Over 30% of the total ETH supply is now staked, according to on-chain data. It comes as the Ethereum ecosystem scales rapidly following the Fusaka upgrade last month.
30% of Total ETH Supply Staked: What Does It Mean?
On the Ethereum network, users can stake their ETH as a validator to earn yield while securing the network itself. According to the on-chain data provider CryptoQuant, the Total Value Staked (TVS) of ETH has achieved 36,261,768.
Based on the total supply of ETH at 120 million, this shows that over 30% of the entire supply of ETH has been staked so far. This number has been increasing gradually over the past 12 months by over 38%.
When users stake ETH through the validator pool, they typically go through an entry queue and an exit queue. That means that to remove their ETH from staking, users may need to wait between 2 days to 14 days depending on the queue. Thus, it is widely accepted that staked ETH through the validator pool is a sign of long-term confidence from ETH holders.
Several analysts attribute the rise in ETH staking and the increased confidence towards the Ethereum network to the successful Fusaka upgrade last December.
Why Investors Show Confidence Towards Post-Fusaka Ethereum
The Fusaka upgrade introduced some critical improvements in Ethereum. Namely, Peer Data Avaliable Samping (PeerDAS) significantly optimized the way nodes process data.
Before Fusaka, nodes had to download all “blob” data to process other data. In Ethereum, blob data refers to a temporary data type for rollups or layer two networks to post transaction data at scale. This led to inefficiencies in node operations, which slowed down the Ethereum network.
Post-Fusaka, nodes can now sample random pieces and rely on probabilistic guarantees to process data. It increases blob throughout dramatically and keeps node requirements low, allowing layer two networks to achieve significantly lower costs of transactions.
Shortly after the Fusaka upgrade, the Ethereum ecosystem saw a new all-time high in transactions-per-second (TPS). Based on GrowThePie's on-chain data, the Ethereum ecosystem processed 58,785 transactions in a single second, boosted by the scaling upgrades from Fusaka.
Investors are showing confidence towards a post-Fusaka Ethereum ecosystem because it enables rollups with cheaper transaction costs. This enables networks within Ethereum to operate high-performance apps that require high transaction output such as trading applications, for example.
