In a significant development for the Ethereum ecosystem, the staking address now contains over 50% of the total Ether supply, marking an unprecedented milestone in the cryptocurrency”s eleven-year history. This observation was reported by on-chain analytics firm Santiment, which noted this surge in staking activity despite the price of ETH experiencing a downturn.
Currently, approximately 37 million ETH is staked, which corresponds to about 30% of the total supply of 121.4 million tokens. However, the figure cited by Santiment reflects a nuanced understanding of the dynamics at play, as the staking address functions as a “one-way vault.” This mechanism temporarily locks ETH to bolster network security, leading to a perception that the staking contract holds a larger share of the overall supply.
When validators exit and withdraw their staked Ether, the tokens are reintroduced into circulation as newly minted coins on the Ethereum main network, rather than being retrieved directly from the vault. Consequently, the vault accumulates Ether over time, distorting the apparent percentage of the total supply it represents. The current calculation indicates that 50.18% of the historical ETH issuance, prior to any burns, is now held in staking.
Moreover, this trend of increasing staking demand is likely to continue, particularly during bear markets when trading conditions are less favorable. Santiment also highlighted that the validator entry queue is near record levels, with approximately 3.9 million ETH awaiting staking, resulting in an average waiting time of around 67 days. In contrast, the exit queue has hit its lowest level ever, with only about 11,500 ETH awaiting withdrawal and a wait time of less than five hours.
Amidst these developments, the price of Ether has dipped below $2,000, attributed to panic selling among retail investors. This downturn saw ETH briefly touch the $2,000 psychological threshold before facing resistance, ultimately settling at around $1,970 during trading sessions in Asia. Analyst Merlijn The Trader remarked that while Ethereum”s current price may seem low, it is more a matter of market sentiment, describing the situation as “boring,” where “boring is where positions are built.”
The increasing percentage of ETH supply staked and the dynamics of the staking mechanism highlight a growing confidence in Ethereum”s proof-of-stake model, even as market prices fluctuate.
