Ethereum’s Staked Supply Has Reached 10% of Total Supply

Despite today’s drop in asset values, the number of Ethereum staked on the Beacon Chain has hit another milestone.

According to the Ethereum Launchpad dashboard, the Beacon Chain now has over 12 million ETH staked. Furthermore, CoinMarketCap now reports a circulating supply of little more than 120 million ETH, implying that 10% of all Ethereum has been staked.

At the time of publication, the total amount reported was 12,347,203 ETH, which is worth almost $34 billion at current pricing.

The annual percentage yield on staking is approximately 4.4 percent. While this is a long way from the double-digit returns enjoyed by early Ethereum investors, it is far more than any high-street bank is now offering on inflating fiat accounts.

There are fears that ‘the Merge’ may result in a staking exodus when Ethereum becomes available for withdrawals. If stakers need to sell the asset, a significant portion of it could be sold to market, putting downward pressure on ETH prices.

ETH was just $600 when staking commenced with the Phase 0 Beacon Chain launch in early December 2020. Despite the current market downturn, the asset has gained 357% since that time.

However, passionate believers of the ecosystem, as well as venture capital firms, are very unlikely to sell their ETH. Additionally, Ethhub founder Anthony Sassano stated in February:

“Withdrawals won’t be enabled until at least 6 months after The Merge and then I believe the maximum is around 30k a day.”

Proof-of-stake consensus will be implemented as part of the Merge, effectively ending Ethereum mining. This is positive for two reasons: first, the asset will become more environmentally sustainable, since its energy consumption would have decreased by over 99%. As a result, businesses and governments will see Ethereum in a more favorable light.

Second, the issuance may become deflationary as the update introduced with EIP-1559 burns more ETH than is generated.

According to the Ultrasound.Money tracker, 2.27 million ETH worth $6.25 billion has been burnt thus far. After the Merge later this year, the tracker predicts that the Ethereum supply will drop by 2.1% per year at current burn rates.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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