As the crypto community is anticipating Ethereum 2.0, a large number of Ether (ETH) holders already have enough ETH for staking on the network.
Nearly 80% of total Ether (ETH) supply is being held by non-crypto exchange wallets exceeding the amount required for staking on Ethereum 2.0, according to the latest “Ethereum 2.0 Economic Review” report. Published on July 16, the report is by executives at the Ethereum blockchain infrastructure developer ConsenSys.
The network accumulates ETH required for staking on Ethereum 2.0
According to the report, 77.7% of the current ETH supply, or about 86.6 million ETH, lives in wallets holding more than 32 ETH — the minimum amount required to earn staking rewards on ETH 2.0.
While the majority of staking-ready ETH is held on non-exchange wallets, an additional 18.7 million ETH is managed by exchanges subject to staking services, the report says. According to ConsenSys, these scales make up a “compelling serviceable addressable market,” while a key objective of staking rewards should be “to convert these wallets into active validators.”
ConsenSys experts further outlined that 13.8% ETH staked will match the security levels of ETH1 at historical prices. “We calculate that the target ETH stake rate for adequate security under historical price fluctuations is 13.8%,” the report notes.
What is Ethereum staking and why does it matter?
Ethereum staking is a major part of the Ethereum blockchain’s highlyanticipated upgrade, the so-called Ethereum 2.0. This upgrade moves Ethereum’s implementation consensus from miners-oriented Proof-of-Work, or PoW, to validator-oriented Proof-of-Stake, or PoS.
Crypto holders that own more than 32 ETH are eligible for ETH staking — a practice that allows users to earn rewards in exchange for validating the blocks instead of miners.
Earlier in May, ConsenSys published a report revealing that 66% of ETH holders were planning to stake their coins as soon as the first phase of ETH 2.0’s roll-out is completed.
While the Ethereum 2.0 implementation is expected to come later in 2020, the network has been in 2.0 testnet known as “Beacon” since May 2020.