After ETH all-time high: Ethereum reaches new staking record
The Ethereum ecosystem is seeing several positives after Ethereum hit a new all-time high of $1,575 on 3 February.
During this time, Ethereum overtook the Avalanche network to become the third largest staking token in the Bitcoin Trend app crypto industry. With 2.15 percent of the total supply, Ethereum has over $3.7 billion locked up in its ETH 2.0 deposit address.
Ethereum falls behind Cardano and Polkadot, which staked $9.3 billion and $10.9 billion respectively. However, their staking percentages are much higher relative to total supply.
ETH 2.0 got off to a sensational start
Ethereum began its transition from version 1.0 to ETH 2.0 in late 2020, moving away from a proof-of-work (PoW) validation method to a proof-of-stake (PoS) protocol. By using PoS, Ethereum can theoretically make faster transactions on the network at a lower price.
The network has opted for a simpler method by switching from technical and energy-intensive PoW mining to PoS staking. In staking, users validate transactions by using their stakings as collateral.
This rewards users for acting truthfully and penalises nodes that try to deceive the network by reducing their initial staking.
Ethereum’s Beacon Chain
This model is a general improvement to verification that provides additional security to the network and makes the revenue from confirmation more comprehensive.
Since the launch of the ETH 2.0 Staking Contract, users from around the world have deposited nearly 3 million ETH.
The catalyst for decentralised finance
Decentralised finance, commonly known as DeFi, is one reason why the Ethereum network has exploded in popularity over the past year. DeFi allows everyday users to conduct financial transactions without the need for a third party.
This allows users to extract the full value of their transaction without being exploited by the platform operator. The total value locked into DeFi has grown from less than US$1 billion at the start of 2019 to nearly US$30 billion currently.
With the majority of DeFi applications built on Ethereum, it is no surprise that ETH has been able to establish itself as the third largest staking token.
Even though it has only a fraction of the total token supply compared to its closest competitors, it is by far the largest network. As DeFi continues to establish itself as a pillar of the blockchain, more users will likely be open to using their Ethereum (Go to Buy Ethereum at eToro guide) for Staking.