Recently, since the implementation of the Shanghai upgrade on the Ethereum mainnet, demand for ETH staking has skyrocketed. The waiting period for new validators to join the Ethereum network rapidly increased to 27 days and 7 hours, with 50,398 prospective members in the queue. ETH staking offers potential investors around 4-5% yield annually via token staking. The addition of withdrawal flexibility to ETH staking encouraged investors, who may have previously been hesitate as a result of the prolonged lock up period prior to the latest upgrade.

As of Monday, the total amount of staked ETH tokens has increased to 21.652 million, signifying a 3.5 million difference one month since the Shanghai upgrade launch. Taking into account the current ETH token supply of 120.08 million, the staking participation rate is currently at 18%. Cardano, a competitor proof-of-stake chain also with withdrawal flexibility, boasts a staking ratio of 60-70%. Even though only 50,000 ETH can be withdrawn from the staking contract at a single time, Ether staking isn’t completely unreliable and could soon reach a 50% participation ratio. Such a result would draw in a further 38.4 million ETH tokens from the Ether staking contract.

On the other side of the equation, ETH token supply destined to be burned is rapidly increasing. This is due to the recently- arisen surge in transaction fees, with the Ethereum network burning all ETH tokens used to pay fees according to EIP1559 from August 2021. This has ultimately led to Ether’s deflation rate soaring higher than 8% earlier this month. Subsequently, this development should act as a positive boost for the ETH market price in the long-term.



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