Stake rate has increased in preceding month before Merge
According to crypto analyst AliRelying on data from Glassnode, approximately 150,000 ETH, valued at around $195 million, was transferred to an ETH 2.0 deposit contract last week. Ethereum’s total holding has reached a new all-time high of 13.9 million ETH.
As reported by U.Today, the number of addresses for the ETH 2.0 deposit contracts reached 13,343,768 ahead of the Merge update. The stake rate also increased, with 153,000 new ETHs staked in the preceding month before the Merge.
On September 15, 2022, the merger took place, marking Ethereum’s historic switch from proof of work to proof of stake and marking the official abandonment of the resource-intensive, miner-based mechanism it had previously used for its decentralized ledger. to process the update. With the Proof-of-Stake consensus now fully implemented on Ethereum, Proof of Work has been formally deprecated, resulting in a reduction in energy consumption of approximately 99.95%.
ETH staking after Merge
Owners of ETH can stake their coins through the Beacon chain’s deposit contract. However, staking rewards and staked ETH are still locked and cannot be withdrawn. Staked ETH, current staking rewards, and newly issued ETH right after the Merge will all be locked on the Beacon chain without the ability to withdraw.
Instead, withdrawals are planned for the Shanghai Update, which will be the next significant upgrade after the merge. According to it, newly issued ETH will be locked and illiquid for at least 6 to 12 months after the merge, but it will still be stored on the Beacon chain.
All validators will be incentivized to remove their staking balances above 32 ETH once the Shanghai update enables withdrawals because these funds do not increase yield and are otherwise locked. They may be encouraged to leave their validators to recover their full balance, or they may stake even more using their rewards to get a higher yield, depending on the APR (calculated based on the total amount of ETH staked).
