Ethereum Staking Reaches Record 24% with Nearly 30 Million ETH Locked Up
Date: 2024-01-20 Author: Dima Zakharov Categories: BLOCKCHAIN
Ethereum Holders Favor Staking
The ability to withdraw ETH from staking was one of the most anticipated features implemented in the Shapella upgrade. This change allowed validators and stakers to withdraw their ETH from the network along with their earned rewards.
Previously, the Ethereum 2.0 Beacon Chain did not support a withdrawal mechanism, making it impossible to retrieve coins once placed there.
CryptoQuant's CEO, Ki Young Ju, recently commented on the functionality that added liquidity and flexibility for ETH holders and stakers. He noted, "I thought there would be an outflow of coins from staking after Shapella, but no: the percentage of locked ETH continues to grow."
Despite the new feature allowing stakers to withdraw tokens, the capitalization of locked ETH has grown to $72.75 billion. Currently, 28.8 million tokens are staked, representing 24% of the total supply. Furthermore, there are 898,110 active validators on the network.
What Is Cryptocurrency Staking and How to Earn from It – A BeInCrypto Guide
These data points indicate that users trust the Proof-of-Stake mechanism implemented on the Ethereum network.
Amount of ETH in Staking. Source: CryptoQuant
TIE data shows that Ethereum has managed to maintain a negative inflation rate of 0.03%. The reward percentage stands at 4.23%. This unique combination of a deflationary trend and attractive rewards sets Ethereum apart from its competitors.
Moreover, there is a significant discrepancy between the price of ETH staked ($2,014) and the current market price (around $2,519). This difference provides stakers with an additional 25% profit. Such profitability reflects bullish sentiment among Ethereum investors.
Price of Staked Ethereum. Source: CryptoQuant
Investors are reluctant to sell ETH on exchanges; instead, they want to hold it and earn through staking, demonstrating confidence in Ethereum's long-term value.
Earlier, Vitalik Buterin shared his opinion that the staking mechanism on the Ethereum network should be simplified.
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