Bittime - The Ethereum community now has a new opportunity to earn yield through the presence of restaking. Glassnode, a blockchain analytics company, recently researched how the restaking trend could impact Ethereum's role as a monetary asset.
Increased Ethereum Staking Activity
The emergence of restaking protocols such as EigenLayer and LRT drove an increase in staked ETH holdings to 26% of the total supply. The analyst also noted an overall increase in staked assets to 31.4 million Ethereum (ETH) as of April 13.
While more ETH staked may reduce rewards for non-validators, Glassnode states that the overall total rewards paid could still contribute to inflation if there are a lot of assets locked up.
Impact of Staking on Inflation and Returns
After the Merge, the proportion of new coins in the total Ethereum supply reached 1.01%. During this period, approximately 3.55% of ETH was withdrawn from circulation. As a result, the reward rate for maintaining network security per validator drops to 3.2% per year.
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Experts are of the opinion that innovations such as MEV (Maximum Extractable Value), liquid staking, restaking and liquid restaking have led to an increase in the need for staking beyond the initial intent. The liquid restaking protocol accounted for 27% of the coins sent to the deposit contract.
As more ETH is staked, the effects of inflation begin to affect fewer asset holders. In other words, there is a transfer of wealth to participants who generate additional income from maintaining network security.
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Retaking and the Future of Ethereum as a Monetary Asset
Experts warn that over time, the real yield component could make ETH ownership less attractive and reduce Ethereum's function as a monetary asset in the Ethereum ecosystem.
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Restaking allows users to stake their assets multiple times on the main blockchain and additional protocols. Since the start of the year, the staking sector has grown rapidly.
In early April, the total value locked (TVL) in the restaking protocol surpassed $8 billion. The ether.fi project is the leader with a TVL of $3.2 billion.
Conclusion
The emergence of restaking offers new opportunities for the Ethereum community to earn additional returns. However, this trend also raises questions about its impact on inflation and Ethereum's function as a monetary asset. Market players need to pay close attention to these developments and conduct further research before making investment decisions.
How to Buy Ethereum (ETH) with Bittime
You can buy and sell Ethereum (ETH ) in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Ethereum (ETH )is available on Bittime with the market pair Ethereum (ETH )To be able to buy Ethereum (ETH )on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Ethereum (ETH ) on Bittime .
Monitor price chart movements for Ethereum (ETH ) , Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also read:
Get to know Ethereum restaking, what it is and the 3 best restaking projects
Coinbase and the Future of Ethereum Restaking: A Look at the DeFi Protocol EigenLayer
Restaking: The Future of Ethereum Staking or a New Threat?
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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