More than 10 million Ethereum ETH/USD, worth around $25.5 billion at current prices, has been staked in Ethereum’s consensus layer.
What Happened: According to data from blockchain explorer Etherscan, 10,031,858 ETH have been sent to the deposit contract since Nov. 4, 2021.
The deposit contract is a way to contribute to the Beacon Chain — the blockchain that facilitates Ethereum’s transition to a proof-of-stake consensus mechanism from proof-of-work.
Staking is a common way to earn passive income in the cryptocurrency space.
“In some sense, it’s the ultimate bet on progress, and the bet on progress to some extent is what Ethereum is about,” Ethereum's co-founder, Vitalik Buterin, said in a podcast last year.
Since each user needs to deposit at least 32 ETH to participate in the process, some prefer to stake their ETH in the contract through pools on centralized exchanges like Coinbase Global Inc. COIN.
Coinbase estimates that staking yields could rise from their current levels of 4.3% annual percentage return (APR) to as high as 12% APR once Ethereum’s mainnet merges with the Beacon Chain this year.
JPMorgan Chase & Co. JPM has also forecast Ethereum’s post-merge era could kickstart a $40 billion staking industry within the next three years.
Price Action: As of Friday morning, Ethereum was trading at $2,547, down 1.87% in the last 24 hours.
Photo by Michael Förtsch on Unsplash
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