Blockchain data analytics show that in the months following Ethereum’s switch to proof-of-stake (PoS) consensus, there has been a steadily increasing amount of Ethereum staked across different staking systems.
Decentralized finance (DeFi) has benefited greatly from the eagerly awaited Merge, and since Ethereum switched to PoS, staking solutions have been in great demand. This is supported by blockchain information gathered from numerous staking methods used throughout the Ethereum ecosystem.
As per the data studied, the Merge has had a significant impact on the introduction of staked ETH as a yield-bearing instrument. Nansen pointed out that Ethereum was a pure cryptocurrency but it has swiftly surpassed other collateralized yield-bearing services.
When Ethereum switched to proof-of-stake (PoS), validators—instead of miners—were required to stake or deposit 32 ETH in order to propose new blocks and get network rewards. Pooled staking, also known as liquid staking, permits the participation of those users who are unable or unwilling to stake 32 ETH. Additionally, post-Merge, users can withdraw their staked ETH at any time.
The data also suggested that holdings in liquid staking are skewed toward long-term investors, while newly introduced protocols are luring new deposits more quickly than seasoned services. Over 40% of the 14.5 million ETH that is overall staked in the ecosystem are held by staking pools like Lido and Rocket Pool, which hold 5.7 million of the total.
As per Nansen, a blockchain analytics firm, the fastest-growing staking pools over the last three months are those owned by Rocket Pool (rETH) and Coinbase (cbETH), with growth rates of 52.5% and 43.3%, respectively. Despite only being introduced in August 2022, the quantity of Coinbase’s cbETH has overtaken that of all other assets except stETH.
With a 79% market share of staked ETH, Lido’s staked ETH (stETH) pool controls the market. Aave, Curve, and Lido’s wrapped stETH contract contains 52% of the stETH coins, demonstrating interest and utility for investors and DeFi apps. Since the Ethereum Merge, the average daily trading volume for stETH has increased by 127%.
Retail users still have faith in centralized institutions, and the growth of Coinbase’s ETH staking option is an indication. They are comfortable with generating yield via staked ETH rather than more sophisticated and complex on-chain yield-bearing techniques.