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Staking activity on the Ethereum network continues to increase, with the amount of $ETH locked reaching an all-time high. The staking rate has risen to 34% for the first time.
Thus, the total amount of Ethereum staked on the network has reached 41.4 million $ETH, which is considered a significant development that could lead to a decrease in the circulating supply and increased price volatility.
According to the analysis, approximately one-third of Ethereum’s total supply is locked in the network as validators. The addition of over 1.4 million $ETH to the staking system in just the last week demonstrates that investors continue to consider the Ethereum network as a long-term investment.
Experts point out that the increase in staking rates could reduce the amount of liquid Ethereum in the market. A decrease in the circulating supply of $ETH could lead to more volatile price movements if demand remains strong. However, increased selling pressure during periods of low liquidity could also increase price volatility.
While the rapid growth of staking in the Ethereum ecosystem is seen as a positive development for network security, there are debates about whether excessively high staking rates could pose risks in terms of centralization and economic balance. Therefore, the Ethereum Foundation is working on a new plan to keep staking rates under control in the long term.
According to the foundation’s main proposal, new staking rewards will be stopped once the staking rate exceeds 50%. This aims to limit the economic mechanism that incentivizes staking more $ETH and to create a more balanced network.
Experts say the proposal is still under consideration and needs widespread support from the Ethereum community to be implemented. However, if the staking rate continues its current upward trend, this issue is expected to become one of the most important topics on the Ethereum ecosystem’s agenda in the coming period.
*This is not investment advice.