ETH Staking Demand Soars: Get 4-5% Yield With Flexible Withdrawals

• Demand for Ethereum staking has surged since the Shanghai upgrade, with a 27 day and 7 hour wait time for prospective validators.
• The addition of withdrawal flexibility to ETH staking reduces its risk and has encouraged more people to enter the network as validators.
• The number of staked ETH tokens is now up to 21.652 million with an 18% staking participation rate, which could reach 50% in less than a year.

Demand for Ethereum Staking Surges

Since the latest upgrade to the Ethereum mainnet – the Shanghai upgrade – just over one month ago, demand for ETH staking has soared. The waiting period for new validators entering the network is now 27 days and 7 hours, with over 50,000 prospective validators in line.

Withdrawal Flexibility Reduces Risk

The addition of withdrawal flexibility to ETH staking reduced its risk and encouraged more investors to become network validators. Token holders can stake their Ether tokens and earn an annual yield of around 4-5%. Withdrawal flexibility allows them to withdraw all or some of their staked tokens from the smart contract without locking up their funds for too long.

Staked ETH Tokens on the Rise

The number of staked Ether tokens has increased significantly since the Shanghai upgrade. According to Glassnode data, it is now at 21.652 million, representing an 18% participation rate based on total supply of 120 million ETH tokens. This rate could reach 50% within a year given that it is rising by 3% each month.

Dual Deflationary Trends Set To Boost Price

If Ether’s staking participation rate hits 50%, then an additional 38 million ETH would move into its less liquid smart contract address – meaning unstaked Ether tokens would become scarcer and drive up prices due to demand exceeding supply.

Conclusion

Ethereum token holders can set themselves up as network validators via token staking, earning a yield in return while benefiting from withdrawal flexibility provided by recent upgrades like Shanghai’s. Stake participation rates are currently rising quickly and could hit 50% in under a year, potentially driving up Ether prices due to increased scarcity of unstaked coins.

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