Why Low Levels of Ethereum Staking Could Be Bullish

14.3% of the total supply of Ethereum is represented by the amount that has been staked. Additionally, this number has decreased over the previous week as a result of the Shapella update and the start of staking withdrawals.

Ryan Berckmans, a Web3 investor, stated on April 16 that he did not believe Ethereum staking will reach the high levels observed on other layer-1 networks.

Because Ethereum is too valuable and its supply is too low, few individuals are interested in staking it.

Staking entails locking up the asset, much like a fixed deposit account at a bank. When there isn’t much more to be done with the asset, this is done for modest, consistent yields.

Berckmans considers Ethereum’s low stake requirements to be a positive. According to Staking Rewards, the Cardano (ADA) staking ratio is an astounding 66%. Even more has been bet on Solana (SOL), amounting to 72%. Other networks with stake percentages of at least 40% include TRON, Cosmos, and Polkadot.

The lowest feasible issuance or dilution of Ethereum might be one cause causing this. “[This] is a key factor here versus other chains intentionally over-diluting to manufacture a high proportion of staking,” he claimed. Everyone “is going to stake,” he continued, “obviously” if the issue of Ethereum were to be 50% annually.

Network fees are one way to gauge, among other things, the demand and use cases for Ethereum. Ethereum has reportedly outperformed its rivals in terms of fees produced over the last six months, according to BeInCrypto. That too during a down market!

Berckmans came to the conclusion that his most recent change of heart was consistent with what the Ethereum research and development groups were saying. In conclusion, I believe that Ethereum’s low stake levels are really quite bullish, and that our low stake levels have always mostly been caused by this bullishness and sound monetary policy rather than a lack of withdrawals.