Demands For Ethereum Staking Causes Month-Long Queues
May 15, 2023
Crypto & Blockchain
Crypto investors seeking to earn yields on their Ethereum (ETH) holdings will have to wait nearly a month before they can be established as network validators on Ethereum. The high demand for staking may be due to the demand of ETH whales wanting to earn passive income on their assets instead of cashing out.
As of Monday, staking ETH currently has a wait time of 640 hours, which is about 26 days. In contrast, exiting the network can be completed in just 0.013 hours or less than a minute.
Validators are entities that process transactions and ensure the security of proof-of-stake blockchains like Ethereum. As of May, there are approximately 50,000 validators waiting in a "queue" to join the network. According to some analysts, the upcoming validators waiting to enter the Ethereum network could include both newcomers to the market and individuals who had previously unstaked their ether to test the process and are now re-entering the queue.
According to Matt Leisinger, co-founder of staking protocol Alluvial, “Immediately following the Shapella upgrade, a significant amount of demand pressure was exerted by stakers who had been locked up for 18+ months and may have wanted to exit their staked ETH position.”
Leisinger continues, “This demand has since subsided as those stakers have all exited their position, and we are now seeing an increase in demand for staking from what we can infer are new participants entering the market for the first time.”
Shappella, which combined two major Ethereum network upgrades, allowed investors to withdraw their staked ether whenever they wanted, marking the first time this was possible.
According to data from on-chain analytics tool Nansen, staking deposits have seen a surge in the past few weeks, with over 200,000 ether deposited to the network last week. This marks the first time that deposits have outpaced withdrawals since the Shappella upgrade was launched last month.
The recent deposits have increased the total amount of ETH locked for staking to over 19 million tokens, which represents approximately 15% of the total circulating supply.
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