Key Points
- The waitlist for Ethereum validators has reached its highest point since October 2023, with over 7,045 validators waiting to stake their Ether.
- The backlog represents over 225,000 Ether, equivalent to $562 million, and is expected to be cleared in just over 48 hours.
- Ethereum imposes limits on the number of new validators per epoch, leading to backlogs as an Ethereum epoch lasts for 6.4 minutes.
- Validators stake a minimum of 32 ether in the Ethereum network to contribute to the operation of Ethereum’s proof-of-stake consensus blockchain.
- Despite the increase in staking activity, the Ether staking rate has not significantly increased and remains between 3.5% and 4%.
- The Ethereum non-fungible token (NFT) market is experiencing a surge in trading activity, with the highest weekly volume since February 2023.
The Ethereum network has seen a surge in the number of validators wanting to stake their Ether (ETH).
The validator entry queue, tracked by ValidatorQueue, has reached 7,045, the highest level since October 6.
This backlog represents over 225,000 Ether, equivalent to $562 million.
It is expected to be cleared in just over 48 hours.
Ethereum sets limits on the number of new validators that can join the network per epoch, or the time taken to process blocks on the blockchain.
As a result, a backlog forms because an Ethereum epoch lasts for 6.4 minutes.
Validators are participants who stake a minimum of 32 ether in the Ethereum network.
This allows them to contribute to the operation of Ethereum’s proof-of-stake consensus blockchain.
In return for staking their ether, validators earn a consistent rate of return similar to interest income from traditional fixed-income assets like bonds.
David Lawant, head of research at crypto exchange FalconX, noted that the resurgence in Ethereum staking activity indicates initial signs of renewed energy within the network.
Ether Staking Rate Hasn’t Appreciated
For the fourth consecutive month, the Ether staking rate has remained relatively stable, standing between 3.5% and 4%.
Thus, it offers little to no premium or incentive compared to the risk-free rate of 4.17% available on the 10-year U.S. Treasury note.
Despite a noticeable increase in the number of stakers wanting to join the network, the current count is significantly lower than the over 75,000 participants observed following Ethereum’s Shapella upgrade in April of last year.
The Shapella upgrade notably allowed for the withdrawal of staked ether for the first time, reducing the risk associated with locking coins in exchange for rewards.
In early January, there was a temporary surge in the waitlist for validators wanting to exit the network.
This was prompted by failed crypto lender Celsius announcing its intentions to unstake its entire ether holdings.
Ethereum NFT Trading on Rise
The Ethereum non-fungible token (NFT) market is seeing a surge in trading activity.
It has reached its highest weekly volume since February 2023.
Data from CryptoSlam indicates a remarkable 100% increase in NFT sales on the Ethereum network over the past week, totaling $158 million.
This surge in Ethereum NFT volume coincides with the growing popularity of the Pudgy Penguins collection, currently ranked third by market capitalization.
Pudgy Penguins is rapidly closing the market cap gap with its competitor, the renowned Bored Ape Yacht Club collection, owned by Yuga Labs.
Yuga Labs, also the creator of Cyberpunks with the highest floor price in the market, is actively developing Pudgy World, an interactive gaming experience slated for release on the Apple Vision Pro.
Meanwhile, Yuga Labs is also progressing on the Otherside metaverse, with plans for a third “trip” test on the horizon.
