Ethereum Staking Soars to 24% of Total Supply, Defying Post-Upgrade Unstaking Predictions

Ethereum staking defies expectations, reaching an impressive 24% of the total supply.
Staking resilience showcased post-Shapella Upgrade, with a growing commitment to decentralized staking methods.

In a surprising development within the Ethereum ecosystem, the amount of Ethereum (ETH) staked has achieved a remarkable milestone, reaching 24% of the total supply. This substantial increase defies earlier predictions of a significant unstaking trend following the Shapella Upgrade.

Ethereum, transitioning from a Proof of Work (PoW) to a Proof of Stake (PoS) model with The Merge event, aimed to enhance scalability and reduce the network’s carbon footprint. The Shapella Upgrade on April 12, 2023, addressed initial limitations on asset withdrawals for stakers. Expectations of a surge in unstaking activities post-upgrade were prevalent, but data insights shared by CryptoQuant reveal an ongoing rise in the staking rate.

$ETH staking now at 24% of total supply, with only 11% on exchanges.

Tbh, I expected significant unstaking activities after the Shapella upgrade, but the staking rate is still increasing.https://t.co/igWBQsJW8e pic.twitter.com/w8VoBV54PW

— Ki Young Ju (@ki_young_ju) January 18, 2024

As of now, 29.02 million Ethereum tokens are staked, showcasing a significant commitment to the network’s security and future growth. Notably, only 11% of these staked tokens are held on exchanges, highlighting a strong preference for decentralized staking methods among participants.

Resilience Amid Market Fluctuations

Ethereum’s staking mechanism has displayed resilience even during market downturns. Between March 29, 2022, and June 16, 2022, despite a substantial drop in Ethereum’s price from $3,401 to $1,067, the percentage of staked Ethereum increased from 9.56% to 11.38%. This trend suggests growing confidence in Ethereum’s long-term potential, irrespective of short-term market volatility.

Profitability in Ethereum Staking

Staking Ethereum not only contributes to network security but also offers financial incentives. Currently, stakers are enjoying a 25% profit, with Ethereum’s price at $2,519, surpassing the realized price for staking inflows at $2,014. This profitability contributes significantly to the rising staking rates, providing an attractive return on investment for those securing the network.

In summary, Ethereum’s staking landscape is witnessing robust growth and resilience, reflecting the ongoing evolution of the network. The sustained commitment to staking and the confidence of participants in Ethereum’s future prospects are evident, underscoring the network’s appeal to long-term investors.