Due to increased regulatory pressure and the Shapella upgrade scheduled for April 12, Ethereum staking deposits have decreased slightly in recent weeks. Glassnode, an on-chain analytics provider, published a report on the current state of the Ethereum staking ecosystem on April 9.
According to the data, deposit activity is currently low “due to regulatory pressure and the Shanghai upgrade.” This year, financial regulators in the United States have been particularly harsh on cryptocurrency. Even though there is no official legislation from Congress classifying ETH as a security, the Securities and Exchange Commission (SEC) is adamant that Ether ETH $1,859 is a security and has cracked down on staking.
On April 12, the Ethereum network will receive a long-awaited upgrade. Shapella, also known as the Shanghai hard fork, will allow for the phased release of ETH staked on the Beacon Chain. According to Glassnode, these two factors are to blame for the drop in Ethereum staking deposits.
The firm also stated that major centralized exchanges like Coinbase, Binance, and Kraken had lost significant market share to the liquid staking platform Lido. “As the dust settled between the three titans, Lido emerged victorious, continuing to dominate deposit inflows as of now,” it said.
Lido currently accounts for nearly one-third of all ETH staked. This equates to approximately $11 billion from the platform’s 5.9 million ETH. Centralized exchanges like Coinbase take a hefty 25% commission on staking rewards, with Coinbase’s commissions even higher for other assets like Cardano $0.387 and Solana $20.
Lido charges a 10% commission and provides the opportunity to earn additional yields on DeFi platforms via its staking token, Lido Staked ETH. (stETH). This explains the gradual shift as savvy investors shifted to more profitable platforms.
Analysts predict that when ETH is released from the Beacon Chain following the Shapella upgrade, liquid staking platforms such as Lido will benefit.
According to the Ethereum metrics tracking platform Ultrasound. Money, there are currently 18.1 million ETH staked in total, worth around $33.7 billion and accounting for 15% of the total supply. Following the Shapella upgrade, this will be gradually released for withdrawal in the coming weeks and months.