Demand for ETH reserves has increased since the Shanghai update was implemented on the Ethereum mainnet a month ago. This allows Ethereum validators to withdraw all or part of their holdings of Ether (ETH) tokens from their original smart contract.
According to wenmerge.com, the wait time for an ETH holder to join Ethereum’s network as a new validator is 27 days and over 7 hours for him, and he has 50,398 potential validators in the queue. increase.
An Ether holder can earn a 4-5% yield on her through token staking by setting up as a network validator.
ETH staking has been available on He Beacon Chain since December 2020, but withdrawals were only enabled in last month’s update.
Adding withdrawal flexibility to ETH stocks reduces the risk for many investors. The investor may have avoided depositing ETH tokens for fear that the funds would be locked for a long time until the withdrawal was executed.
An increase in the number of confirmations queued to join the network goes hand in hand with an increase in the number of his ETH tokens in the smart contract.
According to Glassnode data, the number of ETH tokens held reached 21.652 million as of Monday, up from about 3.5 million a month after the Shanghai update.
The total supply of ETH tokens has reached about 120.08 million, which means the shareholding rate has exceeded 18%.
This is an increase of about 15% before the update, with 18.1 million ETH token holdings and a total ETH token supply of about 120.4 million.
The main ETH double rejection trend is a tailwind.
Competing blockchains with variable consensus contract termination, such as Cardano, have higher participation rates in the 60-70% range.
Only more than 50,000 ETH per day can be withdrawn from the staking contract, but Ether staking is not entirely volatile and may not reach such high levels of participation.
Suppose the equity participation rate of Ether reaches 50%. This could take him less than a year as the participation rate is currently growing at around 3% per month.
This means that an additional 38.4 million ETH tokens of his will be incorporated into the illiquid ETH staking contract.
Uncaptured ETH tokens will suddenly become scarce and should be a tailwind for prices.
Currently, the supply of Ether is also rapidly depleting.
According to Glasnode data, increased transaction fees due to network congestion related to Memcoin have led to an increase in the ETH burn rate (essentially, the Ethereum network burns all ETH tokens used to pay transaction fees). EIP1559 of August 2021). % is shown above.
Falling supply prices should be another big long-term tailwind for ETH prices.
