Ether staking yields have lost their appeal as falling payouts on pledged tokens currently stand at an annualized 3.5%, according to FalconX's David Lawant. This yield is lower than the 5% offered by US government bonds, signifying a shift from pandemic-era low-interest rates toward traditional financial assets.
The Validator Queue data has shown a significant reduction in the waiting list for validators on the Ethereum network, indicating decreased demand for Ether staking. The number of validators directly influences these staking payouts.
Services like Lido and Rocket Pool (NASDAQ:POOL), which gained traction following Ethereum network upgrades, have made access to staking rewards easier. However, strategists at JPMorgan Chase & Co. (NYSE:JPM), including Nikolaos Panigirtzoglou, suggest that this surge has negatively impacted Ethereum's yield attractiveness compared to traditional financial assets.
Other blockchains such as Solana and Cardano also use staking, with about 72% of Solana's SOL token and 63% of Cardano's ADA token locked for staking. In contrast, Ethereum's staking ratio stands at 22.6%. This differs from Bitcoin's approach, which does not employ staking.
Data from the Dune Analytics dashboard, provided by 21Shares AG, shows a significant drop in Ether coins staked from May to September amid the digital-asset rout. Despite Ether's year-to-date rise, it lags behind Bitcoin's rally, which has been driven by speculation of the US allowing Bitcoin exchange-traded funds.
Digital asset research company Kaiko reported that Ether’s price rose 1% to $1,581 while Bitcoin pushed 1.7% higher to $29,211 on Friday.
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