The Ethereum (ETH) network has reached a significant milestone following the highly anticipated Shanghai upgrade, as staking activity soars to new heights.
According to the cryptanalysis platform cryptorangeEthereum’s deposit contract balance has exceeded $40 billion, and users have deposited more than 4.4 million ETH since April 12 (the date of the Shanghai update release).
This surge in stake activity marks a pivotal moment for ETH and its transition to a proof-of-stake (PoS) consensus algorithm.
Stake Frenzy: A Post-Update Milestone
Recent data shared by CryptoRank reveals that the ETH deposit contract balance on May 23 stood at 22.6 million ETH, which is equivalent to $41.1 billion. This substantial increase in deposits can be attributed to the introduction of the latest feature that allows validators to withdraw their staked tokens.
The Ethereum network has seen a surge in interest, with users taking the opportunity to participate in staking and earn rewards for supporting the network’s security and consensus mechanism.
Along with the growth in the deposit contract balance, Ethereum has offered attractive staking returns. As of today, the staking annualized rate of return to run an ETH validator brackets at 8.66%, providing a significant incentive for users to engage in participation.
This figure is still significant, further fueling gambling interest among Ethereum investors looking to maximize their returns.
Furthermore, according to recent data From Token Unlocks, since the implementation of the de-staking on the Ethereum network, investors have deposited 4.68 million ETH in ETH 2.0 contracts.
Simultaneously, approximately 2.83 million ETH was withdrawn, indicating continued investor engagement and confidence in the engagement process.
The future of Ethereum staking
With the Ethereum network passing the $40 billion mark in deposit contract balance, the growth in staking activity means strong community commitment towards the PoS consensus mechanism. This development also highlights the transition from 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 increase in staking not only contributes to the security of the network, but also offers 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 returns.
Meanwhile, as ETH staking continues to rise, Ethereum founder Vitalik Buterin has warned about overloading the network consensus. In a recently published article blog postButerin noted: “Don’t overload the Ethereum consensus.”
The Ethereum founder further added that using the consensus of the Ethereum network for other things could lead to “high systemic risks to the ecosystem and should be discouraged and resisted.” However, after the warning, ETH staking has not seen any decline so far, but only an increase.
In the last 24 hours, ETH has experienced a 3.6% drop. The second largest crypto asset by market capitalization has fallen from a trading high of slightly above $2,000 in recent weeks to trading below $1,800, at the time of writing.
Featured Image from Shutterstock, Chart from TradingView