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Staking without an exchange: a step-by-step guide

Betting your cryptocurrency assets is a great way to earn passive income on your holdings. While crypto exchanges like Coinbase offer staking services through their platform, you don’t need to use an exchange to target your digital assets. Proof of Stake assets such as Ethereum (ETH), Cardano (ADA), Polygon (MATIC), Solana (SOL) and Polkadot (DOT) can be wagered directly on their respective blockchain networks to earn rewards.

However, some of these assets, namely Ethereum and Polkadot, have higher barriers to revenue for staking than the others mentioned.

This means that you need a large amount of the asset to bet on your own, which prevents smaller holders from being able to earn. As such, betting these assets through Lido Finance is one of the easiest ways to bet without using an exchange and earning rewards. Learn how in this guide.

What is the Lido?

Lido Finance is a staking platform that was originally launched when Ethereum started offering staking in 2020. Lido offered Ethereum staking pools for users who had less than the general requirement of 32 ETH required to bet. They remain one of the most popular ways to target cryptocurrencies such as Ethereum (ETH), Solana (SOL), Polygon (MATIC) and Polkadot (DOT). The Lido Finance platform allows you to delegate and bet these crypto assets without requiring you to perform any of the technical requirements needed to earn staking rewards. This means that rather than having to be a validator to earn rewards, you can delegate your holdings to the Lido, a validator, which then gives you the reward proportional to your bet.

Lido only offers its services for testing betting assets such as Ethereum, which means that assets such as Bitcoin (BTC) and Litecoin (LTC) cannot be wagered using Lido. In exchange for providing its own staking services, Lido takes a percentage of the rewards, just like a commission when you picket through a centralized exchange. Lido is a decentralized autonomous organization (DAO). This means that the community votes and approves changes to the platform with the weight of the vote determined by LDO holdings (Lido governance tokens). Follow the step-by-step guide below to start staking with Lido.

Step-by-Step Guide to Stake Crypto with Lido

For this guide, we will use Ethereum and MetaMask as staking and crypto wallet assets respectively. Lido Finance allows you to bet Ethereum alongside Solana (SOL), Polygon (MATIC), Polkadot (DOT), and Kusama (KSM). The process of targeting all these assets with Lido is quite the same, but it simply requires you to use the respective crypto wallets like Phantom for Solana.

Polygon can be used with MetaMask, so its process is identical to that of Ethereum. Also, if you’re using a multi-asset wallet, like a Ledger Nano S or X hardware wallet, or a browser wallet like Trust Wallet, it will be the same process for each asset. Below are the steps required to bet crypto with Lido Finance.

Step 1: go to the Lido episode page

The first step to stake is to go to the Lido staking page: https://stake.lido.fi/:

Step 2: Connect your wallet

Then, click “Connect Wallet”, which is located in the middle of the page or in the upper right corner. You will then be shown a list of compatible crypto wallets. Check the box to accept the terms and conditions, then choose the wallet you want to link.

Lido supports Brave, MetaMask, WalletConnect, Ledger, Coinbase, Trust Wallet, imToken, Ambire, Blockchain.com, Zengo, Exodus, Coin98, MathWallet, Tally, Gamestop and XDEFI wallets.

Step 3: Confirm the connection with your wallet

After selecting the wallet you want to connect, that wallet will appear asking you to confirm the connection to the Lido. Click “Next”, then “Approve”. Then your wallet will be connected to the Lido.

Step 4: Enter the amount of ETH you want to bet

Once the wallet is connected, you can enter the amount of ETH you want to bet in the field of the page. Then, click “Send”.

Step 5: Confirm the staking transaction in your wallet

You will then receive another pop-up on the page saying to approve the transaction with your wallet. Your wallet will then appear to confirm the transaction. Click “Confirm” to approve the staking transaction (note that there will be a gas tax here).

Step 6: Done!

Now you are betting ETH with Lido. You can confirm that you are being wagered by looking at the page you just bet on, as your wagered balance will be updated. For staking of any of the other activities mentioned here, follow the same process but with that asset replacing ETH.

Is Staking with Lido safe?

Yes, staking with Lido is a safe process. When you stake with Lido you get a token like stETH (Staked Ethereum). This stETH entitles you to redeem your ETH rewards and your wagered ETH, but it is also a tradable token that you can also buy or sell. Keep in mind that you need stETH to redeem the wagered ETH, so if you sell or trade all your stETH you can’t redeem the ETH you wagered with Lidom. You can withdraw an amount of ETH equivalent to the stETH you own, which means that buying other stETH would entitle you to a higher ETH redemption
.

What other ways can I bet?

Lido is a great way to bet without a trade, but there are other ways to do it. You can directly bet on various proof of stake blockchain protocols without using Lido. This is true for Cardano (ADA), Solana (SOL), Cosmos (ATOM), Avalanche (AVAX) and any other evidence of crypto asset stake. All you need to do is a crypto wallet for the relevant blockchain.

The steps are similar regardless of whether you are using Lido to bet, the only difference is that you can choose a validator with a lower commission than the Lido or one that does not charge a fee at all.

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