According to Coinbase research, investor demand for staking in Ethereum is losing momentum.
Validators on the Ethereum blockchain lock an amount of ETH confirms users’ transactions and in return earns ETH as a reward. Validators increase their staked ETH after Shanghai update to be able to pull they started.
With the growth in demand to become a validator in recent months, staking returns have increased decreased from over 5% to 3.5%.
According to Coinbase researchers, if there is no major change in mobility or transaction fees on the Ethereum blockchain staking returns are stable can progress.
Activity on the Ethereum blockchain was generally stable throughout the third quarter of the year. Coinbase researchers left the following note:
“Since there will be no major protocol update in Ethereum until Dencun, which will probably take place in the first half of 2024, we do not see a technical reason to significantly affect the mobility on the blockchain unless a new protocol is opened or very bad hack attacks occur.”
With the Dencun update, several steps will be taken that are expected to reduce transaction fees on the Ethereum blockchain.