Staked Ethereum (ETH) have more than doubled just days before the network’s long-awaited merger, according to information from Arcane Research, an information company for the cryptocurrency market.
Specifically, the total amount of ETH that has been staked has increased more than 100%, i.e. from 6.5 million to 13.4 million in the last year, despite the fact that Ethereum has seen its price drop 51% from its all-time high.
Ethereum’s transition from a proof of work mechanism to a proof of participation mechanism will significantly change the way the blockchain works, as it will rely on validators for network security rather than miners.
“Scheduled for September 15th, the merger is fast approaching and will drastically change the Ethereum economy. Instead of miners securing the network, it will rely on validators to stake their ETH, allowing them to run block-generating nodes and earn returns on their staking.”Arcane Research Report
Arcane Research’s data reveals that about 10% of the total amount of Ethereum (ETH) has been staked ahead of the merger.
Calms concerns and offers perspective for Ethereum
The cryptocurrency analyst firm continues to calm the public’s concerns about the possibility of mass ETH sales when the ability to withdraw staked ETH will once again be available. As a reminder, currently, staked ETH are locked and cannot be moved.
“Because staking is high-risk, the vast majority of ETH has not been staked, but when withdrawals are unlocked (scheduled to happen in 2023, post-merger), the performance game may be the safer play.”Arcane Research
At this stage, the ETH that is staked remains locked and cannot be withdrawn. There is still no update on when users will be able to withdraw their staked ETH.
However, the company believes that when the ability to withdraw staked ETH is offered, this will lead to an increase in demand for staking as the public will feel more secure to store their ETH.