An Ethereum-based project that financed itself through an initial coin offering (ICO), Golem (GLM), has recently moved 40,000 ETH worth around $124 million to start staking the funds, effectively becoming a validator on the network to secure yield by helping secure it.
According to data from on-chain analytics firm Lookonchain, the move comes after Golem deposited 3,000 ETH worth around $9.3 million onto leading cryptocurrency exchanged Binance, Coinbase, and Bitfinex, presumably to sell the tokens, building up on its sale of nearly $100 million worth of the second-largest cryptocurrency by market capitalization earlier this month.
Golem(@golemproject) appears to have stopped selling $ETH, and he staked 40,000 $ETH($124.6M) 8 hours ago.https://t.co/JLwB4bmBtQ pic.twitter.com/HzizTZ01YG
— Lookonchain (@lookonchain) July 11, 2024
Golem, according to Coinbase, is a decentralized computation network aiming to distribute excess computing power to those who need it through a peer-to-peer network that allows its participants to exchange computation.
The protocol’s native token, GLM, facilitates exchange on this marketplace, with users setting bids for GLM they are willing to pay for tasks to be completed for them. Those who complete these tasks are rewarded with those tokens.
On a blog post Golem addressed the Ethereum staking move, noting it’s using a “non-trivial but small portion” of its reserves to initiate “ETH staking tests” to support the project’s growth and development in the future.
The project added it plans to stake part of its ETH reserves to generate yield that will then be used for “operational activities, ecosystem development & building awareness of the possibilities enabled by Golem Network’s decentralized computing platform.”
Golem added that in a bid to show support for Ethereum’s decentralization efforts, it will stake solo – without using a third-party service or another validator.
As CryptoGlobe reported, Ethereum has seen the amount of ETH staked within Ethereum 2.0 surge to a new all-time high of 47.38 million ETH, equivalent to 33.9% of the cryptocurrency’s supply.
According to data from on-chain analytics firm Santiment, the figure has more than tripled from around 10.9% of the cryptocurrency’s supply held in the ETH2 Beacon Deposit Contract two years ago, and now stands at over $140 billion.
Staking in Ethereum 2.0 surged as more users allocated their funds to become validators, who lock up their ETH to help secure the network in its new Proof-of-Stake consensus algorithm. In return, they earn staking rewards, but ETH remains a deflationary cryptocurrency as an earlier upgrade meant transaction fees are burned.
Featured image via Unsplash.