Ethereum 2.0’s staking contract holds the largest number of Ethers, outstanding at 6.73 million or $21.5 billion.
This is undeniable. Staking is a success in the Ethereum ecosystem. Even if the blockchain has not yet switched to Proof-of-Stake, replacing Proof-of-Work, staking is already widely popular.
For the moment, this functionality is only available on Ethereum 2.0. It will only be definitively integrated into the blockchain once the two networks have merged. This should happen in the first half of 2022.
5.7% of Ether in staking
In the meantime, investors can use staking by depositing their Ether on the ETH 2.0 deposit contract. The tokens are then blocked until the two blockchains merge. However, this ‘inconvenience’ is not an obstacle.
According to the latest data from Nansen, the Eth 2.0 staking contract is now the largest holder of Ether. It now supplants the Wrapped Ethereum Protocol (wETH). As a result, 6.7 million Ether are now in staking.
At the current price, this is equivalent to almost 21.4 billion dollars. In addition, 5.7% of the Ether in circulation is therefore locked in staking. This is a factor that could contribute to the rise in the ETH price by reducing supply.
Especially since another lever is currently helping to drive the price of the second cryptocurrency. At $3153, Ether is benefiting from an update to the London hard fork. This reduces the cost of transactions by burning fees in the form of ETH tokens.
$20 Billion returns for staking in 2022
Traders see this as a way to reduce supply and therefore increase the value of the cryptocurrency. Ether’s price trajectory over the past few weeks seems to confirm this hypothesis.
But the staking figures also highlight the success of the switch to PoS. Remember that by depositing their tokens in this way, investors contribute to the functioning of the blockchain while receiving passive income.
And Ethereum is already establishing itself as one of the reference blockchains in the field of staking. ETH 2.0 is in third place in the hierarchy, behind Cardano ($49 billion) and Solana ($27.5 billion).
JPMorgan believes that staking is set to grow further and become an increasingly attractive source of revenue for institutional and retail investors. The bank estimates that staking token holders generate $9 billion in returns each year.
Thanks to Ethereum, staking returns would jump to $20 billion by 2022 and $40 billion by 2025. And compared to other investments, such as cash or treasury bonds, staking is definitely worthwhile, JPMorgan points out.
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