The recent surge in restaking protocols has prompted a closer examination of Ethereum’s position as a monetary asset, according to insights provided by Glassnode.
The introduction of EigenLayer and LRT staking protocols has significantly bolstered Ethereum’s share of staked assets, now accounting for 26% of the total supply. Analysts have observed a notable uptick in the overall staked coins, with the figure reaching 31.4 million Ethereum (ETH) as of April 13.
Despite the increase in staked ETH, which consequently diminishes non-validator rewards, Glassnode warns that the cumulative rewards payout could still contribute to inflationary pressures, particularly if a substantial amount of assets remain locked.
Post “The Merge,” the proportion of new coins in the total Ethereum supply has risen to 1.01%. During this transition, approximately 3.55% of ETH was withdrawn from circulation.
This metric surge has resulted in a reduction in the annualized security rewards per validator to 3.2%.
Moreover, the advent of innovations such as MEV, liquid staking, restaking, and liquid restaking has spurred a heightened demand for staking, extending beyond its original purpose, as noted by experts. Liquid restaking protocols alone constitute 27% of the coins deposited into the staking contract.
As the amount of staked ETH continues to grow, the impact of inflation becomes increasingly concentrated among fewer holders, effectively redistributing wealth to participants who earn additional income by upholding the network’s security.
Experts caution that over time, the diminishing real yield component may erode the attractiveness of ETH ownership, potentially undermining its function as a monetary asset within the Ethereum ecosystem.
Restaking mechanisms enable users to stake their assets repeatedly across the main blockchain and supplementary protocols, driving significant growth in the sector since the year’s outset.
In early April, the total value locked (TVL) in restaking protocols surpassed $8 billion, with the ether.fi project emerging as the sector leader with $3.2 billion in TVL.
