Crypto investors looking to yield on their ether (ETH) holdings face a waiting time of nearly a month to become network validators on Ethereum. Currently, data from two sources reveals a staggering 640 hours, or approximately 26 days, are necessary before being set up as validators. Interestingly, exiting the network takes a mere 0.013 hours or less than a minute.
Validators play a crucial role in proof-of-stake blockchains like Ethereum. They process transactions and contribute to the overall security of such networks. As of May, data showed that almost 50,000 validators were waiting in a “queue” to enter the network, drawn by the almost 5% annual yield. This immense demand could be attributed to large ether holders desiring to earn passive income on their holdings rather than cashing out.
Some experts believe that these upcoming validators could be comprised of a mix of new market entrants and former stakers who previously unstaked their ether from the network to test the process’s efficiency. They would then re-enter the validator queue.
The waiting period became particularly significant following the Shapella upgrade when numerous stakers locked up for over 18 months exerted considerable demand pressure. “This demand has since subsided as those stakers have all exited their position, and we are now seeing an increase in demand for staking from what we can infer are new participants entering the market for the first time,” explained Matt Leisinger, co-founder at staking protocol Alluvial.
Shapella, a fusion of two major Ethereum network upgrades – Shanghai and Capella – occurred on April 12 and allowed investors to withdraw their staked ether at will for the first time. Consequently, staking deposits have surged in recent weeks. According to on-chain analytics tool Nansen, over 200,000 ether were deposited to the network last week, marking the first time deposits exceeded withdrawals since Shapella went live. This increase has led to over 19 million tokens, roughly 15% of the total circulating supply, being locked for staking purposes.
While waiting times for stakers have been significantly lengthy, this suggests a strong interest in participating in the Ethereum network. The benefits of yielding on ether holdings seem to be appealing for both new entrants and those already familiar with the network. As the world of cryptocurrency continues to expand and more individuals explore various blockchain technologies, the growth and development of networks like Ethereum can be expected. However, the protracted waiting times need to be addressed to maintain a seamless experience for users eager to maximize passive income opportunities.
Source: Coindesk
