coindesk.com
Crypto investors are committing more tokens to securing blockchains even as rewards fall, with improving access helping drive demand while the economics of staking face a broader test.
“Ethereum now has more stake securing it than at any point in its history, with 43.8 million $ETH staked or 35.9% of the total supply,” Kam Benbrik, head of onchain research at Bitwise, told CoinDesk.
Solana’s active stake climbed to 440.5 million SOL, according to Bitwise’s Q4 staking report.
Yet gross annualized staking yields fell on both networks.
The divergence raises questions about what drives investors to stake, how much they ultimately earn, and whether growing blockchain activity can offset declining returns from token issuance.
Staking involves committing tokens to help validate transactions and secure a blockchain in exchange for rewards. For investors already holding those assets, it provides a way to increase their token balances.
Demand can strengthen during weaker markets, according to John Zettler, senior director of product at Payward Services, the business-to-business arm of Kraken parent Payward.
“Generally, we observe that staking is countercyclical,” Zettler said. “In weaker market conditions, buy-and-hold behavior increases, driving greater staking demand and putting downward pressure on yields.”
Bull markets can reverse those forces, he said. Higher transaction fees can increase rewards, while investors’ preference for liquidity can reduce staking participation and lift yields further.
Access drives adoption
Alongside those market dynamics, industry executives point to a more lasting shift: staking is becoming an established part of holding crypto.
A Coinbase spokesperson said staking exchange-traded funds (ETFs) and digital asset treasuries are broadening access.
“Rather than seeing balances shift based on short-term movement, retail and institutional investors are buying into the long-term benefits of staking their crypto assets as more opportunities arise,” the spokesperson said.
Zettler said clients typically stake assets they already own, with investment and custody decisions coming before the search for rewards.
“Once those assets are held on a platform, clients consider additional services such as staking, with decisions around asset selection and custody generally coming first,” he said.
Ethereum staking’s operating history has also helped build acceptance, he added.
Institutional conversations now focus increasingly on implementation, according to Kean Gilbert, head of institutional relations at Lido Ecosystem Foundation.
“Institutions are clued up and want to talk strategy: how diversified the validator set is, who audits the code, and how much of a fund is actually staked,” Gilbert said.
