Ethereum Staking Deposits Experience Setback Amid Regulatory Pressure and Shapella Upgrade

According to recent data from on-chain analytics provider Glassnode, there has been a slight decline in Ethereum staking deposits in recent weeks. The reason behind this decline is attributed to increased regulatory pressure and the upcoming Shapella upgrade on April 12. The Securities and Exchange Commission (SEC) in the United States has been actively regulating the crypto industry, and although there is no official legislation classifying ETH as a security, the SEC has taken measures to crack down on staking. As a result, deposit activities have been affected.

Glassnode has reported a decline in Ethereum staking deposits recently due to the upcoming Shapella hard fork on April 12 and increased regulatory pressure. The upgrade will allow for phased release of staked ETH on the Beacon Chain. Additionally, centralized exchanges like Coinbase, Binance, and Kraken have lost market share to Lido, a liquid staking platform that dominates deposit inflows and currently accounts for almost a third of the total amount of ETH staked, which is around $11 billion from 5.9 million ETH.

Coinbase charges a high 25% commission on staking rewards, with even higher commissions for other assets like Cardano and Solana. On the other hand, Lido charges a lower 10% commission and provides the opportunity to earn extra yields on DeFi platforms with its staking token, stETH. As a result, many stakers have switched to Lido for better profitability.

Experts anticipate that liquid staking platforms like Lido will benefit from the release of ETH from the Beacon Chain after the Shapella upgrade. Ultrasound.Money, an Ethereum metrics tracking platform, reports that there are currently 18.1 million ETH staked, amounting to $33.7 billion and representing 15% of the total supply. Following the upgrade, the staked ETH will gradually become available for withdrawal in the coming weeks and months.

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