Ethereum staking hits all-time high with almost 30% of ETH supply locked

Ethereum has reached a monumental milestone, with nearly 36 million ETH—representing almost 30% of the total circulating supply—now locked in staking contracts. This all-time high (ATH) signifies robust validator confidence and the rapid maturation of the network following its transition to a Proof-of-Stake (PoS) consensus mechanism.

The massive inflow of staked ETH confirms the success of ‘The Merge’ in late 2022 and the subsequent ‘Shanghai’ upgrade in April 2023, which enabled stakers to withdraw their funds. The ability to exit staking positions drastically reduced liquidity and counterparty risk, encouraging significantly greater participation from both retail investors and major financial institutions.

Currently, the staked ETH is used to secure the network, validate transactions, and govern the protocol, earning stakers an Annual Percentage Rate (APR) that typically hovers between 3% and 4.5%. This reliable yield, coupled with the underlying asset’s status as a critical decentralized technology, makes staking an increasingly attractive strategy for passive income generation.

Liquid staking protocols continue to drive much of this growth, with Lido Finance maintaining its position as the dominant force, controlling a substantial share of the staked assets. While centralized exchanges like Coinbase and Kraken also hold significant portions, the increasing concentration of stake ownership remains a key point of ongoing discussion regarding network decentralization and security.

The economic implications of this record high are profound. By removing nearly one-third of the total ETH supply from immediate circulation, staking effectively introduces significant deflationary pressure on the asset. This scarcity reinforces Ethereum’s narrative as ‘ultrasound money’ and contributes to long-term price support.

Source: Ethereum staking hits all-time high with almost 30% of ETH supply locked