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Ethereum Exceeds 500,000 Validators

The milestone comes months away from finally releasing staking-locked funds, which amount to more than 16 million ETH. About 12% of all circulating ETH is in staking.

In Short

  • More than $22 billion is on deposit in Ethereum staking.
  • Since the Merge, the number of validators on Ethereum has grown by 14%.

Ethereum has surpassed the milestone of 500 thousand registered validators in its network, translating to more than 16 million ethers (ETH) deposited in staking. The achievement arrived just over two years after the Beacon Chain, the Ethereum 2.0 blockchain’s launch, has existed since December 2020. The launch of this blockchain was the starting point for validators to be able to register in this network.

The Merge was the beginning when validators began confirming transactions and replacing the miners, an event that took place on September 15. If we look at the graphs concerning the growth of validator registration, we can see a slight rise in the number of validators registered as of this date. Although, it is worth noting that the momentum was more considerable between March and June 2022. Since the Merge, more than 70 thousand validators have registered on the network. About 14% of validators on Ethereum have registered as of this date.


Reduced profitability and staking withdrawals

To own an Ethereum validator node, you must deposit 32 ETH into a contract. However, there are cheaper options known as staking pools, with deposits of even $1, which delegate the management and ownership of the node to a third party.

The growth in the number of validators has translated into reduced profitability. As established by the Ethereum protocol, the higher the amount of ETH in staking, the lower the profitability. Currently, about 12.5% of all ETH resides in staking nodes.

When it reached 10 million ETH in staking, annual returns were around 5.72% yearly. Now that it has attained 15 million, the returns reduced to approximately 4.2% per year. The number of registered validators in the whole life cycle is the same because staking withdrawals are blocked, as established since the launching of the Beacon Chain.

The enabling of withdrawals is already on the table for developers, with March being the month to see the arrival of staking withdrawals. Consequently, we’ll observe a drop in registered validators for the first time.

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