A Quarter of Ethereum Supply Staked: Nansen Data
Data from blockchain analytics firm Nansen reveals that approximately 30 million ETH, equivalent to around $74 billion, is currently being staked. Staking involves locking up digital coins or tokens to support the operation of a blockchain network. Ethereum, which utilizes a proof-of-stake consensus mechanism, requires users to pledge their coins to the network and in return, they earn token rewards. Last year, the Ethereum network was upgraded to allow for easy withdrawal of staked ETH, leading to the rise of liquid staking protocols that enable seamless locking and withdrawal of crypto.
ETH ETF Proposals Include Staking
As the crypto community anticipates the approval of an Ethereum exchange-traded fund (ETF), proposals from applicants now include mentions of staking. Ark 21Shares, an investment firm, recently amended its spot ETH ETF S-1 filing to incorporate staking as part of its operations. However, staking has faced regulatory scrutiny, with the U.S. Securities and Exchange Commission imposing fines on major crypto companies for allegedly selling unregistered securities through staking services.
Ethereum’s Dencun Upgrade Addresses Scalability
The Ethereum network is undergoing an upgrade known as Dencun. Recently finalized on a testnet, it is expected to go live on the mainnet by March 13. Developers claim that Dencun will resolve scalability issues faced by Ethereum by significantly increasing transaction processing capacity. With the upgrade, Ethereum aims to handle over 100,000 transactions per second in the future.
Hot Take: Staking Dominates Ethereum Network as ETF Applicants Embrace It
Ethereum’s staking activity continues to grow, with a significant portion of ETH supply being locked up in support of the network. As investors eagerly await the approval of an ETH ETF, staking has become a prominent aspect of ETF proposals. However, staking has also attracted regulatory attention, leading to fines for some crypto companies. Meanwhile, Ethereum’s ongoing Dencun upgrade aims to address scalability concerns and enable the network to process a higher volume of transactions per second. These developments highlight the increasing significance of staking and upgrades in shaping Ethereum’s future.
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