ETH staking rewards are decreasing due to the network's self-regulating mechanism
Ethereum [ETH] staking rewards continue to decline by design, as the total effective amount of ETH staked increases. This reflects the decreasing reward distribution model, which aims to maintain balance in the ecosystem. Today, long-term investors still hold ETH in staking contracts to ensure stable returns and maintain trust in the network.
Impact of increasing total ETH staking on rewards
During this period, the ETH staking reward rate was reduced to 2.987% per annum on June 17, according to Beaconcha.in. This process is a result of a self-regulating mechanism that ensures a fair distribution of rewards as the total amount of ETH staked grows rapidly. This encourages long-term investors to maintain ETH in the network without worrying about excessive inflation.
In the competitive landscape, other staking acceptance chains such as Solana [SOL] with 7.54%, Polkadot [DOT] 11.82%, and Cosmos Hub [ATOM] 20.2%, all have higher inflation rates than ETH, 4.5%; 7.78% respectively, and it cannot be ignored that the Ethereum ecosystem still holds the leading position in terms of usage intensity and network legitimacy.
Source: Glassnode
Long term progress of investors believing in network operations
Approximately 29% of the total circulating supply of ETH, equivalent to 34.9 million ETH, is locked in staking contracts, reflecting the strong confidence of long-term investors in the Ethereum blockchain platform. This amount has contributed to the foundation of the PoS model, reducing the possibility of inflation and maintaining the momentum of financial growth.
Stablecoin Profits and DeFi Markets: Direct Competition and New Opportunities
Yield-bearing stablecoins like USDe [SUSDE], a leading yield-bearing stablecoin by market cap, currently yield around 5.81%. Historically, the token has yielded between 10% and 25% APY, providing an attractive passive Yield channel amid volatile crypto markets.
Source: Stablewatch
DeFi lending platforms and their outstanding profit potential
DeFi lending protocols like Aave [AAVE], MakerDAO [MKR] (now rebranded as Sky), and Compound [COMP] all attract investors by allowing them to deposit digital assets in liquidity pools. Borrowers can take out loans against crypto collateral, creating a comprehensive ecosystem. Currently, AAVE has a staking reward rate of 4.63%, surpassing ETH's 3%.
This market has accounted for 55.8% of the total value locked (TVL) on the Ethereum network, showing a strong shift towards DeFi platforms. This has led to a surge in transaction volume and network fees, contributing to the long-term value of ETH in this large ecosystem.
Source: https://tintucbitcoin.com/lai-suat-eth-duoi-3-thi-truong-tien-dien-tu/
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