The slowdown in daily trading activity doesn’t appear to have deterred market participants from staking their crypto across various protocols.
According to data shared by Staking Rewards on Monday, the amount of crypto staked currently stands at $95.5 billion in market value. This represents a 13.8% rise over the week, which also saw a 24.8% increase in annualized staking rewards to $8.75 billion.
The asset which saw the most inflows was Ethereum, which recorded $336 million worth of staking inflows. Far behind in second place was Polygon’s native token MATIC, which saw $20 million worth of inflows for the week.
Staking provides a way for users to earn passive income on their crypto holdings. Proof-of-Stake cryptocurrencies lets users earn annualized rewards on the crypto they deposit in staking pools. This crypto then becomes part of the process of validating transactions on the blockchain, and the validator rewards are distributed to stakers based on the proportion of the initial value staked.
The popularity of staking is evidenced by the percentage of a token’s supply that is locked into staking protocols. For instance, more than 76% of Solana’s tokens are staked on-chain with a collective market value of $13.3 billion.
Ethereum quickly became the most popular choice for staking after the launch of the Beacon Chain in 2020 – an event that put the network’s transition to a Proof-of-Stake (PoS) consensus mechanism in motion.
After the Merge, which marked the official transition to PoS, Ethereum’s validator count has grown significantly.
As of Nov. 1, there were 457,095 validators on Ethereum. With a staking market cap of $24 billion, Ethereum takes the top spot as the most staked crypto asset, despite offering an annualized reward of 4.3% which is considerably lower than some other blockchains.
This can be explained by the adjusted staking reward, which accounts for the network’s reward rate adjusted for its inflation, or increase in supply. Ethereum’s adjusted staking reward was 4.46% at the time of writing.