Telecom giant Deutsche Telekom, the parent company of T-Mobile, announced on Thursday the launch of its Ethereum staking services.
The German company stated that its T-Systems Multimedia Solutions (MMS) division is working with a liquid Ethereum 2.0 staking service and DAO StakeWise to operate a staking pool that allows customers to participate in validating transactions without having to run a validator themselves. Deutsche Telekom is also participating in the governance of the StakeWise decentral autonomous organization (DAO).
In a statement, the Head of Blockchain Solutions Center at T-Systems MMS, Dirk Röder, said, “As a node operator, our entry into liquid staking and the close collaboration with a DAO is a novelty for Deutsche Telekom.”
Deutsche Telekom believes liquid staking through its new service will attract customers because, like other such services such as Lido, the offering helps customers save time and the hassle of having to set up a validator node for themselves. Furthermore, liquid staking is cheaper than ordinary Ethereum staking which requires users to set up their own node and they need to stake at least 32 ETHs, which at today’s price is around $43,338 in order to participate in staking activity.
Deutsche Telekom has been actively participating in the crypto landscape for some time. Last year, the company entered into the crypto space by investing in Celo, a San Francisco-based blockchain startup that offers cryptocurrency on mobile services.
Last month, T-Mobile, a subsidiary of Deutsche Telekom, partnered with Nova Labs to launch a new 5G wireless service called Helium Mobile that aims to allow users to earn rewards in crypto tokens for sharing data.
Why Users Are Preferring Liquid Staking
Ethereum staking is the process in which users lock up their funds to help validate blocks and secure the Ethereum network. In return, they receive staking rewards in the form of more ETH. However, many limitations still hinder users from participating in the staking process. For example, investors are required to deposit a minimum of 32 ETH collateral (worth approximately $43,338) to become a validator. This is quite expensive for ordinary investors.
Liquid staking resolves such limitations as it allows users to stake any amount of Ethereum and to effectively unstake their ETH without the unnecessary requirements of transactions. As a result, Ethereum staking has been gaining more popularity as it is an alternative way in which users are locking up their stakes and earning rewards.
Late last month, Coinbase launched its liquid staking token, called Coinbase Wrapped Staked ETH (cbETH), ahead of the Ethereum blockchain’s Merge – a liquid staking service that allows users to generate extra yield on top of standard rewards for staking or locking crypto tokens in a network. Binance, Lido Finance, and Kraken are also other institutions that run major Ethereum staking pools.
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