Bitrabo Editorial
While Ethereum enthusiasts seem to be facing a tough time gaining traction, recent on-chain activity reveals some noteworthy trends. Currently, ETH is valued at over $2,400, although persistent sellers are limiting its upward movement. Data from IntoTheBlock indicates that nearly 30% of all circulating ETH has now been staked.
Staking Surges: 34.4 Million ETH Locked in 9 Months
As of October 8, analysts from IntoTheBlock report that a substantial 28.9% of all ETH is staked. This marks a notable increase from the 23.8% registered in January 2024, showcasing a growing commitment from holders. Out of this, over 15.3% of ETH has been staked for more than three years.
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Ethereum shifted from a proof-of-work to a proof-of-stake system in September 2022, aligning itself with platforms like Cardano. This change eliminated the need for energy-hungry miners, replacing them with validators.
Additional statistics from Ethereum reveal that over 1 million validators have collectively staked more than 34.4 million ETH. Each validator benefits from an annual percentage rate (APR) of 3.3%, although this non-compounding yield can vary based on the total amount staked.
Validators must lock in a minimum of 32 ETH and maintain a node that supports continuous network operations. Failure to comply with these requirements, particularly in cases of collusion or malicious behavior, can lead to penalties.
The increase in validators, despite Ethereum’s price decline from around $4,100 in Q1 2024 to as low as $2,100 in early August, underscores the platform’s long-term appeal. Currently, Ethereum holds the title of the second-largest blockchain, trailing only Bitcoin, and is the only crypto project besides Bitcoin to receive a spot ETF nod from the U.S. SEC. Yet, ETH is still feeling pressure, trading below $2,800, which dampens optimism.
EIP 7781: Aiming for Enhanced Ethereum Scalability
In addition, Ethereum developers are actively working on improvements, seeking to enhance both user experience and scalability. Following the Dencun upgrade in March 2024, a new Ethereum Improvement Proposal (EIP) 7781 has been introduced.
This proposal aims to boost Ethereum’s processing efficiency by decreasing slot times and increasing blob capacity. The objective is to lower the slot time from about 12 seconds to 8 seconds, potentially raising transaction throughput by over 30%.
If enacted, this change would particularly benefit decentralized exchanges like Curve and Uniswap. Importantly, higher throughput would lead to reduced costs for mainnet transactions. However, solo stakers will need to invest in new equipment and enhance their internet connections to accommodate these changes.