Staking Rewards Calculator

Ethereum Staking: How It Works

Since Ethereum's Merge in September 2022, the network is secured by Proof-of-Stake validators instead of miners. Anyone can participate by depositing 32 ETH to activate a validator, which proposes and attests to blocks in exchange for staking rewards.

Staking rewards come from two sources: consensus layer rewards (block proposals and attestations, paid in ETH) and execution layer rewards (priority fees and MEV from transaction ordering). Base consensus rewards are annualized at roughly 3–4% depending on total ETH staked; with MEV, total effective yields can reach 4–6% for well-configured validators.

Not everyone has 32 ETH or the technical expertise to run a validator. This gap created the liquid staking industry — protocols that pool ETH from many users, run validators on their behalf, and return a liquid token representing staked ETH plus accruing rewards.

Lido Finance (stETH)

Lido is the largest liquid staking protocol with over $20 billion in staked ETH. When you stake through Lido, you receive stETH — a rebase token whose balance increases daily to reflect accumulating rewards. 1 stETH always represents 1 staked ETH plus rewards.

stETH is deeply integrated across DeFi: you can use it as collateral on Aave, provide liquidity on Curve, or hold it in Pendle to tokenize the yield. This composability makes stETH one of the most productive assets in DeFi.

Lido charges a 10% fee on staking rewards split between validators and the Lido DAO treasury. The net APR to users is typically 3.5–3.8%. Lido's main risk is smart contract risk and its dependence on a curated set of professional node operators.

Rocket Pool (rETH)

Rocket Pool takes a more decentralized approach. Node operators bond 8–16 ETH of their own capital and are matched with ETH from the pool. This economic bond means operators have skin-in-the-game, reducing trust requirements compared to Lido.

Stakers receive rETH, an appreciating token (unlike stETH which rebases). The rETH/ETH exchange rate rises continuously as rewards accumulate. rETH is also composable across DeFi, though with less liquidity depth than stETH.

Rocket Pool charges a variable fee (around 5–15% of rewards depending on node operator settings). For regular stakers (not node operators), the net APR is typically 3.7–4.1% — slightly higher than Lido due to lower protocol fees and node operators adding their own yield.

Solo Staking

Running your own validator gives you the highest possible yield — you capture 100% of consensus rewards, priority fees, and MEV. There are no protocol fees. A well-configured validator with MEV-boost enabled can earn 4.5–6%+ APR depending on network conditions.

The requirements are significant: exactly 32 ETH, dedicated server hardware (or cloud VPS), 24/7 uptime, and technical knowledge to maintain both an execution and consensus client. Downtime incurs inactivity penalties; serious misbehavior (double-signing) can lead to slashing.

For technically capable users with 32+ ETH, solo staking is the gold standard. For everyone else, liquid staking protocols provide most of the yield with dramatically less complexity.

How Compound Interest Affects Staking Returns

Liquid staking tokens like stETH and rETH compound automatically. Every reward that accrues increases your token balance (stETH) or the exchange rate (rETH), which then earns rewards on rewards — true compounding with zero manual effort.

Solo stakers must manually compound by withdrawing partial rewards and re-staking. Partial withdrawals (excess balance above 32 ETH) are processed automatically, but re-staking requires creating a new validator or waiting for a dedicated compound withdrawal feature.

The compound effect becomes significant over longer periods. At 4% APY:

• 1 year simple interest: +4.0% total return
• 1 year compound monthly: +4.07% total return
• 3 years compound monthly: +12.7% total return (vs 12.0% simple)
• 5 years compound monthly: +22.1% total return (vs 20.0% simple)

Use the calculator above to model your specific scenario and see how the compound effect grows your ETH position over your target holding period.

Restaking with EigenLayer

If you want to earn additional yield on top of staking, EigenLayer offers restaking. You can restake your stETH or native ETH to secure additional services (Actively Validated Services, or AVSs) and earn extra rewards.

Restaking adds another layer of risk (slashing from AVS conditions) but can meaningfully boost yields. With EigenLayer, staked ETH might earn 4% base + 2–5% in AVS rewards, though these projections depend heavily on AVS adoption.

Pendle Finance further lets you tokenize your staking yield — buy Principal Tokens for fixed-rate ETH exposure, or Yield Tokens to speculate on rising/falling staking APYs. These advanced strategies show how DeFi composability can transform simple staking into sophisticated yield strategies.