Decrease in Ethereum staking deposits attributed to Shapella upgrade and regulatory pressure.

2023-04-10

Summary:
  • On-chain analytics platform Glassnode reports that the amount of ETH being staked monthly has recently dipped.
  • The decline is attributed to increased regulatory pressure and the upcoming Shapella upgrade on April 12, which will enable the phased release of staked ETH on the Beacon Chain.
  • The SEC's crackdown on staking, despite there being no official legislation from Congress classifying ETH as a security, is cited as a cause of the dip in deposits.
  • Major centralized exchanges such as Coinbase, Binance, and Kraken have lost market share to the liquid staking platform Lido.
  • Lido currently accounts for almost a third of the total amount of ETH staked, equating to around $11 billion from 5.9 million ETH on the platform.
  • Lido takes a 10% commission and offers the potential of earning additional yields on DeFi platforms through its staking token Lido Staked ETH (stETH).
  • Analysts predict a boost for liquid staking platforms such as Lido after the Shapella upgrade releases ETH from the Beacon Chain.
  • According to the Ethereum metrics tracking platform Ultrasound.Money, there are currently 18.1 million ETH staked in total, valued at around $33.7 billion and representing 15% of the entire supply.


Full article:

The amount of ETH being staked monthly has recently dipped according to the on-chain analytics platform Glassnode.

Ethereum staking deposits have declined slightly in recent weeks due to increased regulatory pressure and the Shapella upgrade slated for April 12.

On April 9, on-chain analytics provider Glassnode reported on the current state of the Ethereum staking ecosystem.

The data revealed that deposit activities are currently low “due to regulatory pressure and the Shanghai upgrade.”

Financial regulators in the United States have been coming down hard on crypto this year. The Securities and Exchange Commission (SEC) is adamant that Ether (ETH) is a security and has cracked down on staking despite there being no official legislation from Congress classifying ETH as such.

The Ethereum network will undergo a long-awaited upgrade on April 12. The Shapella hard fork, also known as the Shanghai hard fork, will enable the phased release of ETH staked on the Beacon Chain.

These two factors have caused the dip in Ethereum staking deposits, according to Glassnode.

The firm also noted that major centralized exchanges such as Coinbase, Binance, and Kraken have lost a lot of market share to the liquid staking platform Lido.

“As the dust settled between the three giants, it was Lido who emerged victorious, continuing to dominate deposit inflows as of present,” it noted.

Lido currently accounts for almost a third of the total amount of ETH staked. This equates to around $11 billion from the 5.9 million ETH on the platform.

Centralized exchanges such as Coinbase take a hefty 25% commission from the staking rewards, with Coinbase’s commissions being even higher for other assets such as Cardano (ADA) and Solana (SOL).

Lido takes a 10% commission and offers the potential of earning additional yields on DeFi platforms through its staking token Lido Staked ETH (stETH). This explains the shift over time as savvy stakers switched to more profitable platforms.

Analysts have predicted that liquid staking platforms such as Lido will get a boost when ETH is released from the Beacon Chain after the Shapella upgrade.

Analysts debate the ETH price outcomes of Ethereum’s upcoming Shapella upgrade

According to the Ethereum metrics tracking platform Ultrasound.Money, there are currently 18.1 million ETH staked in total currently valued at around $33.7 billion and representing 15% of the entire supply.

After the Shapella upgrade, this will be slowly released for withdrawal in the weeks and months that follow.

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Source: cointelegraph.com

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