Self Custody and Staking: What You Need to Know | Posted by SatoshiLabs | May 2024

Key Takeaways

• With the Trezor wallet, your private keys and coins stay safe offline. However, entering into a smart contract introduces an element of trust in the smart contract owner. For ETH staking, it will be our partner Everstake, not Trezor.
• Trezor and Everstake’s partnership for ETH staking is backed by independent audits aimed at providing a trustworthy staking service.
• Additionally, unless you run the nodes and validators yourself, which is not easy to do, you have to rely on the security of your provider.

Trezor was born in a time when there was only Bitcoin, and it was a completely different scene from today. There were no (desired) decentralized apps (DApps), no smart contracts, and no DeFi.

Trezor was created with one purpose: This means storing your coins safely offline. That purpose continues. If you need to transfer your coins somewhere else, just connect Trezor, confirm the transaction, and exit. With the introduction of many new coins, such as Ethereum (ETH) or Solana (SOL), the emergence of “smart contracts” has added functionality and complexity to the space.

With this background, here’s what you need to understand:

• For Ethereum (ETH) holders, using a self-custodial solution like the Trezor hardware wallet provides greater peace of mind. Even if your Trezor connection is lost, your private keys remain safe offline. If you don’t confirm your transaction on a trusted display, you’ll never get out.
• On the other hand, there are changes in the interaction with smart contracts (and this also applies to ETH held in hardware wallets). This includes trusting smart contracts. You can (and should!) technically audit a smart contract before engaging in it, but it’s not easy to do unless you’re a seasoned professional. Although many argue that these contracts are decentralized, most have the option to be upgraded or allow various changes to be made by the smart contract owner. parameter Contracts that may pose risks.

There are nuances to staking. This is especially true when dealing with protocols like Ethereum and Solana, where running nodes and validators is the most secure method. However, this is also the least practical for most users. Hardware demands and high stakes, such as Ethereum’s minimum of 32 ETH, make it inaccessible to regular users.

To bridge this gap, “pooling” services have emerged. As the name suggests, it allows users to combine assets to meet their staking requirements. However, this convenience comes at the cost of relying on the security of the pooling service provider.

At Trezor, we strive to make cryptocurrency security easy. For better or worse, staking is part of it. That’s why we’ve partnered with Everstake, a leading staking provider with over 6 years of track record and trusted by over 735,000 investors. Currently, they hold over $1.5 billion of ETH. The Everstake platform has undergone two independent audits by ChainSecurity and Ackee, leading smart contract security companies.

• Using smart contracts for “pooling” staking changes the trust model slightly.
• With Trezor, your coins are 100% offline as your private keys are protected by a hardware wallet when your device is turned off and your ETH is not staked.
• However, staking ETH puts your assets under your control, with the added element of trust in Everstake.

We wholeheartedly trust Everstake and recommend it as the best choice for protecting your staked assets.

What else? Staking with Trezor also provides what we believe to be the best possible solution in a Proof-of-Stake environment, as once you decide to unstake, all staking rewards are immediately secured by the Trezor device.