As the leading smart contract blockchain, Ethereum’s network activity forms a vital component of Web3, especially when it comes to decentralized finance (DeFi), smart contracts, decentralized applications (dapps), and more.
The execution layer within the Ethereum network architecture handles the execution of smart contracts and transactions. It takes instructions from transactions and smart contract interactions, processes them, and applies these changes to the state of the blockchain.
Ethereum was initially designed as a proof-of-work (PoW) network. However, this method of validating transactions carried several issues. Specifically, proof-of-work was energy intensive. Miners had to use lots of computing power to verify new transactions, causing congestion and a large carbon footprint.
As a result, Ethereum adopted a proof-of-stake (PoS) consensus as the network merged to the beacon chain. This design allows anyone to participate in securing the network by locking up their ETH.
Users can stake 32 ETH to run a validator node, which confirms new transactions. Alternatively, users can deposit as little as 0.01 ETH to liquid staking services to participate. In exchange, stakers earn rewards from a share of network transaction fees.
Ethereum staking has seen tremendous demand since launching in late 2020. At present, the network boasts more than 34 million ETH staked across more than 1 million ethereum validators.
This is at least partly due to growing interest in decentralized finance (DeFi) as an alternative to centralized exchanges. While centralized exchanges can be more user friendly, DeFi offers more freedom and control over assets, which is an attractive prospect for many crypto users. Participants also witnessed several extremely popular centralized exchanges “blow up” during the last bear market, including FTX and BlockFi.
Impressively, liquid staking currently accounts for nearly half of the total amount of ETH staked. The rapidly growing sector commands 13+ million ETH in total value locked.
Total Value Locked in ETH liquid staking (DeFiLlama)
2023 marked another momentous year for Ethereum. April’s Shanghai upgrade allowed stakers and ETH holders to withdraw their ETH holdings for the first time.
Naturally, this raised concerns regarding outflows from staking. However, these concerns were quickly dispelled. Demand for ETH staking has only grown since the upgrade as more traders look to secure rewards.
In fact, over 13 million ETH has been staked since Shanghai went live in April.
ETH staking net flow since Shanghai (Dune)
At present, over 25% of ETH’s total supply is being staked to secure the network. While impressive, this is a far lower figure than other proof of stake networks. Competing chains generally see more than 40% of native digital assets staked.
As adoption increases and the network expands, it’s likely that the amount of ETH staked will increase considerably. This is important as a higher percentage of staked ETH translates to more robust network security.
While the network benefits from increased staking, this invariably reduces yield for stakers. As more ETH is staked, the same pool of rewards is split between more users.
Fortunately, a number of innovative platforms have emerged to generate higher staking rewards for users. Origin Ether (OETH) has disrupted ETH staking with a groundbreaking offering. Users can mint OETH by depositing ETH or wrapped ETH, enabling them to earn higher yield than what's offered from liquid staking alone.
OETH maintains a peg to ETH, meaning that stakers can use it freely in DeFi. At the same time, deposited collateral is deployed to Ethereum's beacon chain, as well as in liquidity provision strategies via its AMO. This yield is automatically distributed to holders’ wallets.
As a result, OETH users retain full control over their capital. At the same time, holders earn higher yield than simply holding other LSTs.
The amount of rewards earned by staking ETH vary according to the method of staking. In general, liquid staking platforms offer users APYs of 3-5%. While solo staking offers higher rewards, this approach requires a large investment and constant maintenance.
Thanks to Origin Ether’s incisive strategies, OETH is able to deliver better yield for holders. Despite scaling rapidly, OETH offers APYs significantly higher than other liquid staking tokens. For example, it currently offers a trailing 7-day APY of 3.52%. Additionally, users can look forward to a seamless experience and robust security.
Discover how OETH can help you stack ETH faster by clicking here.
Staking Ethereum is a great way to earn passive rewards and support the network, but it’s not without some risks. One big thing to watch out for is slashing. If you're running a validator and something goes wrong—like your node goes offline for too long, or you mess up the protocol's rules—you could lose part of the ETH you’ve staked. It’s kind of like getting fined for not doing your job right. While this doesn’t happen all the time, it’s a real risk for those managing their own staking setups. That’s why a lot of people leave the technical stuff to trusted staking services.
Another issue is liquidity. When you stake ETH, it’s locked up, meaning you can’t just pull it out whenever you feel like it. Even though services like liquid staking offer workarounds by giving you tokens you can trade while your ETH is locked, those tokens aren’t always guaranteed to hold their full value if the market gets shaky. Traditional staking is even stricter—you might have to wait for specific withdrawal windows to access your ETH, which could be inconvenient if you need cash quickly.
Finally, Ethereum is always changing. Upgrades like Shanghai are meant to improve the network, but they can also change how staking works. For example, new updates might affect how rewards are calculated or tweak the rules for validators. While these changes are usually for the better, they can make things unpredictable for stakers.
The good news is you can manage most of these risks by doing your homework. Stick with reputable staking platforms that prioritize security, and stay in the loop on Ethereum updates so you’re not caught off guard. As long as you’re careful, staking is a solid way to grow your ETH stack.
Ethereum staking is set to get even bigger as the network continues to evolve. One major change on the horizon is making staking more accessible to everyday users. Right now, solo staking requires 32 ETH, which is a pretty steep price tag for most people. But platforms like staking pools and liquid staking services are shaking things up. They let you stake smaller amounts, sometimes as little as 0.01 ETH, making it easier for more people to join in. This could bring millions of new users into Ethereum staking, making the network stronger and more decentralized.
Another exciting development is scalability. Ethereum is working on something called sharding, which splits the blockchain into smaller pieces to handle more transactions at once. This means the network could become faster and more efficient, attracting more activity and boosting the rewards stakers earn. Imagine staking ETH and seeing your rewards grow not just because of fees, but because the network itself is getting better at processing transactions.
DeFi is also playing a huge role in shaping the future of staking. With liquid staking tokens, you can earn staking rewards while still being able to use your ETH in DeFi apps. That means you can stake your ETH and, at the same time, lend it out, trade it, or use it for yield farming. It’s like having your cake and eating it too. This kind of flexibility makes staking way more appealing, especially for people who want to make the most of their crypto without locking it up.
Looking ahead, it’s clear that staking will be a cornerstone of Ethereum’s ecosystem. Lower barriers to entry, better scalability, and more integration with DeFi mean there are plenty of reasons to believe staking will keep growing.
The network currently boasts more than 33 million ETH staked. This figure accounts for over 26% of ETH’s total supply.
Ethereum staking can be a highly rewarding experience. Using a platform like Origin Ether empowers you to earn outsized rewards without dealing with high technical barriers.
