Steadily mortgage ETH to exceed exchange balance

Summary:

• Data from Blockchain Intelligence startup Nansen shows a steady increase in the amount of ETH staked.
• To date, users and entities have locked up over 22 million tokens, representing approximately 18% of the token supply.
• Meanwhile, balances on cryptocurrency exchanges are falling and are currently below 30 million tokens.
• Analysts say the Shapella upgrade removes concerns about withdrawals and sparks a boom in locked tokens, as stakers can earn rewards instead of just holding their tokens.

The amount of ETH staked continues to increase after the launch of Shapella, which allows withdrawal of locked tokens on the Ethereum Beacon chain.

After the merger — ethereum’s massive technical shift from proof-of-work to proof-of-stake — proponents were concerned about withdrawal functionality and possible selling pressure in the market.

Nansen’s Martin Lee said that neither concern matters because Shapella incentivizes users and entities alike to stake more tokens.

As of press time, the number of staked tokens exceeds 22 million tokens. This equates to around 18% of the available supply.Merge also emission reduction This means fewer tokens are released per block awardmaking ETH enter a deflationary state.

ETH exchange

While staked tokens continue to rise, token balances on crypto exchanges have steadily declined. According to Nansen, the balance on cryptocurrency exchanges has dropped below 30 million.

One reason may be that entities are now more likely to stake their tokens after enabling withdrawals, rather than simply holding the asset.

Analysts believe that staking incentives are now greater because withdrawals can be made, and staking can earn benefits or rewards by locking tokens. In contrast, holding tokens on a crypto exchange yields nothing.

Cryptocurrency prices fell across the board after the SEC filed lawsuits against Binance and Coinbase. During Monday’s trading hours, traders were able to acquire around $1,740 in the token.