According to CoinDesk, Ethereum's queue for new validators on the blockchain has almost completely cleared out for the first time since the major Shapella upgrade in April. This upgrade marked the completion of Ethereum's transition to a fully-functioning proof-of-stake network. Blockchain data reveals that there are now just 598 validators waiting to join the network, down from a peak of over 96,000 in early June. Consequently, the expected waiting time to add a new validator to the network has shrunk to less than five hours as of Thursday, a significant decrease from the previous 45-day wait due to massive pent-up demand to stake ether (ETH), the network's native token.
Ethereum's rules limit how many new validators can join every blockchain epoch, or roughly 12 seconds. Validators participate in maintaining Ethereum's proof-of-stake blockchain and verifying transactions by staking ETH, receiving staking rewards in return. The Shapella upgrade allowed the withdrawal of staked ETH for the first time, eliminating a significant source of risk for investors and unleashing a wave of inflows into the blockchain's staking mechanism. However, David Lawant, head of research at institutional crypto exchange FalconX, noted in a market report that the initial fervor has started to cool, with staking rewards dropping significantly to near 3.5% from 5%-6% earlier this year.
Ethereum's staking ratio, the share of tokens staked in the network versus total supply, has grown to over 22% from 15% in April and 6.5% last September but still lags behind other popular proof-of-stake networks. The same ratio for Solana (SOL) is 69%, while it's 63% for Cardano (ADA) and 53% for Avalanche (AVAX). Lawant attributes this to ETH being used as a network resource and Ethereum having a more distributed shareholder base.
