What To Do With Your ETH If You Don't Know What To Do

A Guide To Putting Your ETH to Good Use

Update 04/25: I originally recommended that you farm ZkSync, but someone brought it to my attention that they think the snapshot has already happened, given that the token is already being listed prelaunch on CEXs. So instead, we’re focusing on Scroll.

First off, I just want to say I appreciate your support as I build this Substack. It’s a lot of time, but I enjoy the research a lot and love to write. The suggestions and comments (and coffees!) I have gotten have been awesome. Muchas Gracias. I hope you’re all hanging in there with this market volatility.

Now, into our main topic. If you have ETH and you feel a bit left out watching everyone claim airdrops and earn yield, here’s what you can do with your ETH if you don’t know what to do. It’s really not very complicated, but we’ll discuss some risks you should be aware of.

What Are The Risks?

Let’s be clear…keeping your ETH on Mainnet and in cold storage is the safest thing you can do. Every protocol you interact with is one more potential point of failure. We are only going to discuss legitimate protocols that should be safe, but crypto doesn’t give a damn about your shoulds and even the most reliable protocols have had failures before.

Thus, I have split up your ETH options into two categories of risk based on how degenerate the activities are. Personally, I would only do Option 1 with most of my ETH and then designate a small percentage to Option 2.

Option 2 becomes significantly risker once we opt for using bridges. Bridges represent amazing honeypots for hackers since they centralize a huge pool of assets. If a bridge is hacked, any stolen assets simply go *poof* on their corresponding chain (i.e. if you bridged ETH to Optimism and your bridge is hacked, you now have no ETH on Optimism).

Is It Too Late to Airdrop Farm?

I’ve heard this from some people that they think it’s too late to airdrop. I’ll be honest, in December when I started farming, I thought it was too late.

“Now” always feels like too late.

It might be too late for some protocols, who knows. But it’s certainly not for others (including EigenLayer and Renzo). I personally would just do it and let the cards fall where they will.

Option 1: The Least Risky

As I said before, the least risky thing you can do is do nothing. However, if you’re inclined to do something, this is the safest option.

How to Stake your ETH

By staking your ETH, you get rewarded for participating in ETH’s Proof of Stake consensus protocol and you earn yield (right now, about 3-4%). If you don’t have 32 ETH to run your own validator, you can use Lido or RocketPool, which pool your ETH and then operate the validators for you.

Lido and RocketPool are the largest and haven’t had any issues until now. If you want, you can stake your ETH directly with these protocols. However, I would simply suggest swapping your ETH for either stETH (Lido) or rETH (RocketPool). You can use any decentralized exchange. I personally suggest Uniswap. I would recommend getting rETH just for the sake of maintaining decentralization within the Ethereum ecosystem (since Lido is the largest staker of ETH right now).

These tokens are called LST (Liquid Staking Derivatives) and basically represent a proof of deposit into Lido and RocketPool staking pools. You’ll see that each of those tokens are worth more than ETH. This is because the yield is build into these LSTs. The yield just compounds into the price of the LST.

Also, if you have a Ledger, you can simply use their staking service directly from your cold storage.

Now, just hold on to your LST with your cold storage for eternity and worry not anymore. This is extremely hands off but you’re also not just letting your ETH sit idly. You can let your FOMO go.

Optional 1.5 Alternative:

This option adds an additional layer of risk then Option 1, but not as much as Option 2.

There are really two options. I’m listing them in the order of risk:

1. Restake your rETH or stETH on EigenLayer, without bridging it first.

2. Deposit your ETH on Renzo¹, without bridging it to another network first. That way, you avoid the additional risk of bridges, but still gain access to the Renzo and EigenLayer airdrops. Of course, the gas fees will be higher when interacting with Renzo.

   If you’re interested in this, follow the instructions in Option 2 for Renzo, but don’t bridge your assets first.

2 is more risky than one since you’re exposed to the additional smart contract risk on Renzo. However, you do qualify for an additional airdrop with #2.

Option 2: More Risky

There’s a lot of options that you could do here. You could go and deposit your LST into a DeFi liquidity pool. If you want to maintain exposure to staked ETH, you could deposit it as stETH/rETH and claim the extra 3-4%. I suggest Curve.

In all honestly, what I recommend is to hold most of your ETH as one of those two LSTs (stETH or rETH), but keep it out of liquidity farming. I don’t think the extra 3% justifies the additional risk you are taking, even with Curve. I would simply hold it in cold storage on ETH Mainnet.

But then, I would then take about 10-20% (ish – depending on risky you’re feeling) and airdrop farm with it.

If you want a very simple way to airdrop farm, here’s how. Essentially, we’re going to transfer our ETH to an L2 that will be having a future airdrop. The idea is that we will get some of that airdrop by bridging funds to the L2 and interacting with dapps within its ecosystem.

First things first, I recommend creating a different crypto wallet address (I use Metamask) and transferring all of your airdrop farming ETH to that wallet. You just want to be as careful as possible.

Then, add the L2 to your wallet. To add Scroll to Metamask, click here. To add Linea, click here.

Then…

A Simple Airdrop Farming Strategy For Your ETH

1. Choose one of these bridges to bridge your ETH over to an L2. The bridges I listed in this article will likely be having airdrops of their own. I suggest using Jumper and using the StarGate option.

2. Choose which L2 to transfer to. Personally, I would focus on Linea and Scroll. Both have raised huge amounts of money at staggering valuations and could have very lucrative airdrops. Airdrop farming is an endless rabbit hole, so this is my recommendation if you want to dip your toes into two potential valuable airdrops, but aren’t looking to throw on your Alice stockings and go diving.

   1. Transfer at least .01 ETH to both Linea and Scroll. The more the merrier as it will likely qualify you for more of the airdrop. I usually try to do .1 ETH if you can afford it.

3. Interact with dapps: Consistency is required for this step, since we want to make a couple transactions on each chain each month. I’ll try to send out monthly reminders to do this, so subscribe if you’d like those. We’re going to focus on two Dapps that will probably have airdrops of their own.

   1. SyncSwap: Head over to SyncSwap and swap some of your tokens for another token. If you’re on Scroll, I suggest swapping and making sure you’re holding either rETH or stETH. If you are on Linea, I suggest swapping for either ETH or wETH (relevant for the next step).

   2. Renzo (only for Linea): Next, assuming you’re on Linea, go to Renzo and stake your ETH or wETH. Renzo is a restaking protocol that uses EigenLayer. EigenLayer is a pretty sweet protocol that essentially allows other applications to leverage the value of staked ETH. This is an awesome ELI5 if you’re interested. I expect EigenLayer to have a massive airdrop as well. By staking here, you (probably) qualify for both the EigenLayer airdrop and the Renzo airdrop.

That’s it! That’s what we’ve got for you.

Recap

If you followed my advice, and did Option 1, you’ve taken on a bit more risk than doing nothing, but are now earning 3-4% yield on your ETH.

If you went a bit more degen and did Option 1.5, as well, you are now earning for EigenLayer and Renzo.

If you did Option 2, you’re hopefully going to qualify for both EigenLayer and Renzo, as well as Linea, Scroll, SyncSwap, and your bridge of choice. I recommend continuing to make semi-consistent transactions on these L2s in order to properly qualify for the airdrops (monthly is probably good enough). I plan to release monthly reminders.

If you want to farm other L2s, I would recommend following the same process as above. Bridge to your L2 and then stake on Renzo (not all L2s are compatible with Renzo). You can also subscribe for $22 a month to Bankless’ airdrop hunter² if you want to go really deep.

Thanks for reading. I hope this was helpful. Please leave me a comment or hit me up on AirChat or Twitter to discuss this article (I like AirChat the most!)

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As always, none of this is financial advice. I am not telling you to buy or sell anything, just sharing my underlying research and conclusions. 

I do hold a portfolio of cryptocurrencies. I was not paid by anyone to write this article.

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