• The Shapella Upgrade has been boosting Ethereum staking, with the amount of ETH staked reaching nearly 23 million.
• Coinbase’s legal troubles have caused a slowdown in growth, but deposits to the Beacon contract are still outpacing withdrawals.
• Despite this, there are still underlying concerns regarding the regulatory scrutiny of Coinbase and a dip in new addresses locking 32 ETH.
Ethereum Staking Rises After Shapella Upgrade
The much-awaited but delayed Shapella Upgrade went live on the Ethereum [ETH] mainnet about two months ago, and has begun to progressively advance towards its goal of boosting ETH staking. Data from on-chain analytics firm Nansen showed that the amount of ETH staked on the largest proof-of-stake (PoS) network surged to nearly 23 million at the time of writing. This amounted to an increase of 18% from what it was on 12 April, the day the Shapella Upgrade was executed.
Confidence Boosted by Withdrawal Ambiguity
Staking, which was originally thought to be a risky proposition owing to withdrawal ambiguity, got a boost after the Shapella Upgrade permitted users to unstake their ETH. This confidence led them to restake their ETH after an initial burst of withdrawals. As per Nansen’s dashboard, deposits sent to the Beacon contract have consistently outpaced withdrawals over the last two months.
Regulatory Scrutiny Could Slow Growth
Though incidents like the U.S. Securities and Exchange Commission’s (SEC) lawsuit on crypto behemoth Coinbase over its staking program resulted in an increase in withdrawals in June, there is still some underlying concerns due to regulatory scrutiny of CEXs like Coinbase that could slow down growth further. According to Glassnode’s data, there has been a steady dip in new addresses locking 32 ETH since spiking at an all time high last month while Dune’s data showed that CEX’s contribution to ETH staking had dropped significantly compared with December 2020 levels when staking first became available via exchanges.
FUD Causes Customers To Withdraw From Exchanges
The FUD caused customers to withdraw their holdings from exchanges while also discouraging new users from participating in staking through centralized exchanges (CEXs). As such investors should consider both potential rewards as well as risks associated with staking before investing their funds into any project or product related with cryptocurrencies or blockchain technology .
Overall sentiment for Ethereum Staking remains positive despite some regulatory and market uncertainties causing FUD amongst investors leading some investors withdrawing their funds from exchanges and slowing down new user adoption rates through CEXs . Ultimately it will be up for individual investors whether they want take advantage of possible reward opportunities provided by cryptocurrency projects while understanding risk associated with them before investing any funds .