Ethereum Staking After The Merge: How It Works and What It Earns
How Ethereum Proof of Stake works, current staking yields, validator requirements, and the easiest ways to stake ETH in 2025.
Since The Merge in September 2022, Ethereum runs on Proof of Stake instead of Proof of Work. This means ETH holders can earn rewards by staking, but the options and trade-offs are important to understand.
How Proof of Stake works
Validators lock up (stake) 32 ETH as collateral and run software that proposes and validates blocks. Honest validators earn rewards; dishonest ones lose a portion of their stake (slashing). The network randomly selects validators to propose blocks, and committees of validators attest to their validity.
Current staking yields
ETH staking yields fluctuate based on the total amount staked and network activity. As of early 2025, the base yield is approximately 3–4% APR. Additional rewards come from priority tips on transactions, which can spike during periods of high network activity. MEV (Maximal Extractable Value) rewards add another 0.5–1% for validators using MEV-boost software.
Ways to stake ETH
Solo staking requires 32 ETH (roughly £60,000+) and running your own validator node. You keep all rewards but need technical knowledge and a reliable internet connection. Liquid staking through protocols like Lido (stETH) or Rocket Pool (rETH) lets you stake any amount of ETH. You receive a liquid token representing your staked position, which you can use in DeFi while still earning staking rewards. Exchange staking through Coinbase (cbETH) or Binance is the simplest option — you stake with a few clicks. The exchange handles everything but takes a commission (typically 10–25% of rewards).
Liquid staking in detail
Lido dominates liquid staking with over 30% of all staked ETH. When you deposit ETH, you receive stETH, which accrues value daily as staking rewards accumulate. The exchange rate gradually increases — 1 stETH becomes worth slightly more than 1 ETH over time. Rocket Pool offers a more decentralised alternative with rETH. The trade-off is a small smart contract risk and a commission (typically 10% of rewards).
Tax implications for UK stakers
Staking rewards are taxed as income at the point of receipt. The GBP value when you receive rewards becomes your cost basis for CGT. With liquid staking tokens, the tax treatment is more complex — see our detailed guide on staking tax for the full breakdown.
Use our staking calculator to estimate your rewards based on current rates and your planned deposit amount.
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