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Ethereum’s staking rewards rate remains at around 3%, lower than other proof-of-stake chains

Ethereum’s staking rewards rate remains at around 3%, lower than other proof-of-stake chains

The BlockThe Block2024/10/30 04:00
By:Brian McGleenon

The staking rewards rate on the Ethereum network currently stands at 3%, slightly down from over 3.5% in July.Analysts noted that Ethereum’s staking yields are lower than other major Layer 1 protocols.

Ethereum’s staking rewards rate remains at around 3%, lower than other proof-of-stake chains image 0

The staking rewards rate on the Ethereum network stayed close to 3% during the third quarter of 2024, after a slight decline from just over 3.5% in the first quarter.

The Block's data dashboard shows that the Ethereum Staking Reward Reference Rate, a metric representing the average annual returns that validators on the Ethereum network receive, is about 3.1% annually.

Analysts say the staking rewards remain lower than other proof-of-stake chains. "Ether staking yields are now lower than those offered by other major Layer 1 protocols like Cosmos, Polkadot, Celestia, and Solana, which range between 7% and 21%," Kaiko analysts stated. However, it's worth noting that low staking rewards reduce inflationary pressures on a given network.

Kaiko Research analysts further noted in a report that the Ethereum validator queue has averaged less than a day and rarely exceeded four days all year since August, a sharp contrast to the 45-day peak in June 2023.

The Block's data dashboard suggests a similar trend, indicating a significant reduction in the daily number of Ethereum validators in the entry queue. In mid-April 2023, the Ethereum validator entry queue peaked at over 95,000, but this number has now decreased to just 473.

Kaiko Research also pointed to data showing that  Ethereum staking provider Lido’s stETH, representing about 28% of the total staked ETH market share, has seen a modest increase in inflows year-to-date, but these are lower than last year.

"While staking inflows have tapered, growth in the supply of the largest Ethereum staking provider, Lido, has plateaued. Lido’s staked ETH (stETH) supply has remained stable this year, averaging around 9.6 million ETH — indicating a general slowdown in the amount of ETH deposited in the Beacon Chain contract," Kaiko analysts added.


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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