Ethereum Staking Surges to 24% of Total Supply

• According to a report by CryptoQuant, Ethereum staking has increased to 24% of the total supply. 

• The report also discloses that the total figure is currently around 29.02 million. 

Ethereum (ETH) is reported to be doing well in other metrics despite the negative growth of its price in the last couple of days. According to Ki Young Ju, the CEO of CryptoQuant, Ethereum locked-on staking protocols have surged to around 24 percent of the total supply. CryptoQuant data shows that the figure is currently around 29.02 million tokens. One interesting revelation is that only 11% of the total Ethereum tokens staked are on exchanges.

Ethereum has evolved over the years after embarking on one of the biggest upgrades in the ecosystem to transition from the Proof of Work (PoW) mechanism to the Proof-of-Stale (PoS). This was to improve its scalability while reducing its Carbon footprint. In this case, it resorted to the staking mechanism to validate transactions. In the early stage, stakers were not able to withdraw their asset until the Shapella Upgrade was executed on April 12, 2023. This upgrade was expected to come with a massive withdrawal of staked assets. It is important to note that the upgrade enables validators on the Ethereum blockchain to withdraw their initial staked principal while unlocking their rewards. 

Interestingly, the ETH lock-up kept increasing. According to analysts, locked-up Ethereum has increased over the years despite the price plummeting. Between March 29, 2022, to June 16, staked Ethereum increased from 9.56% to 11.38% despite the price falling from $3,401 to $1,067. 

More on the Staking and Other Metrics

According to reports, staking is very important as it secures the network. Stakers are incentivized to keep the system. With this, Ki Young Ju has disclosed that Ethereum stakers get 25 percent profit. The asset is currently trading at $2,474.02, more than the realized price for staking inflows, at $2,014. 

The asset has a neutral market sentiment with a score of 52/100. In the last 24 hours, Ethereum has surged by 2.7%. Also, it has a weekly surge of 4.9%. 

ETH is undervalued. Undervalued only if it would successfully launch $ETH 2.0. PoS believers expect it goes higher than $2k. As of today, 10% of the supply is locked in the ETH 2.0 deposit contract. And the stakers’ entry price is now $2,375, -50% from the current price.

The profitability in Ethereum staking is said to be due to the recent surge of the ETH price from $1,891.95. 

According to ETC Group Head of Research André Dragosch, Ethereum could outperform Bitcoin this year. He also admitted that the asset underperformed Bitcoin in the previous year. To him, the deflationary “burn mechanism” introduced in Proposal EIP-1559 in August 2021 could be a huge factor in the expected run. 

Coinbase’s Crypto Market Outlook has also disclosed that the performance of Bitcoin compared to that of Ethereum would go through mean reversion in 2024. 

Total transaction revenues on Ethereum year to date, up to the end of November, declined by 29% compared to the same 11-month period in 2022, an inconsistency in on-chain activity that is also making monthly ether supply deflation inconsistent.

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