Ethereum: MetaMask wallet among top stakers - The Cryptonomist

After the Shapella update on 12 April, the MetaMask wallet has become one of the main interfaces used by Ethereum users to put their ETH in staking.

There has even been a single MetaMask wallet address that was discovered to have staked as many as 62,240 ETH in a single day, worth more than $110 million.

Ethereum’s Shapella update: staking grows with MetaMask wallet

The reason for this boom is simple: thanks to the Shapella update it is now also possible to withdraw ETH put into staking, whereas before they were not withdrawable.

So before Shapella, anyone who wanted to put ETH in staking had to accept the idea that they could no longer withdraw them indefinitely, but after Shapella this limitation simply disappeared. Now anyone who puts ETH in staking can request its withdrawal at any time.

The unlocking of staked ETH led to fears that withdrawals would be many, and that much of the ETH withdrawn might end up being put up for sale causing the price to fall.

This happened only minimally, as according to data from beaconcha.in there have since been only five days of sustained withdrawals, with a peak of 392,000 ETH withdrawn on 15 April. Since the total amount of staked ETH was over 18 million, the volume of withdrawals turned out to be very small, percentage-wise.

Moreover, deposits have increased specifically since 13 April, because now that ETH staked can be withdrawn, one of the main limits to this kind of use of ETH is gone.

It is worth mentioning, however, that the post-Shapella day with the largest deposits of ETH staked, 24 April, saw a total of 126,000 ETH staked, which is less than one-third of the record number of withdrawals on 15 April.

Indeed, overall, the total amount of ETH staked was reduced from over 18 million to just over 17.9 million, or a very small percentage ending balance.

It is worth noting that almost half of those 126,000 ETH staked on 24 April were ETH from the single MetaMask wallet mentioned above.

Ethereum staking on the MetaMask wallet grows

Note that Metamask does not have its own node on which it allows staking.

ETH staking is in fact done by depositing tokens on a validator node, but Metamask is a wallet and not a node manager.

This wallet enables ETH staking using external service providers, including the world’s largest Ethereum staking pool, namely Lido.

Right now more than 23.5% of all ETH staking is on Lido, followed in second place by Coinbase with less than 10%. So Lido is not only the largest Ethereum staking pool in the world, but it even has more than twice as many ETHs in staking as the second.

In third place is Binance with 3.8%, and in fourth place is Kraken with 3.6%.

Also worth noting is that over 40% of the ETHs staked do not appear to have been deposited on a staking pool, but were probably staked directly on user-owned nodes.

Metamask does not appear in this ranking, simply because it is not a staking pool, but only an interface that allows the use of staking pools such as Lido.

It is worth adding that a few days ago Metamask published a post on its official blog informing users how they can proceed with the withdrawal of ETH placed in staking.

The price of Ethereum

Since Shapella, the price of Ethereum has experienced two significant declines.

The first on 19 April, and the second on 21 April. However, between yesterday and today, the price went up a bit.

It is worth noting that precisely on 19 and 20 April, after three days of reduced withdrawals, the ETH withdrawn from staking had begun to rise again.

On the 21st the withdrawals actually stopped, and the price stopped falling. The 24th was another day of sustained withdrawals, but the price of ETH fell only slightly.

On the 25th the withdrawals almost stopped, and the price of ETH rebounded. Moreover, on 25 April there was also a sharp increase in ETH staking deposits. Against 31,000 ETH withdrawn there were 126,000 ETH deposited.

So at this stage the balance between ETH put into staking and ETH withdrawn from staking does indeed seem to be influencing the price.

Perhaps it is not a direct influence, but mediated by the sentiment of speculators who observe that data to work out their buying or selling strategies.