The Ethereum network has seen its validator queue hit zero for the first time since its Shanghai update in May, indicating a declining interest in Ether staking among investors.
A recent analysis of blockchain data by Validator Queues highlighted that only a handful of validators are presently waiting in the Ethereum network’s entry and exit queues, with their onboarding process being almost immediate.
Data from the report pointed out that as of June 10, a massive 96,508 validators were lined up to stake their ETH in its Proof-of-Stake (PoS) system.
Contrastingly, the entry queue now stands empty, marking a stark drop from its high earlier in the year. This trend provides insights into the evolving dynamics of the staking ecosystem.
The waiting period for validators wanting to join the Ethereum blockchain network has seen a significant reduction. Currently, there’s virtually no wait time, in stark contrast to early June, when validators faced a staggering wait of 45 days and 22 hours.
As of the latest reports, the turnover capacity for validators, termed the ‘Churn Limit,’ has seen a slight uptick. It’s moved from 12 to 13 epochs, translating to a daily limit wherein 2,925 validators can either join or depart from the Ethereum network.
Ethereum Staking Rewards Continues To Plummet
For the first time since the introduction of the “Shanghai” update – also dubbed the Shapella upgrade in April – there’s a noticeable drop in the influx and outflow rates of validators on the Ethereum network.
This Shapella upgrade heralded Ethereum’s forthcoming shift to a fully realized proof-of-stake (PoS) mechanism, resulting in a surge of institutional interest and sizable ETH deposits.
Validators play a critical role in the PoS model of Ethereum; they secure and uphold the blockchain by staking their Ether. For their contributions, they’re rewarded through staking incentives.
A significant feature that emerged for validators was the newfound capacity to retract their staked Ether. This measure addressed and alleviated concerns of many investors, who were previously hesitant due to fears of their funds being irrevocably tied up. However, despite these positive changes, the initial enthusiasm appears to be waning.
Glassnode’s latest metrics reveal a substantial dip in staking rewards on the Ethereum network, plummeting to approximately 3.3% from an earlier rate of 7% this year.
However, despite this decline in staking profitability, the supply of ETH saw an increment of $47M in the past week. Several market experts have connected this rise in supply to a recent dip in transactional activity.
Interestingly, while the enthusiasm for staking ETH appears to have decreased, there is a concurrent rise in the number of active validators. Validator Queues’ data indicates that the Ethereum network currently hosts 861,938 active validators, with a significant 22.79% of the total cryptocurrency supply being staked.
This seemingly paradoxical trend might be attributed to the growing traction of liquid staking platforms such as Rocket Pool and Lido. These platforms have collectively amassed a remarkable $15 billion in Total Value Locked (TVL), underscoring their rising prominence in the crypto landscape.