ETH Staking Deposits Report Sharp Increase, Outpace Withdrawals

With the Shanghai upgrade in the rearview mirror,  Ethereum staking numbers have reported a sharp increase, outpacing ETH withdrawals by $189 Million.

The numbers show that since the completion of the upgrade allowing stakers to withdraw their ETH, most users are eager to begin ETH staking.

Ethereum completed the Shapella upgrade on the 12th of April. Following the completion of the upgrade, Ethereum has seen 2.32 million ETH deposited, while 2.28 million ETH has been withdrawn. This means there is a positive net flow of around 32,000 ETH. In just the past 24 hours, investors have deposited 192,000 ETH while withdrawing only 29,000 ETH. This also marks the first time since Shapella that the cumulative amount of staked ETH has exceeded the total ETH withdrawn.

Additionally, there is also a significant uptick in the ETH burning rate. Over the past seven days, the network has seen 61,000 ETH burnt. This high burn rate can be primarily attributed to Uniswap, contributing to almost half of the ETH being burnt. ETH is the largest decentralized exchange by trading volume currently in operation. All of the data suggests that users are extremely bullish when it comes to staking with Ethereum. Analysts believe this is a good development for ETH. ETH being locked up for staking means there would be less ETH in the open market.

Looking at the breakdown of withdrawals, it is abundantly clear that centralized exchanges such as Binance, Conbase, and Kraken and driving them. According to data from Nansen, these exchanges are responsible for over 50% of withdrawals, totaling around 1.2 million ETH. In fact, Kraken alone has withdrawn about 609,410 ETH, while Binance and Coinbase have collectively withdrawn 624,650 ETH.

Other centralized exchanges that have made sizable ETH withdrawals include Gate.io, Huobi, and Gemini. Gate.io has withdrawn 36,560 ETH, while Huobi has removed 53,040 ETH. Meanwhile, Gemini has withdrawn 24,200 ETH. Even bankrupt crypto lender Celcius has withdrawn 6000 ETH. The data has also shown that Kraken staking customers in the United States have been almost completely removed from the staking system. This is because of regulatory action against Kraken by the United States Securities and Exchange Commission (SEC). Kraken eventually settled with the SEC after paying a $30 million fine and shuttering its staking operations in the United States in February.

Several entities are still waiting to withdraw their staked funds. Out of these, Coinbase is the largest, with around 55,000 ETH waiting to be withdrawn.

On the other hand, liquid staking protocols have made significant gains, with their total value locked (TVL) rising to over $16 billion. According to Nansen data, liquid staking protocols are responsible for most of the staked ETH. This category is dominated by Lido Finance, with its TVL rising by over 10% in the past month and going above the $12 billion mark. However, Lido’s growth rate is relatively tame compared to the growth of other protocols, such as Rocketpool and Frax Ether. Rocketpool has reported a growth of nearly 28%, while Frax Ether has reported an increase of almost 44%. This sees their TVL rise to $1.55 billion and $345 million, respectively.

Liquid staling refers to users depositing their ETH into a protocol which then stakes it on the users’ behalf. In return, the user receives a token representing their staked positions. In the case of Lido, the token is stETH. According to Nansen, Lido’s staked ETH takes up 79% of the total market. Next in line is Coinbase, with 15%.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.