HomeNewsEthereum Locks in 29 Million Tokens in Staking Protocols Post-Shapella Upgrade

Ethereum Locks in 29 Million Tokens in Staking Protocols Post-Shapella Upgrade

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  • 24% of Ethereum’s total supply, amounting to 29.02 million tokens, is now staked in smart contracts, surpassing expectations post-Shapella Upgrade.
  • Despite the price fluctuations, Ethereum stakers enjoy a 25% profit, with the current price of Ethereum at $2,519, exceeding the realized staking price of $2,014.

In a notable shift in the Ethereum ecosystem, the amount of Ethereum (ETH) staked has reached an impressive 24% of the total supply, defying the expectations of significant unstaking post the Shapella Upgrade.

Ethereum’s Staking Evolution

Ethereum, initially a Proof of Work (PoW) blockchain, transitioned to a Proof of Stake (PoS) model with The Merge event. This pivot aimed to reduce the network’s carbon footprint and enhance scalability. Following The Merge, stakers were initially unable to withdraw their assets, a limitation that was addressed with the Shapella Upgrade introduced on April 12, 2023. The upgrade facilitated the withdrawal of staked Ethereum, leading many, including Ki Young Ju, CEO of CryptoQuant, to anticipate a spike in unstaking activities. Contrary to these expectations, the staking rate has continued to rise.

Data insights shared by CryptoQuant show that 29.02 million Ethereum tokens are now locked in staking protocols, representing a substantial commitment to the network’s security and future growth. Interestingly, only 11% of these staked tokens are held on exchanges, indicating a strong preference for decentralized staking methods.

Staking Resilience Amid Market Fluctuations

The resilience of Ethereum’s staking mechanism is further highlighted by its performance during market downturns. For example, between March 29, 2022, and June 16, 2022, Ethereum‘s price dropped significantly from $3,401 to $1,067. Despite this price decline, the percentage of staked Ethereum grew from 9.56% to 11.38%. This trend suggests a growing confidence in Ethereum’s long-term potential, regardless of short-term market volatility.

The Profitability of Ethereum Staking

Staking Ethereum not only contributes to the network’s security but also offers financial incentives to participants. According to Ki Young Ju, stakers are currently realizing a 25% profit, with Ethereum‘s price now standing at $2,519, which is higher than the realized price for staking inflows at $2,014. This profitability is a significant factor in the increasing staking rates, as it presents an attractive return on investment for those securing the network.

Ethereum’s market capitalization and trading volume have also seen fluctuations, with the market cap slightly down and trading volume decreasing. However, the sustained growth in staking activity underscores the robustness of the Ethereum ecosystem and its appeal to long-term investors.

In summary, Ethereum‘s staking landscape is exhibiting strong growth and resilience, reflecting the network’s ongoing evolution and the confidence of its participants in its future prospects.

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Bhushan Akolkar
Bhushan Akolkar
Bhushan is a FinTech enthusiast and possesses a strong aptitude for understanding financial markets. His interest in economics and finance has drawn his attention to the emerging Blockchain Technology and Cryptocurrency markets. He holds a Bachelor of Technology in Electrical, Electronics, and Communications Engineering. He is continually engaged in a learning process, keeping himself motivated by sharing his acquired knowledge. In his free time, he enjoys reading thriller fiction novels and occasionally explores his culinary skills. Business Email: info@ethnews.com Phone: +49 160 92211628