining service. 

All is not lost for ETH miners, however, as Ethermine has already launched Ethermine Staking so that users can continue to be rewarded for "mining" ETH. 

What Will Happen to ETH Miners After Ethereum’s Merge?

ETH miners have several possible routes to take after The Merge. One is to switch to mining Ethereum Classic (ETC), which will remain a PoW network. Alternatively, miners could begin mining another of the many PoW cryptocurrencies available, such as Ravencoin and Ergo. They may want to keep some more potential income flowing in by staking their Ether. This won't be as profitable as their previous mining activities, however, so they’ll probably want to find a new cryptocurrency to mine in addition to staking ETH. If miners choose to begin staking ETH, then they’ll be known as validators.

What ETH miners do after The Merge will affect the price of ETH. If enough miners stick around to stake, then the price of ETH may remain stable or increase. On the other hand, if too many ETH stakers or large holders leave the network, then ETH may see a selloff.

After The Merge, validators can expect to earn at least 5.3–7.3% APR on their staked ETH. You can make your ETH staking returns more predictable by running multiple validators, or by joining a staking pool.

Alternatively, ETH miners can also look forward to mining ETHW instead, Ethereum’s forked token. ETH holders will have already received their ETHW airdrop after The Merge. If you’re looking to trade ETHW, you can also do so on the Bybit platform and enjoy zero fees! Simply register for an account to get started.

How Does Ethermine Intend to Transition?

Ethermine isn't going anywhere, however, just because Ethereum has transitioned into a PoS model. The platform has made the transition alongside the Ethereum network. Its new ETH staking service will enable users to collectively stake and earn interest on 0.1 ETH and above through the platform.

This new ETH staking service isn't to be confused with Ethermine Ethpool, which is a solo staking service, not a staking pool. Solo staking involves using your own validator to stake. Another difference on ETHpool is that solo staking requires at least 32 ETH per validator.

What Is Ethermine Staking?

Ethermine Staking is a staking pool service that collectively stakes ETH from multiple users, making it possible for anyone to stake. At least 32 ETH will be in the staking pool because this is an Ethereum-imposed requirement in order to stake Ether.

How Does Ethermine Staking Work?

Ethermine Staking is currently operating with an invested balance of 660 ETH, and it is offering stakers an annual ETH interest rate of 5.23%. Prior to The Merge, Ethermine Staking didn’t charge a fee for its service. However, now that The Merge has been completed, Ethermine will start to collect a fee to help manage the nodes. Fees will depend on the amount of ETH you’ve invested, including the ETH from your referrals. If you invest 0.1 to 31.9 ETH, you’ll have to pay a 15% fee. However, this fee decreases when you invest more ETH. 

The service uses an open-source reference rate for transparency. Ethermine Staking runs on ETH.STORE, which is a reference rate created by Bitfly that provides a calculation of your daily average financial return. The code that ETH.STORE uses is also open-source, so that anyone can view it to confirm that it's safe to use.

Ethermine Staking uses a simple, non-compound interest rate. The percentage of your return is based on your initial deposit. When you stake with this platform, your investment begins accruing interest after about 36 hours or so. The exact formula is (confirmation period + waiting period + next reward day). It only takes 12 hours for confirmation, while the waiting period is 24 hours.

You could choose to eliminate the confirmation period by waiving it in the email you receive, or through your dashboard. Otherwise, if you want to go through the confirmation period, it begins after your transfer has gone through 65 confirmed blocks. Once the waiting period ends, your staked ETH begins accruing interest on the next reward day. Reward days start at 12:00:23 UTC.

Ethermine Staking offers a referral program, which works as follows: When your referral stakes ETH, the platform reduces your fee based on that amount. For example, if you’ve staked 20 ETH (which carries a fee of 15%), your fee would drop to 13% if a referral stakes 12 ETH, since staking 32 to 95.9 ETH carries a 13% fee.

Unlike ETH mining, there are no computer hardware requirements to participate in this staking pool. You don't need technical knowledge for this service, either. If you were to go with solo staking, however, you’d need some technical knowledge to correctly set it up. In addition, losing your 32 ETH due to an error in setting up your solo staking is a possibility.

An invested amount of 96–959.9 ETH carries a fee of 10% on returns. The lowest possible staking fee is 8%, for investments of 960 ETH and above.

Pros of Using Ethermine Staking

Low Barrier to Entry

You can earn rewards with as little as 0.1 ETH. If you were to stake on your own, you'd need at least 32 ETH to generate rewards. This low barrier to entry allows anyone to get started. Because of this, you may be able to get some of your friends and/or loved ones in on staking, too.

Accurate Risk Assessment

Ethermine Staking promotes accurate risk assessment, because its reference rate is open-source and provides daily calculations on your returns. In addition, it's not just your reference rate that you can view. You can check the reference rate of other validators who are using the platform as well. For instance, if you were planning to move to another country, you could see what the reference rate is in that region.

Available Support

Ethermine Staking has a support channel open on their Discord. Thus, you don’t need to worry that you’ll be left in the dark if you encounter any issues.

High Liquidity

Because the platform has a high number of users and staked ETH, you can benefit from larger and more reliable returns, and the platform is unlikely to shut down.

Transparent

The platform uses an open-source code and reference rate. You'll always know clearly what your daily returns are, and you (or anyone else) can check the code to find out how the system is functioning.

Easy to Use

You don't need to maintain your own node when you stake ETH through Ethermine Staking. Maintaining a node takes more time and requires technical knowledge — whereas you just have to click a few buttons with Ethermine Staking. Of course, there are also hardware requirements and energy costs with running your own node.

Cons of Using Ethermine Staking

No U.S. Customers

Ethermine Staking won't be accepting users from the U.S., so if you’re a U.S. resident, you'll have to find another staking pool that accepts U.S. users.

High Fees

Ethermine charges a higher fee for its new ETH staking service on smaller amounts of staked ETH. Thus, if you only have a little bit of ETH to start with, your fee could be as high as 15%.

Risking ETH

Just as with other methods of staking ETH, there is risk involved. Exploits, bugs and slashing are some of the potential risks that come with staking ETH. There's also the possibility of withdrawal freezes with any platform that you use to stake.

Withdrawals

After The Merge, you'll need to wait until the Ethereum Shanghai Upgrade to withdraw your staking rewards. This could take anywhere from six months to five years.

Ethermine Staking vs. Other Ethereum Staking Pools

Rocket Pool, Staked and Stkr are some of the other ETH staking pools that you can use.

Similarities

Similar to Ethermine Staking, Rocket Pool and Stkr also allow you to start with small amounts of ETH. However, Stkr (a DeFi protocol that was developed by Ankr, and is powered by the ANKR token) has a higher minimum of 0.5 ETH. All of these platforms are fairly secure, and easy to use as well.

Differences

Rocket Pool and Stkr tokenize your ETH earnings so that you can make withdrawals without having to wait on the Ethereum protocol to roll out the Shanghai Upgrade. You would earn rETH from Rocket Pool and aETH from Stkr. You could sell your tokenzied ETH, or use it in DeFi products.

Stkr functions through MetaMask, so you don't need to use an external UI to manage your staked ETH. This is convenient for those who use MetaMask.

Rocket Pool spreads out a slashing loss across the entire staking pool, so that no single person takes the hit alone. Slashing is when the individual operating the node makes a mistake and loses ETH. Theft and loss of ETH is a possibility, no matter what type of staking method you use. Rocket Pool could be a way of minimizing your losses if one were to occur.

Stkr also has protections in place for users in case the node is slashed. Those who want to run nodes for Stkr need to provide 4 ETH as a security deposit for the purpose of compensating stakers (who may suffer from the node being slashed). If a node is slashed too many times in a certain time period, the person who was running the node will no longer be allowed to operate it through Stkr.

Since you can start staking ETH on Rocket Pool with as little as 0.01 ETH (which is even smaller than the 0.1 ETH minimum for Ethermine), you may want to try Rocket Pool. Staked, however, is geared toward high-net worth investors. For those who have the liquidity to use Staked, it offers higher returns than other options.

Is Ethermine Staking Worth Trying?

Ethermine Staking is worth trying for both beginning and experienced traders. A trustworthy brand that's already in the mining and staking industry is behind it to help give you confidence. However, it's only for those with a long-term plan, because your ETH will be locked up until Ethereum rolls out the next phase that will allow withdrawals. It could take years for the Shanghai Upgrade, just as it took years for The Merge to finally occur.

The Bottom Line

Ethermine Staking is an easy, relatively safe way to stake ETH. Whether you have a small or a large amount of ETH to stake, you can use the platform. There’s no cap on how much ETH you can stake. The downside is that you'll have to wait six months to five years to withdraw your rewards, because that’s dependent upon Ethereum rolling out its next critical advance, the Shanghai Upgrade.