So, I get Ethereum (ETH).

Imagine you have a special kind of digital money called Ethereum, or ETH. It’s not like the paper money you have in your wallet; it’s all on the internet.

To keep this money safe, you need people to help out (guard it so to speak).

This is how “staking” is done for ETH.

Think of it like putting your money into a special, locked vault. By doing this, you’re helping to run the system, and in return, you get paid a little extra ETH as a reward. So instead of mining your coins using insurmountable GPUs while maxing out your electricity bills, your friendly neighborhood ‘economics’ is here to give you more coins for your long-term trust in the system.

So, what does this have to do with the price of ETH?

1. Supply and Demand: When you put your ETH into that locked vault, you can’t spend it. This means there’s less ETH floating around for other people to buy. Just like with anything else, when something is harder to find, its price usually goes up. The more people that “stake” their ETH, the less there is to go around, which helps the price.

2. It’s an Investment: Staking also gives people a reason to hold ETH for the long term. Instead of selling it, they can put it in the “vault” and earn a little extra, like interest. This makes them less likely to sell, which also helps keep the price from dropping.

In short, the more people flock to the Ethereum network by staking their ETH, the better the price.

It’s a way for everyone to work together to make the digital money more valuable and more secure for the long run.