ETH prices are currently experiencing volatility in the market, but a lesser-known metric indicates the strong health of the Ethereum network. The total amount staked on the Ethereum network has surpassed 30.2 billion ETH, which is approximately 25% of the circulating supply. This trend is not temporary, as the number of validators waiting to enter the network queue consistently reaches into the thousands.

Other networks like Solana, Polygon, Cosmos, and Polkadot also boast high staking ratios, with up to 65% of token supply locked to secure network rewards. This demonstrates the maturity of these platforms and instills trust among users. Efforts by DeFi projects and industry collaborators to make staking more accessible, user-friendly, and capital-efficient are also noteworthy.

Ethereum, for example, requires validators to stake a minimum of 32 ETH, which is a substantial investment. To address this barrier, Coinbase introduced Coinbase Cloud’s Partial ETH Staking, allowing users to stake any amount of ETH without the 32 ETH requirement. This solution has been adopted by self-custodial wallet Giddy, making staking more convenient and accessible.

Capital efficiency is another challenge in staking, as locked funds are typically inaccessible. Liquid staking protocols have emerged to address this issue, enabling users to receive Liquid Staking Tokens (LSTs) in exchange for their staked funds. These LSTs can then be used in other DeFi applications, improving capital efficiency.

DeFi protocols like Lido and Rocketpool dominate the Ethereum liquid staking space, but other chains are adopting similar models to attract high-staking users. The dYdX Foundation recently launched liquid staking on its chain in partnership with Stride, enabling token holders to purchase staked denominations of the DYDX native token.

EigenLayer, a pioneering protocol that recently received a $100M investment from a16z, allows LST holders to “restake” tokens in validating off-chain data and transactions. This innovation leads to double yields for validators. The introduction of Liquid Restaking Tokens further enhances capital efficiency for users.

SSV Network, a decentralized validator infrastructure project, simplifies staking and restaking by enabling the splitting of validator duties to multiple nodes. This approach improves resilience and offers staking apps that facilitate restaking of earned ETH validator rewards. With SSV, anyone with any ETH balance can participate in staking and restaking without compromising on capital efficiency.

Institutions are also entering the staking space, with custodian Taurus collaborating with Lido to offer liquid staking to FINMA-regulated Swiss banks. Taurus already partners with financial giants like Deutsche Bank and Santander, indicating a growing interest in staking opportunities. The future of staking in the crypto industry is promising, with more developments on the horizon.

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