According to data from BestBrokers, Ethereum staking solutions remain popular as the network prepares for the ‘merger’. In the event that this network goes Proof-of-Stake (PoS), users seem to be crowding in for a chance to receive some of the rewards for securing the network.
Currently, Ethereum operates with a Proof-of-Work (PoW) algorithm that requires users to participate in a mathematical problem-solving process to validate a group of transactions. This process is known as “mining” and requires specialized equipment and technical knowledge.
Under the new consensus, users can simply stake some of their ETH and receive a reward for securing the blockchain, but this process is expensive. At the time of writing, users need 32 ETH or over $30,000 to become a validator.
Lido, and other major trading platforms crypto offered a solution to their customers. Rather than betting the required amount, they can bet part and still receive part of the rewards.
BestBrokers’ study shows that since the implementation of Ethereum’s staking mechanism with the Beacon chain, in 2020, there are 4.1 million ETH staked on Lido. This represents 31% of the total pool of ETH staked on the PoS blockchain or 129,754 validators on the Lido alone.
In contrast, Coinbase holds 1.9 million ETH, Kraken 1.1 million ETH, and Binance 895,744 ETH, which is barely around 3 million. As shown in the chart below, Lido dominates the ETH staking market by far.
Alan Goldberg, an analyst from BestBrokers, had the following to say about why people are looking for solutions like the Lido:
With the shift from proof-of-work to proof-of-stake, many people are predicting a surge in Ethereum prices, as staking Ether is believed to bring great benefits and rewards. Although such a rise is not certain, mainly due to current market conditions and recession fears, it is certainly a big step towards the future of blockchain technology as a whole.
What does Ethereum hold before the “merger”?
According to additional data provided by Joshua Lim, Head of Derivatives at Genesis Trading, options market participants have taken long positions in ETH in preparation for the “merger.” As shown in the chart below, institutions are betting on ETH price moving towards $3,000. Read also: Cryptocurrency: When the EU flies to the rescue of ETH at the expense of Bitcoin! These internal documents reveal how the EU could crack down on bitcoin and “protect” ethereum..
However, many believe that the “merger” could function as a “buy the rumour, sell the news” event. This could drive Ethereum price up through mid-September, before seeing it fall back later in the month.
Analyst Ali Martinez records a drop in the number of new ETH addresses. This metric crashed to its March 2020 lows, hinting at potential downward pressure for the second-largest cryptocurrency by market capitalization. Martinez said:
The growth of the Ethereum network has not been this weak for more than two years. The last time the number of new daily ETH addresses was 49,700 was in March 2020. A steady decline in the number of new addresses created on the ETH blockchain tends to cause prices to correct sharply over time.
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