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Ethereum Witnesses Validator Exodus Since Transition to PoS
Summary: According to The Defiant, the number of Ethereum validators has dropped by about 10% since July, falling to levels last seen in April 2024, marking the first sustained validator exodus since the transition to proof-of-stake mechanism. As of November 11, the daily active validators on Ethereum fell below 1 million for the first time since ...
According to The Defiant, the number of Ethereum validators has dropped by about 10% since July, falling to levels last seen in April 2024, marking the first sustained validator exodus since the transition to proof-of-stake mechanism. As of November 11, the daily active validators on Ethereum fell below 1 million for the first time since April 28, currently at 999,203. The queue for exiting validators has reached a historical high of 17.6 days, while the wait time for new validators has surged to 22 days, with approximately 1.2 million ETH waiting to be staked. Clemens Scarpatetti, CEO of CryptoCrew Validators, attributes the decline in active validators to a mix of cyclical and structural factors, including long-term stakers cashing out profits after strong ETH performance in the second and third quarters, as well as significant withdrawals from liquidity staking providers like Lido. The decrease in staking rewards is also a significant factor, with Ethereum's annual staking yield currently around 2.9%, a sharp decline from the record 8.6% in May 2023. Meir Rosenschein, Product Director at DcentraLab, notes that the decrease in staking rewards and rising borrowing costs make leveraged staking unprofitable. Data from Dune shows that decentralized staking protocol Lido leads the market with over 8.4 million ETH, representing over 23% of the market share. Binance and Coinbase hold approximately 9.2% and 6.5% of the staked ETH share respectively.
