February 8, 2024 at 10:58 GMTModified date: February 8, 2024 at 10:59 GMT
February 8, 2024 at 10:58 GMT

Ethereum staking reaches new heights with 25% of supply now securing the network

The Ethereum network has reached a significant landmark, with a quarter of its circulating supply now committed to staking.

Ethereum staking reaches new heights with 25% of supply now securing the network

The Ethereum network has achieved a significant milestone, with 25% of its circulating supply now locked in staking.

This development has been reported by multiple analytics platforms like the liquid staking platform Lido. On 8 February, it shared the data that 25% of the entire supply of Ethereum has been staked.

The event marks a pivotal moment for Ethereum, reflecting growing investor confidence and a deepening commitment to the network’s security and future.

Increased staking activity 

The past two weeks have seen a noticeable uptick in Ethereum staking, indicating a rising interest among holders to participate in network security and earn staking rewards.

According to data from Dune Analytics, the total amount of Ethereum staked has surpassed 30 million $ETH, with Lido leading the charge in the market, holding a 31.5% share of the staked supply. 

This staking pool is valued at around $73 billion, supported by nearly a million validators, showcasing the vast scale and robustness of the Ethereum network.

Blockchain analytics firm Nansen has also confirmed the 30 million $ETH milestone. It pointed to an almost empty unstaking queue, which suggests that the majority of stakers are in it for the long haul.

According to Nansen, there’s only a small fraction, less than 0.6%, looking to withdraw their staked $ETH.

The Ethereum economy is also showing signs of deflation, a trend that has been more pronounced since the network’s transition to proof-of-stake with the Merge in September 2022. 

According to Ultrasound.Money, Ethereum’s supply has decreased by 344,960 $ETH due to burning mechanisms, translating to a deflation of nearly $840 million. 

This deflationary pressure is highlighted by a -0.57% annual inflation rate, with 4,288 $ETH burned in the last 24 hours alone.

Ethereum price trends

The Ethereum market has responded positively to these developments, with a 2.4% increase in price over the past day and a 6.3% rise over the week. 

The altcoin is currently changing hands for $2,422. However, it faces multiple resistance levels, with many around the $2,500 region. 

Ethereum also remains 50% below its all-time high from November 2021, when it went beyond $4,800. Nevertheless, the growing staking and restaking narratives provide a bullish outlook for the cryptocurrency.

Technical indicators emanated similar sentiments for the coin. The Relative Strength Index (RSI) was seen moving northbound, getting closer to the 70 mark. 

The Moving Average Convergence/Divergence (MACD) indicator went through a bullish crossover of lines, post which it showed green histograms on its chart. 

Restaking, which allows users to leverage the same $ETH for multiple staking opportunities, is also becoming increasingly popular. 

The emergence of a restaking token category, now valued at around $300 million, underscores the expanding interest in Ethereum’s staking ecosystem. 

There have been notable price increases in restaking tokens, such as Pendle Finance and Picasso, along with the success of platforms like EigenLayer.

With the staking and restaking narratives gaining momentum, Ethereum is poised for further growth and innovation, reinforcing its position as a leading blockchain platform.

The increasing popularity of staking and the deflationary trends within the Ethereum economy also suggest a maturing ecosystem that is attracting both investors and developers.