The equity yield rate of the Proof-of-Stake network hits a historic low.

The Proof-of-Stake network's equity yield rate reaches an all-time low.

Author: Oluwapelumi Adejumo, Cryptoslate

A report from Staked, a non-custodial staking platform owned by Kraken, shows that the average staking yield for the top 35 stakable cryptocurrencies has reached an all-time low due to the increase in average staking rates by investors in the third quarter.

The average staking rate for the entire Proof of Stake (PoS) network has significantly risen to 52.4%, leading to a decrease in yield for these chains to 10.2%, the lowest level in history.

In terms of background, the consensus layer yield for Ethereum (ETH), the largest PoS network in the third quarter, has dropped to a low of 3.2%, while the percentage of staked assets as a percentage of total supply has reached a record high of 22%. According to Staked’s data, the decline in Ethereum’s execution layer is even more pronounced, dropping to 1.3%.

• DeSpread Research Data Analysis of Centralized Exchanges and Investor Behavior in South Korea
• Indian Banks Woo Customers with Rewards to Foster Adoption of Digital Rupee
• Neo Announces NeoGone A Powerful and Exciting EVM-Compatible Sidechain to Safeguard Against MEV Attacks

“High staking rates and trading activity have shifted from the mainnet (L1) to various Ethereum Layer 2 networks (Ls), leading to a staking yield of 4.5% in the third quarter, the lowest level ever recorded for Ethereum.”

Despite the significant increase in Ethereum staking, overall deposit activity has slowed significantly in the past three months, with staking hitting a low point of 1,300 in September.

Staking is crucial in PoS networks as it helps enhance overall security. The process involves holding and locking a specific amount of cryptocurrency for a period of time to help facilitate the operation of the blockchain network and earn rewards.

The potential returns make this venture attractive to cryptocurrency investors, including institutional participants seeking passive income from their holdings. It’s worth noting that despite the bankruptcy of FTX, it still invests $150 million in ETH and Solana tokens to generate additional income, aligning with its commitment to compensate customers.

However, it is important to note that staking activities in the United States are subject to strict regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) classified this activity as securities in a legal lawsuit against cryptocurrency exchange Coinbase and fined Kraken $30 million for failing to register its staking products as securities.

Meanwhile, staking yields on Stake have been in a downward trend since reaching a peak of 15.4% in March last year. Apart from Polkadot (15.1%) and Cosmos (18.9%), the yields for various chains have been steadily declining. This trend could have a significant impact on individual investors and the broader cryptocurrency market.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!