The road so far – The Ethereum (ETH) 2.0 beacon chain designed to coordinate the staking of ETH, was launched in early December 2020. This launch took place a few weeks after the publication of the smart contract allowing to lock ETH on the network. The number of ETH staked has grown rapidly since, reaching around 5.3 million units in early June 2021. The Ethereum Foundation subsequently announced in a statement on January 24, 2022 the discontinuation of the term Ethereum 2.0 in favor of consensus layer. Ethereum 1.0 is called the runtime layer. Merging the two layers forms Ethereum. This event called The Merge is scheduled for June 22, 2022. While waiting for the merger, staking on the consensus layer has increased again significantly.
10 million ETH staked in sight, before the June 2022 merger
The amount of ETH staked on Ethereum’s consensus layer has exceeded 9,570,000 ETH, while the number of validators on the network approaching 300,000 units.
Coinbase estimates that staking revenue will increase significantly after The Merge. At the end of this step, the transaction fees then paid to the miners will indeed be added to the staking income. The annual yields of the latter could then reach the 9 to 12%compared to the current 4.3% to 5.4%.
This significant increase in remunerative interest will make the network even more attractive for investors. It should thus be accompanied by a sharp increase in the amount of ETH staked and the number of validators.
Increasing the number of validators on the consensus layer should in theory be good news, as it improves the decentralization of the network on paper. In practice, many validators actually join a select number of staking pools that operate the nodes for them for a fee. In January 2022, 5 major pools offering more or less centralized services operated just under 37% of validator nodes on the consensus layer, according to data from Ethereum Pools.
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