For the first time since April’s major Shapella upgrade, Ethereum’s backlog of new validators awaiting activation has nearly emptied.
The queue’s remarkable shrinkage signals a slowdown in demand to stake Ether after initial pent-up fervour was unleashed.
Ethereum transitioned to a proof-of-stake consensus model in September’s Merge upgrade. Validators must stake Ether to help secure the network in exchange for rewards.
However, strict limits on new validator entries created a long waitlist following the upgrade.
The queue ballooned to 45 days in June amid excitement over the newly withdrawable staked Ether. But as of Thursday, the expected wait dropped below 5 hours as the blockchain’s staking mania cooled.
Validator numbers have grown exceptionally since the merger, which also enabled staked ether withdrawals for the first time. Removing this lockup risk unleashed a wave of ether inflows.
However, staking rewards have since fallen to around 3.5% due to declining network fees. Meanwhile, low-risk US Treasury yields now exceed 5% as the Federal Reserve hikes rates. This makes staking’s yield less appealing.
Ethereum’s staking ratio has risen to 22% from just 6.5% before the merger. But it still lags behind proof-of-stake chains like Solana, Cardano and Avalanche. Their staking ratios range from 53% to 69%.
Industry analysts say the emptying activation queue implies slowing growth in Ethereum’s staked Ether supply.
The network’s breakneck pace of new validators has evidently moderated as yields drop and investors evaluate options.
For now, the blockchain’s once-packed waitlist for securing its future has nearly vanished entirely. The fading mania signals Ethereum’s success at opening access to stakes rather than any loss of long-term enthusiasm.
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