Ethereum Staking Demand Is Skyrocketing Even as Yields Sink Toward 2.5%

A recent report from Bitwise informed that Ethereum finished Q3 with 43.8 million ETH staked, equal to almost 36% of the total supply, after nearly 2 million tokens flowed into staking during that three-month period.

Although this marked the sixth consecutive quarter of growth in this metric, the annualized staking yield has been on a steady decline, dropping from 2.81% to 2.63%.

Keep Staking

What’s perhaps even more interesting is what took place after the end of the third quarter of the year. Beaconcha.in currently shows approximately 1.39 million ETH waiting in the deposit queue, with an estimated wait of more than 24 days. The queue for those waiting for the exit is significantly lower at just 39,000 tokens.

This imbalance suggests that demand to enter the staking ecosystem remains substantially stronger than demand to leave, even though the network-wide staking rate has dropped toward 2.6%.

Recall that the numbers were entirely different just over a year ago, when the exit queue skyrocketed to over 475,000 validators wanting to get out.

Bitwise said institutional entities, including staking ETFs and corporate treasuries, have been key contributors to this year’s inflows. One of the biggest names is BitMine, which recently reported over 5 million staked ETH, representing about 84% of its entire treasury. At a roughly 2.6% yield, chairman Tom Lee expects the position to generate more than $300 million annually.

Moving Beyond Yield?

Bitwise’s report estimates that more than 96% of Ethereum staking rewards currently come from newly issued ETH, with transaction tips and MEV contributing only a small portion. Network revenues have also fallen to roughly $40.6 million in Q3 from $63 million during the previous three-month period.

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This means the staking boom is raising a new question: how much ETH can be profitably locked before falling yields and issuance become a concern?

Ethereum developers have already debated proposals aimed at slowing staking growth. The recent EIP-8361 plan, published by Jerome de Tychey, proposed changing issuance incentives as the staking ratio approaches 50%, though a separate reward-burning proposal was later withdrawn from the Hegota upgrade process.

For now, though, ETH holders are accepting lower yields to stake their altcoin stash, and with roughly 1.4 million tokens still waiting to enter, demand appears far from exhausted.