Ethereum Staked Hits 25% of Total Supply: What This Means for ETH Prices

• Ethereum staking hits the 25% milestone with $73 billion value, marking a significant endorsement of its Proof-of-Stake consensus algorithm.

• Lido Finance dominates Ethereum staking with 31.52% of all staked ETH, followed by Coinbase while restaking trends indicate growing interest and flexibility in the ecosystem.

Ethereum, the second-largest cryptocurrency by market capitalization, has achieved a significant milestone in its staking ecosystem. Approximately 25% of the circulating supply, equivalent to 30 million ETH, is now actively staked on the network, signaling a robust endorsement of its Proof-of-Stake (PoS) consensus algorithm. This marks a noteworthy milestone in cryptocurrency staking, signaling increased interest and participation in securing the Ethereum network.

25% of the ETH supply is now staked pic.twitter.com/YcZrE1ZOhV

— Lido (@LidoFinance) February 7, 2024

The report,  from the blockchain analytics company Nansen, emphasizes the growing trend of people locking up their digital assets to support the blockchain network by highlighting a significant growth in staked Ethereum. Staking, a process where users commit their coins to specific blockchain addresses, has become a pivotal element in the Ethereum ecosystem, allowing participants to earn token rewards in return for their contributions.

Last year, Ethereum underwent a crucial network upgrade, enabling users to withdraw staked ETH easily. Staking activity increased as a result of the emergence of liquid staking protocols, which made it easier to lock and withdraw cryptocurrency assets. This update made Ethereum staking more user-friendly and accessible, which was crucial to the current upsurge.

Platform Dominance in Staking

Lido Finance is the most popular platform allowing users to stake Ethereum, holding 31.52% of all staked ETH. With 14.4% of the total ETH staked, Coinbase is next in line. Notably, Coinbase and Lido have 45% of the market for staked Ethereum, demonstrating their dominance in the Ethereum staking market. Binance, Kiln, Figment, and Rocket Pool are also noteworthy participants in the staked ETH market share.

Notwithstanding the difficulties and disputes related to staking, the Ethereum market has reacted favorably to the latest advancements. The price of Ethereum has increased by 2.6% on the last day and 6.8% on the last week. Staker profits have been enormous; the top three earners are Lido stakers with approximately 467,000 ETH, Coinbase (259,000 ETH), and Binance (139,000 ETH).

The growing popularity of restaking in the Eth staking environment is an interesting development. This approach gives customers additional flexibility in their staking methods by enabling them to stake the same Ethereum across several protocols. The rising popularity of restaking is reflected in CoinGecko’s launch of a restaking token category, which is presently valued at over $300 million.

Ethereum ETF Proposals Incorporate Staking

As Ethereum enthusiasts eagerly anticipate the approval of an exchange-traded fund (ETF), recent developments reveal a strategic inclusion of staking in ETF proposals.  Investment firm Ark 21Shares mentions staking techniques in an update to their spot ETH ETF S-1. 

Recent fines levied by the U.S. Securities and Exchange Commission (SEC) on significant cryptocurrency companies indicate both the growing recognition of staking in mainstream financial debates and the regulatory issues that may arise.

The Ethereum network is on the cusp of another crucial upgrade known as Dencun, which has recently become active on the Sepolia testnet. This upgrade introduces “proto-danksharding” to the proof-of-stake blockchain, aiming to address the long-standing scalability issues faced by the Ethereum network. Developers claim that Dencun could potentially enable the network to process over 100,000 transactions per second, providing a solution to the network’s sluggish performance.

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