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The Ethereum (ETH) network has reached a major milestone following a highly anticipated Shanghai update as staking activity soars to new heights.
According to cryptocurrency analytics platform Cryptorank, the Ethereum deposit contract balance has exceeded $40 billion and users have deposited more than 4.4 million ETH since April 12 (the launch date of the Shanghai update).
This surge in staking activity marks a turning point for ETH and its transition to the Proof-of-Stake (PoS) consensus algorithm.
Staking Frenzy: post-update milestone
The latest data provided by CryptoRank shows that the balance of the ETH deposit contract as of May 23rd was 22.6 million ETH, which is equivalent to $41.1 billion. This significant increase in deposits may be due to the introduction of the latest feature to allow validators to withdraw their tokens.
Ethereum (ETH) stakes exceed $40 billion.|Source: Cryptorank
The Ethereum network experienced a surge of interest as users took advantage of the opportunity to participate in staking and be rewarded for maintaining the network’s security and consensus mechanism.
Along with the growing balance of deposit contracts, Ethereum offers an attractive staking income. As of today, the annual staking yield for running an ETH validator is 8.66%, which gives users a significant incentive to participate in staking.
This figure remains significant, further spurring interest in staking among Ethereum investors looking to maximize their returns.
In addition, according to the latest data from Token Unlocks, since the introduction of unstaking on the Ethereum network, investors have contributed 4.68 million ETH to ETH 2.0 contracts.
Approximately 2.83 million ETH was withdrawn at the same time, indicating continued investor interest and confidence in the staking process.
The Future of Ethereum Staking
With the Ethereum network surpassing the $40 billion mark in deposit contract balances, the surge in staking activity is indicative of the community’s strong commitment to the PoS consensus mechanism. This event also highlights the transition of Ethereum to Ethereum 2.0, where staking will play a vital role in securing the network and achieving scalability.
As ETH continues to evolve, the surge in staking participation not only contributes to the security of the network, but also provides an opportunity for ETH holders to earn passive income through staking rewards. By actively participating in staking, users can contribute to the growth and decentralization of ETH while reaping the benefits of staking.
Meanwhile, as the number of ETH stakes continues to rise, Ethereum founder Vitalik Buterin has warned of potential network consensus overload. In a recently published blog post, Buterin noted, “Don’t overload the Ethereum consensus.”
The Ethereum founder also added that using the Ethereum network consensus for other purposes could lead to “high systemic risks to the ecosystem and should be discouraged and resisted.” However, after the warning, ETH staking has not yet seen any decline, only growth.
Over the past 24 hours, ETH has fallen by 3.6%. The second largest cryptocurrency asset by market capitalization has fallen from a trading high of just above $2,000 in recent weeks to below $1,800 at the time of writing.
Ethereum (ETH) price is moving sideways on the 4-hour chart. Source: ETH/USDT on TradingView.com.
Featured image by Shutterstock, chart by TradingView