cryptoglobe.com
An Ethereum-based project that financed itself through an initial coin offering (ICO), Golem ($GLM), has recently moved 40,000 $ETH worth around $124 million to start staking the funds, effectively becoming a validator on the network to secure yield by helping secure it.
According to data from on-chain analytics firm Lookonchain, the move comes after Golem deposited 3,000 $ETH worth around $9.3 million onto leading cryptocurrency exchanged Binance, Coinbase, and Bitfinex, presumably to sell the tokens, building up on its sale of nearly $100 million worth of the second-largest cryptocurrency by market capitalization earlier this month.
Golem(@golemproject) appears to have stopped selling $ETH, and he staked 40,000 $ETH($124.6M) 8 hours ago.https://t.co/JLwB4bmBtQ pic.twitter.com/HzizTZ01YG
— Lookonchain (@lookonchain) July 11, 2024
Golem, according to Coinbase, is a decentralized computation network aiming to distribute excess computing power to those who need it through a peer-to-peer network that allows its participants to exchange computation.
The protocol’s native token, $GLM, facilitates exchange on this marketplace, with users setting bids for $GLM they are willing to pay for tasks to be completed for them. Those who complete these tasks are rewarded with those tokens.
On a blog post Golem addressed the Ethereum staking move, noting it’s using a “non-trivial but small portion” of its reserves to initiate “$ETH staking tests” to support the project’s growth and development in the future.
The project added it plans to stake part of its $ETH reserves to generate yield that will then be used for “operational activities, ecosystem development & building awareness of the possibilities enabled by Golem Network’s decentralized computing platform.”
Golem added that in a bid to show support for Ethereum’s decentralization efforts, it will stake solo – without using a third-party service or another validator.
As CryptoGlobe reported, Ethereum has seen the amount of $ETH staked within Ethereum 2.0 surge to a new all-time high of 47.38 million $ETH, equivalent to 33.9% of the cryptocurrency’s supply.
According to data from on-chain analytics firm Santiment, the figure has more than tripled from around 10.9% of the cryptocurrency’s supply held in the ETH2 Beacon Deposit Contract two years ago, and now stands at over $140 billion.
Staking in Ethereum 2.0 surged as more users allocated their funds to become validators, who lock up their $ETH to help secure the network in its new Proof-of-Stake consensus algorithm. In return, they earn staking rewards, but $ETH remains a deflationary cryptocurrency as an earlier upgrade meant transaction fees are burned.
Featured image via Unsplash.