A quarter of all Ethereum (ETH) in supply is now being staked, data shows. According to figures from blockchain data firm Nansen, over 30 million ETH—or about $74 billion worth of the cryptocurrency—has been locked up.
Staking is the process of “locking up” digital coins or tokens to help keep a blockchain network running. Proof-of-stake assets like ETH require users to pledge their coins to the network by sending it to a specific blockchain address. Those who stake earn token rewards in the process.
Last year, the Ethereum network was upgraded, allowing users to easily withdraw staked ETH. Since then, liquid staking protocols have boomed—allowing users to seamlessly lock up and withdraw their crypto.
As ETH enthusiasts eagerly await the approval of an exchange-traded fund (ETF) that brings the second-largest digital asset to Wall Street, applicants are talking about staking in their proposals. Yesterday, investment firm Ark 21Shares amended their spot ETH ETF S-1 to mention the practice.
“The sponsor may, from time to time, stake a portion of the trust’s assets through one or more trusted staking providers,” the filing read.
Staking is controversial with regulators, though: The U.S. Securities and Exchange Commission has fined major crypto companies—such as digital asset exchanges Kraken and Coinbase—for allegedly selling unregistered securities via staking services.
The Ethereum network is in the process of an upgrade, too. Developers this week finalized the Dencun upgrade on a testnet. It is now expected to go live on the mainnet by March 13.
Developers claim that Dencun will solve the scalability problem of the network behind the world’s second-biggest cryptocurrency—which is slow and expensive—so that it will potentially be able to process over 100,000 transactions per second in the future.
Edited by Andrew Hayward
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Source: https://decrypt.co/216568/ethereum-staking-booms-25-percent-locked
