In May, the amount of Ether (ETH) staked hit a record-breaking high of 2.96 million ETH, comprising approximately 2.46% of the total supply.
The amount of ETH staked in May was greater than twice the amount staked in February 2022 and does not include any withdrawals.
The Shapella upgrade, which enabled validators to remove their staked ETH after two years, was implemented on April 12th. This was followed by a sharp increase in staked ETH. Even though some predicted that the large amount of ETH being unstaked would negatively affect the Ethereum network, only approximately 1% of all staked ETH was actually sold.
Following Shapella, a large quantity of ETH was taken out by validators from the Beacon Chain. Nevertheless, as May began, the amount of ETH staked had already exceeded the amount of withdrawals. Presently, approximately 18% of all ETH staking has taken place in May.
The massive increase in Ethereum staking in May was attributed to a number of causes, the most prominent being the US debt ceiling issue, trust in the US dollar, bank failures and the high annual percentage yield (APR) available on ETH staking. According to analyst Brian McColl:
The U.S. debt ceiling is a legal limit on the amount of national debt the U.S. Treasury is allowed to incur, restricting the amount of funds the federal government can borrow to settle its current debt.
Bitcoin holders leaving ‘capitulation’ above $20K, new metric suggests.
As previously reported by Cointelegraph, President Joe Biden and U.S. House Majority Leader Kevin McCarthy have agreed to increase the current $31.4 trillion debt ceiling. Nevertheless, financial experts such as BlackRock CEO Laurence Fink have cautioned that the controversy surrounding the debt ceiling could damage the world’s faith in the American dollar.
McColl pointed out that the current Annual Percentage Rate (APR) is approximately 5.4%, providing more advantageous deposit conditions than many banks worldwide, thus making Ethereum staking a popular option.
25,000 traders are wagering on ChatGPT’s stock selections, AI is not adept at dice rolling, and more in AI Eye magazine.
Subscribe to our email newsletter to get the latest posts delivered right to your email.