- The total ETH staked rose 18% since the Shapella upgrade.
- More than 60% of the stakers were in losses since they staked their ETH.
The much-awaited Shapella Upgrade, which went live on the Ethereum [ETH] mainnet more than two months ago, has begun to advance towards its goal of boosting ETH staking.
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According to on-chain analytics firm Glassnode, the total ETH locked on the largest proof-of-stake (PoS) network surged past 26 million at the time of writing. This represented an impressive 18% jump from the day Shapella Upgrade was executed.
Source: Glassnode
New validators come onboard
Staking, which was considered to be a risky proposition owing to withdrawal ambiguity, got a boost after the Shapella Upgrade permitted users to unstake their ETH. This confidence led them to restake their ETH after an initial burst of withdrawals.
At the time of publication, the total amount staked accounted for nearly 21% of ETH’s total circulating supply.
However, the increase in staking was not only due to deposits from existing stakers. Additional data revealed that there has been a sizable growth in the number of new addresses depositing 32 ETH to the Ethereum smart contract. While the pace has evidently slowed down since the initial excitement, it is still higher than the 2022 average figures.
Source: Glassnode
Staking becomes lucrative
A possible reason behind the persistence with staking could be that several stakers were underwater. As per data fetched from a Dune dashboard, about 66% of the stakers were in losses since they locked their ETH on the network.
The majority of this staking occurred at the price levels of $1,600 and $3,500, during the peak of the 2021 bull run. However, at the time of publication, ETH’s market price was $1,866.24, as per CoinMarketCap.
Source: Dune
Hence, it made more sense, especially for experienced stakers, to hunt for yield opportunities in staking and wait for ETH’s next bull run, rather than unstake and sell their holdings at losses.
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Exchange supply shrinks
The strategy was also reflected in the rapidly dwindling supply of ETH on exchanges. As per data given below, ETH’s liquid supply available for trading fell to a seven-year low at press time. This indicated that investors were more interested in the HODL and stake policy, thereby strengthening ETH’s narrative as a long-term investment option.
Source: Glassnode
