The Ethereum network is in the final stage of its transition to the Proof-of-Stake consensus mechanism, with the 'merge' of the beacon chain and the Ethereum mainnet happening shortly this year. The beacon chain was created in 2020 to test the staking consensus mechanism.Ethereum 2.0 will allow holders of ether, Ethereum's native token, to passively stake (pledge) their coins to verify transactions and maintain the security of the network.

The validators (the term for users who take part in staking) will be rewarded with newly minted ether coins for their participation.This presents a new passive investment opportunity for traders who could previously only actively invest through the action of buying and selling ether.In the previous Proof-of-Work consensus mechanism, transaction verification and adding blocks to the network required high levels of computational power. This would lead to excessive consumption of energy, not to mention the initial cost for the appropriate hardware required for mining.Also Read: What are Ethereum killers and how far have they come?Staking does not require an energy consumption model, nor does it require complex computational hardware.

It only requires a user to have a digital wallet and a certain amount of ether holding.How can traders switch to staking?Traders have two options to stake in the Ethereum network: staking themselves on the network or using a custodial platform to take part in staking.Traders who want to become validators on the network need to put up 32 ethers as collateral from their wallets. They should also remember that the funds they lock up for staking can be slashed (forfeited) if they go offline or produce faulty blocks on the network.