The amount of Ethereum being staked has been steadily increasing, with large amounts of capital being locked up to earn 4 to 5% yields in ETH, which are virtually risk-free. These yields are paid from transaction fees, rather than from new issuances of ETH, preventing the dilutio...
The amount of Ethereum being staked has been steadily increasing, with large amounts of capital being locked up to earn 4 to 5% yields in ETH, which are virtually risk-free.
These yields are paid from transaction fees, rather than from new issuances of ETH, preventing the dilution of ETH. This trend of ETH staking growth has potential implications for the cryptocurrency ecosystem and its users.
Record-breaking inflows and institutional staking
Ethereum’s Shanghai upgrade, also known as Shapella, brought a record-breaking weekly inflow of Ethereum (ETH) deposits for staking. Investors deposited around 571,950 ETH tokens into staking contracts, worth over $1 billion, according to Dune Analytics data.
This marked the largest weekly token inflow in ether staking’s nearly two-and-a-half-year history. The top five institutional-grade staking service providers, including Bitcoin Suisse, Figment, Kiln, Staked.us, and Stakefish, staked a combined total of 235,330 ETH, worth around $450 million, since the Shanghai upgrade went live.
Binance introduces Wrapped Beacon Ethereum (WBETH)
To provide users with more flexibility in using their staked ETH in DeFi protocols, Binance introduced a new token called Wrapped Beacon ETH (WBETH).
The WBETH service allows users to wrap their BETH into the new tokens at an initial conversion rate of 1:1, though this rate may change. By using WBETH, users can do more with their staked ETH while still receiving rewards.
Although currently only Ethereum and BNB Smart Chain are supported, Binance plans to support more networks in the future.
Following the Shapella upgrade, liquid staking of ETH remains strong, with Lido dominating the niche, holding 74.2% of the total share and over 6.1 million ETH staked.
Coinbase’s liquid ETH staking comes second with approximately 1.1 million staked ETH, amounting to 13.84% of the market share.
The rise in ETH staking indicates increased confidence in Ethereum’s long-term prospects and an appetite for earning passive income through virtually risk-free yields.
As the Ethereum ecosystem continues to evolve and mature, the growth in staking activity may contribute to further network stability and development.