Crypto staking demand grows as yields decline across Ethereum, Solana

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Crypto staking demand grows

Highlights

Ethereum staking hits a record 43.8 million ETH, 35.9% of supply, while Solana active stake reaches 440.5 million SOL in Q4.
Ethereum's gross annualized staking yield drops to 2.63% in Q3 from 2.81% in Q2 as rewards are spread over more staked capital.
Ethereum processes 199.3 million Q3 transactions, up 35.3% year-over-year, but daily network fees and ordering revenue fall 40.2% quarter-over-quarter to 198 ETH.

Staking participation rises as access improves

As reported by CoinDesk, investors are committing more tokens to staking on major blockchains despite lower gross annualized yields, as easier access and a more established role for staking in crypto portfolios support demand.

Kam Benbrik, head of on-chain research at Bitwise, said Ethereum now has 43.8 million ETH staked, equal to 35.9% of total supply, the highest level in its history. Solana’s active stake also climbed to 440.5 million SOL, according to Bitwise’s Q4 staking report.

Industry executives say staking is becoming a standard part of holding digital assets rather than a short-term yield trade. A Coinbase spokesperson said staking exchange-traded funds and digital asset treasuries are broadening access, while John Zettler, senior director of product at Payward Services, said clients usually stake assets they already own after making investment and custody decisions.

Zettler said staking demand often strengthens in weaker markets because buy-and-hold behavior increases, putting downward pressure on yields. Kean Gilbert, head of institutional relations at Lido Ecosystem Foundation, said institutional discussions are increasingly centered on implementation issues such as validator diversification, code audits and how much of a fund is staked.

Falling returns put staking economics under pressure

Higher participation is also spreading rewards across a larger base of staked capital, reducing returns on major networks. Ethereum’s gross annualized staking yield averages 2.63% in the third quarter, down from 2.81% in the second quarter.

Ethereum records net staking inflows of 1.99 million ETH in the third quarter, marking its sixth consecutive quarter of positive inflows, with Bitwise pointing to institutional participation including treasury company Bitmine’s growing position. Even so, the mix of staking rewards remains important because user fees reflect transaction activity, while token issuance adds supply and can dilute holders unless token burning offsets it.

Blockchain activity is rising, but that is not fully translating into stronger staking income. Ethereum processes 199.3 million transactions in the third quarter, up 35.3% from a year earlier, yet network fees and transaction-ordering revenue average 198 ETH a day, down 40.2% from the previous quarter.

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