Earning Interest on Ethereum: Alternatives to ETH Staking

For some Ethereum holders staking appears as the only way to generate yield from ETH. In reality, staking is not always the most flexible option. Lock-ups, validator exposure, and operational complexity make staking unsuitable for many users, especially those who value liquidity or simpler risk profiles.

Clapp Flexible Savings offers a clear alternative to ETH staking. Instead of bonding ETH to validators, it allows users to earn interest on their ETH holdings through a flexible savings model. Funds remain liquid, interest accrues daily, and withdrawals are available at any time—without lock-ups or staking mechanics.

How ETH Staking Works

ETH staking generates rewards by securing the Ethereum network. Your capital is bonded to validators, and returns depend on network conditions, validator performance, and protocol rules.

Interest-based yield works differently. ETH is used as a financial asset rather than a security instrument. 

Yield comes from lending, treasury management, or structured financial strategies, not block validation. The result is a more familiar savings-style model, with clearer access terms and fewer technical dependencies.

Common drawbacks of ETH staking

Staking introduces several constraints that are often overlooked:

• Capital lock-up or delayed withdrawals

• Slashing and validator risk

• Yield variability tied to network activity

• Limited flexibility during market volatility

These factors make staking less suitable for users who want to actively manage exposure or keep funds readily accessible.

Flexible savings as a practical alternative

One example of the interest-based model is Clapp Flexible Savings, which offers 4.2% APY on ETH without staking, lock-ups, or DeFi interaction.

Interest accrues daily, funds remain liquid, and rates are clearly displayed in the app. ETH is not bonded to validators, meaning users can withdraw or rebalance at any time without penalties. From a user perspective, this functions closer to a savings account than a staking product.

Clapp also extends this model to stablecoins and EUR, offering 5.2% APY, with EUR deposits supported via SEPA Instant. The platform operates as a registered VASP in the Czech Republic and uses Fireblocks for institutional-grade custody.

Choosing the right ETH yield strategy

The choice between staking and interest depends on priorities:

• Staking suits long-term holders comfortable with lock-ups and network-level risk.

• Interest-based ETH savings suit users who want yield with liquidity, simpler mechanics, and predictable access.

Neither model is inherently superior. They serve different risk profiles and usage patterns.

ETH Staking vs Interest-Based ETH Savings

Feature

ETH Staking

Clapp Flexible Savings

Yield type

Protocol rewards

Interest on ETH

Typical APY

~3–4% (variable)

4.2% APY (fixed)

Lock-up

Yes (bonded or delayed withdrawals)

No lock-ups

Liquidity

Limited

Full, instant access

Slashing risk

Yes

No

Validator exposure

Yes

No

Complexity

Technical setup or delegation

App-based, no setup

Yield accrual

Epoch-based

Daily

Capital flexibility

Low

High

Suitable for

Long-term passive holders

Users who value liquidity

Final thoughts

Earning yield on Ethereum does not always require staking. For many users, earning interest on ETH provides a cleaner, more flexible approach when liquidity, simplicity, and capital control matter more than maximizing protocol-native rewards.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.