A market intelligence agency reports that the aggregate quantity of Ethereum (ETH) staked has already quadrupled in the year before the much-expected combination of the major cryptocurrencies. As per cryptocurrency insights company Arcane Research, the total quantity of ETH staked has increased by more than 100 percent in the past year, from 6.5 million to 13.4 million, in spite of the main smart contract platform seeing a 51% price decline.
The change of ETH from a proof-of-work (PoW) system to a proof-of-stake (PoS) covenant would significantly affect the blockchain’s operation, since it will depend on verifiers instead of token miners to protect the blockchain network.
“Scheduled on September 15, the merging will fundamentally alter Ethereum’s economic structure. Rather than miners protecting the blockchain, validators will stake ETH, letting them to operate block-generating nodes and receive staking returns.”
Approximately 10% of Ethereum’s cumulative supply has been staked in expectation of the integration, according to statistics from Arcane Research. Following the unlocking of the option to withdraw staked Ethereum, the cryptocurrency intelligence business debunks the concern of a large dump of ETH. Presently, ETH tokens that have been staked cannot be transferred.
“The great bulk of ETH stays unstaked since staking is risky, although when withdrawals are enabled (planned for 2023, after the merging), yield play may be the smartest macro play…
At this point, staked ETH are frozen and cannot be taken for an undetermined amount of time. Unlike the’massive unlock dump FUD’ (fear, uncertainty, and doubt), however, the capacity to withdraw is a huge de-risking move that should result in a net rise in the demand for staking. Enhanced liquidity for staking positions — a greater propensity to stake.”
While preparing this report, Ethereum (ETH) was changing hands for $1,565.07 at time of writing, a loss of 1.80% in the past 24 hours.
