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Ethereum staking deposits see drop amid regulatory and network upgrade challenges

Ethereum staking deposits have fallen recently

Ethereum staking deposits have fallen recently as a result of regulatory pressure and the upcoming Shapella upgrade scheduled for April 12.

On-chain analytics firm Glassnode has reported that deposit activity is currently low due to these factors. The US Securities and Exchange Commission’s crackdown on staking and classification of ETH as security has added to the decline in staking deposits.

The Shapella hard fork, also known as the Shanghai hard fork, will allow the phased release of ETH staked on the Beacon Chain, which is also impacting deposit activity.

Lido, the liquid staking platform, has emerged as the dominant player in deposit inflows, as centralized exchanges such as Coinbase, Binance, and Kraken have lost market share.

Lido currently accounts for almost a third of the total amount of ETH staked. With a 10% commission and the potential to earn additional yields on DeFi platforms through its staking token, Lido Staked ETH (stETH), analysts predict that liquid staking platforms will continue to gain popularity when ETH is released from the Beacon Chain after the Shapella upgrade.

Currently, there are around 18.1 million ETH staked in total, representing 15% of the entire supply and valued at around $33.7 billion.


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