Staking Ethereum Reaching 10% of Circulating Supply

The amount of Ethereum staked on the beacon chain has reached yet another milestone despite the sharp drop in asset prices today.

According to Ethereum Launchpad, there are currently over 12 million ETH staked on the Beacon Chain. dashboard. Additionally, CoinMarketCap is currently reporting a circulating supply of just over 120 million ETH. This means that 10% of the total Ethereum has been staked.

The actual number reported is 12,341,535 ETH at the time of publication, which is worth around $34 billion at current prices.

The staking reward is a return of around 4.4% per year. This is far less than the double-digit returns enjoyed by early Ethereum stakers, but far more than any high-street bank currently offers for inflationary fiat accounts.

Concerns about liquidation of staked Ethereum

As Ethereum is freed for withdrawals, there are concerns that a ‘Merge’ will lead to an exit from staking. This could result in a significant amount of assets being sold to the market if stakers are forced to liquidate their assets, putting downward pressure on ETH prices.

When staking started with the launch of the Phase 0 Beacon Chain in early December 2020, ETH was only priced at $600. Despite the current market downturn, the asset has still risen 357% since then.

However, avid enthusiasts of the ecosystem, along with venture capital firms, are unlikely to go public and sell ETH. In addition, in February, Ethhub founder Anthony Sassano said:

“Withdrawals are not active until at least 6 months after the merger, after which I think the maximum amount is around 30k per day.”

Merge will also guide you through a proof-of-stake consensus that ends Ethereum mining. This is optimistic for two reasons. First, the asset will be more environmentally sustainable by reducing energy use by more than 99%. As a result, companies and legislators will see Ethereum from a better perspective.

Second, the issuance can become deflationary as more ETH is burned than is generated by the upgrade introduced with EIP-1559.

According to ultrasound.don tracker, 2.27 million ETH have been burned so far, which is estimated at $6.25 billion. The tracker predicts that Ethereum supply will decline by 2.1% per year at the current burn rate after the merger later this year.

ETH price drop

Unfortunately for investors, none of these bullish indicators affected the price action this week. ETH fell to $2,747 at the time of writing, down 6.6% for the day. coin gecko.

The asset is down nearly 20% over the past month and is heading towards the support levels found in January and March from around $2,500.


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