Spiking Interest in Ethereum Staking Grows despite Low Rewards, Fueled by Restaking Services
In a remarkable turn of events, the total value locked on EigenLayer, a prominent staking platform, has reached an all-time high of $13.7 billion. This surge in staking activity is not solely driven by the traditional staking rewards, but also by a new method called restaking, which provides an additional stream of income for Ethereum (ETH) stakers.
The liquid restaking protocol Ether.fi, developed by the same team behind Ether.fi, has also seen a significant increase in restaking activity, with a total value locked of $3.9 billion. Together, the total value locked on EigenLayer and Ether.fi surpasses $17.6 billion, underscoring the growing interest in Ethereum staking.
The increase in restaking activity is likely to be the main driver for the increasing interest in Ethereum staking. Despite a record low reward rate of 3.33% on March 29, the number of ETH staked on Ethereum has been increasing in recent months, reaching a record high of over 31.3 million ETH on April 8.
The total number of active validators on Ethereum is currently at 980,000, approaching the 1 million mark. However, the Validator Queue, imposed by Ethereum to balance its Proof of Stake (PoS) algorithm, is at its highest level since September 2023, with over 15,000 validators waiting to stake.
Interestingly, the number of validators waiting to exit Ethereum's network is fewer compared to those waiting to join. Over $1.8 billion worth of ETH, held by validators waiting to join, will soon be available for use on networks like EigenLayer and Ether.fi.
The minimum requirement to become a validator on Ethereum is 32 ETH. The Validator Queue helps prevent sudden changes in Ethereum's security, ensuring a stable and secure network for all participants.
In conclusion, the surge in restaking activity on platforms like EigenLayer and Ether.fi is reshaping the Ethereum staking landscape, offering additional income streams for ETH stakers and attracting more participants to the network. Despite the low reward rates, the total value locked on these platforms continues to grow, indicating a robust and thriving Ethereum staking ecosystem.
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