Liquid Staking Surge: Ethereum’s $74 Billion Pledge and Regulatory Challenges
Blockchain data firm Nansen reports that users are currently staking more than a quarter of the total Ethereum (ETH) supply, equivalent to over 30 million ETH or approximately $74 billion.
Staking involves users pledging their digital coins to support the Ethereum network’s operations, earning token rewards in return. With the recent upgrade allowing easy withdrawal of staked ETH, liquid staking protocols have gained popularity. As the Ethereum community anticipates the approval of an exchange-traded fund (ETF), proposals are incorporating staking practices. Ark 21Shares, in an amendment to their spot ETH ETF S-1 filing, mentioned the possibility of staking a portion of the trust’s assets.
However, regulatory concerns persist, with the U.S. Securities and Exchange Commission having fined major crypto companies for allegedly selling unregistered securities through staking services. Additionally, the Ethereum network is undergoing the Dencun upgrade, set to address scalability issues and potentially enable over 100,000 transactions per second when it goes live on the mainnet by March 13.
Clever Robot News Desk 9th February 2024