Ethereum’s switch from Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS) is yet to take place, via the much-anticipated ETH 2.0 upgrade.
But as the platform slowly changes, deposits in staking contracts on Beacon Chain have been steadily increasing since November 2020, reaching nearly 13 million ETH.
Most of the deposits took place before the price of Ether rose to highs above $4,800. However, the profitability of those coins has fallen sharply amid the bear market, according to analytics platform Glassnode.
According to a report published by the firm on Wednesday, the majority of the stakeholders are “underwater”, with only 17% of the coins betting on ETH/USD gains above $1,100 at current levels.
,Ethereum 2.0 stakeholders have deposited over $12.98M ETH, of which 62% flowed in prior to November ATH. However, with the price of $ETH falling by over 78%, and unable to withdraw the coins, only 17% of $ETH is in profit,
The USD value of deposited ETH has also fallen sharply, down from its November peak of $39.7 billion. Currently, this value is below $14 billion, representing a decline of 65.2%.
no withdrawal yet
ETH 2.0 deposits account for approximately 11% of the cryptocurrency’s circulating supply.
Ethereum holders continually deposit their coins into Beacon Chain contracts as they seek to benefit from the rewards of running a validator. To do this, a staker needs to deposit 32 ETH, with pool staking available along with solo staking.
But the ETH at stake has not yet been withdrawn. All holders who buy and bet near ATH can see that the bear market erodes the value of their tokens.
Notably, deposits in ETH 2.0 contracts have fallen in recent months. During the bull run, 32 ETH deposits had daily volumes ranging between 500 and 1,000.
It has declined significantly, with the weekly average now at around 122 per day.