Germany’s Deutsche Telekom Rolls Out Ethereum Validator Node, Staking Support

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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Rocket Pool delays launch after vulnerability discovered by rival

Eth2 staking provider Rocket Pool has postponed its launch after a possible exploit was identified in the protocol’s code.

On Oct. 6, Rocket Pool announced the postponement while the team implements a fix for the bug. Rocket Pool tweeted that “relatively minimal” changes are required to patch the vulnerability and that a new launch date will be announced soon.

Rocket Pool was alerted to the vulnerability by Dmitri Tsumak, the founder of rival staking provider StakeWise.. After Rocket Pool confirmed the bug was valid, the two teams notified another Eth2 staking project, Lido, that the vulnerability also posed a risk to its protocol as well.

Lido acknowledged the bug via Twitter on Oct. 5, proposing a vote to lower staking limits for all node operators in a bid to minimize the risk posed to the protocol. Lido described the potential impact of the exploit as “low,” adding that “the vulnerability can only be exploited by the currently whitelisted Lido node operators.”

“A long-term fix is being developed in parallel and more information will be shared when it is out of a draft stage,” the team added.

StakeWise publicly announced Tsumak’s role in identifying and reporting the possible exploit to its rivals, asserting: “Even when dealing with our competitors, the more secure we are collectively, the stronger the entire ETH2 staking ecosystem becomes.” Rocket Pool also tweeted a commitment to shared network security.

Eth2 staking services

As Ether deposited to the Eth2 staking contract cannot be withdrawn until Ethereum’s forthcoming chain merge has been completed, many investors have turned to providers offering liquid staking services. Liquid staking allows tokens representing the value of staked assets to be utilized in decentralized finance without requiring the underpinning assets to be unstaked. Eth2 staking services also enable users with less than the 32 ETH minimum, to stake in pools.

Related: Staking on Ethereum 2.0, explained

According to StakingRewards, Eth2 currently ranks as the third-largest Proof-of-Stake network with a staked capitalization of $27.3 billion despite only 6.55% of supply being locked up.

By contrast, more than 70% of the circulating supply of the two-largest networks by staked capital has been locked up, with the $60.5 billion worth Solana (SOL) and $51 billion worth of Cardano (ADA) currently staked representing 77% and 70.5% of the projects’ respective circulating supplies.