How to stake ETH with Kiln through Ledger Live

With native staking, you're locking your ETH to fund a validator and earn rewards. On the other side, with liquid staking, the provider takes token deposits, stakes them, and gives the depositor a receipt redeemable for staked tokens. 

Your validator keys are generated from your Ledger device. Kiln can only see them in order to run validators on your behalf. Kiln safely stores validation keys and has received SOC2 certification for its security practices.

With Kiln’s staking service, you are funding your own validator(s). Each validator needs to be funded with 32 ETH. This is how the protocol works. In the future, Kiln will enable pooling funds with others to stake amounts lower than 32 ETH.

Your ETH is deposited into the Eth2 deposit contract and associated with a validation key that Kiln generates for you. This validation key is then used to instantiate a validator deployed on Kiln infrastructure. The validator performs on-chain duties on the Ethereum Beacon Chain, namely attestations and block proposals. For this activity, rewards are earned and accrue to your withdrawal wallet.

Please read this article which details the expected staking rewards on Ethereum now that the Merge has successfully passed.

Only the wallet you use to issue your deposit can be used to withdraw your stake and accrued rewards. Kiln or any other party cannot do that.

This means you must ensure you retain control of the wallet you use to deposit your stake.

Here's how to do it:

1. In the Kiln dashboard, navigate to Rewards. You'll see the list of the validators you're using.
2. Click on the three dots next to the validator you want to withdraw the rewards from.
3. Click Withdraw available rewards. 
4. Open the Ethereum app on your device.
5. Review and approve the transaction with your Ledger device.

Once the transaction has been confirmed, the rewards will land in your wallet.

Following the April 12th and Shapella upgrade, the Ethereum protocol automatically checks the validator balances above 32 ETH and sends rewards to the Ledger Live staking smart contract address. Then you can withdraw your rewards.

The withdrawal address is managed by the Ledger Live staking smart contract. From that address, you can claim and withdraw rewards to your wallet.

Here is how to unstake your ETH:

1. In the Kiln dashboard, navigate to Rewards.
2. Click on the validator you want to exit.
3. Select Request exit.
4. Review and approve the transaction with your Ledger device.

Once the transaction has been confirmed your validator will enter the exit queue.

You can track the progress and estimated exit time at https://beaconcha.in/.

Once the validator has exited, you can claim your 32 ETH plus any outstanding rewards.

This is expected. The process of a validator exiting from staking takes various amounts of time, depending on how many others are exiting at the same time. Validators continue to participate in the network and receive rewards until they are fully exited.

Withdrawals are planned to be included in an update of the protocol called Capella. There is no definitive date for the Capella upgrade, it is something that is decided and coordinated by the Ethereum core protocol developers, not by Kiln. It could be up to 18 months after the Merge. Staking should be seen as a long-term commitment and investment.

There are two components to rewards as described here.

Execution-layer rewards are immediately withdrawable.

Consensus-layer rewards will only be available to withdraw when the Capella upgrade described in the previous question will be ready.

You can withdraw rewards accumulated on the execution layer from your Kiln dashboard. Here’s a tutorial showing how to withdraw rewards from Ledger Live. You'll be able to claim your original 32 ETH batches stakes and consensus layer rewards after the Shanghai upgrade on Ethereum, which is planned for 2023.

When you stake with this service, Kiln will operate the validator(s) on your behalf. If these validators are incorrectly operated, it is possible for a portion of the funds you have staked to be slashed, meaning they are destroyed by the protocol.

This is very rare in general and has never happened in Kiln’s history of operating Ethereum validators; Kiln's infrastructure is purpose-built to reduce this risk. You should however be aware that the risk is not 0.

Two smart contracts introduce an additional risk:

• The deposit contract takes the incoming ETH and deposits it into the Beacon chain deposit contract.
• The withdrawal contract retrieves your rewards and sends them back to you minus a commission sent to Kiln/Ledger. Only you can trigger this withdrawal and it can only go to your depositor's address.

Both contracts were jointly developed with Ledger and are continuously audited by Halborn and Ledger Donjon.

Please get in touch with Kiln to receive the Halborn audit report.

Please read this article to learn more about Kiln monitoring, slashing, and downtime mitigation.

No token is issued when you use this product. Your ETH isn't exchanged for another token but deposited into the Beacon Chain deposit contract to fund your validator(s). This doesn't constitute a taxable event in most jurisdictions (UK, US, and others).

For informational purposes, please consult your tax advisor for confirmation.

Kiln runs a combination of Prysm and Teku validator clients.

In that case, validators' keys would be given to the owners or Ledger to switch infrastructure providers. This would minimize downtime, prevent slashing, and make sure validators only run in a single instance.

To access your rewards, head over to the Discover section of Ledger Live and select the Kiln app. Once inside the app, you'll find the Rewards tab at the top right-hand side of the app window.