The staked Ether (ETH) on the Ethereum blockchain network has experienced a significant surge following the April Shapella hard fork, reaching a new peak of 23 million ETH as of June. This record-breaking amount of staked ETH, valued at nearly $43 billion, represents around 20% of the total ETH supply, currently worth $220 billion.
Staking in the crypto world involves users committing their crypto tokens to validate transactions. Ethereum network users can lock their ETH tokens into the network, becoming validators who help secure the network and earn rewards in return.
Since the implementation of the Shapella hard fork on April 12, validators have been able to withdraw their staked ETH from Ethereum's Beacon Chain. In the initial week following this upgrade, over a million ETH were unstaked. However, this development has since sparked a consistent increase in the growth of staked ETH.
Analytics firm Nansen reports that Ethereum's staking ratio is rapidly approaching that of its competitors, such as Solana, which currently has a staking ratio of 71%. The ease of staking and unstaking Ether following the Shanghai upgrade has been a driving factor in this escalation, according to Dave Weisberger, CEO of CoinRoutes, an algorithmic trading platform.
Regulators, particularly in the U.S., have taken notice of the surge in Ether staking. The Securities and Exchange Commission (SEC) has been cracking down on crypto firms offering staking services, leading to Kraken settling for $30 million in February and subsequently shutting down its U.S.-based staking services. The SEC has also recently challenged Coinbase's staking program on similar grounds.
As the U.S. is home to nearly half of all Ethereum node operators, the regulatory future of ETH staking in the country remains uncertain. This could have significant implications for the broader Ethereum ecosystem.