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Ethereum Staking Surges Amid Shapella Upgrade

Explore the significant growth in Ethereum staking post-Shapella upgrade and its impact on cryptocurrency markets.
Published on 2024-01-20

Ethereum Staking Ratio Climbs

Ethereum (ETH) staking has experienced a notable increase, with the staking ratio reaching 24%. This growth indicates a strong interest in Ethereum staking despite earlier concerns about the Shapella upgrade. Contrary to expectations, the activation of Shapella in April 2023, which allowed stakers to withdraw their coins, did not lead to mass unstaking or sell-offs, even amid a bearish market sentiment.

Shapella Upgrade Impact

The Shapella upgrade, initially expected to cause significant withdrawals and possible price drops, has not adversely affected Ethereum's price. In the week following the upgrade, stakers withdrew 1 million ETH, yet the price remained stable between $2,000 and $2,100. This stability suggests confidence in Ethereum's long-term value.

Profitability of Staked Ethereum

Staked Ethereum is proving to be profitable. The realized price for staking inflows stands at $2,014, while the current ETH rate is $2,519, resulting in an average 25% profit. The Ethereum staking ecosystem is valued at approximately $72 billion, with an annual percentage yield (APY) of 4.25%.

Competition Among Altcoins

While Ethereum maintains a strong staking ecosystem, its competitors are experiencing shifts. Solana (SOL) has seen its staking ratio decline by over 20%, dropping below 67%. Meanwhile, Cardano (ADA) is closing the gap, with its staking ratio nearing 64%. Although Solana's staking volume in USD terms is significantly larger than Cardano's, the latter is showing steady growth.

Leading Staking Ratios

Among altcoins, Mina Protocol (MINA) leads with a staking ratio of over 91%. Aptos (APT) and Sui (SUI) also show high staking ratios, ranging from 85% to 86%. These figures highlight the ongoing competition in the cryptocurrency staking space and the varied strategies employed by different networks.

By understanding these dynamics, investors can better navigate the evolving landscape of cryptocurrency staking and make informed decisions.

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