Ethereum staking earns you 4.2% per year — just for holding ETH and supporting the network. No trading, no risk from price volatility. Here's how it works in plain English.
Ethereum uses Proof of Stake. Validators lock up ETH to process transactions — they earn new ETH as a reward (currently ~4.2% APY). You're essentially getting paid to secure the network. The more ETH staked, the lower the yield (and vice versa).
Solo staking requires 32 ETH (~₹1.1 crore) — impractical for most. Lido lets you stake any amount. You deposit ETH, get stETH (a token representing your staked ETH + rewards). stETH can be used in DeFi while still earning the 4.2% staking yield. Easiest option.
Buy ETH on CoinDCX → withdraw to MetaMask → go to lido.fi → stake. Your stETH earns ~4.2% APY, compounded daily. Staking rewards are taxed as income at your slab rate in India. Track rewards in Koinly for ITR purposes.
Main risk: ETH price volatility (the staking yield is in ETH, not rupees). Smart contract risk with Lido is low — it's the most audited protocol in DeFi with $35B staked. For long-term ETH holders, staking is almost always better than just holding idle.
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