- Since 2021, Ethereum validators have earned over 1 million ETH tokens as staking rewards.
- The network has seen a steady increase in the number of validators joining the network throughout this year.
- ETH holders are withdrawing their assets from exchanges due to its deflationary nature.
According to Delphi Digital data, Ethereum validators have earned 1.1 million ETH ($2.007 billion) in staking rewards since January 2021.
Ethereum validators began staking in 2021 shortly after the launch of the Beacon Chain. Since then, their rewards have steadily increased with more validators joining the network.
Ethereum Validators Earnings (Source: Delphi Digital)
Over 67,000 Validators Joined Ethereum in 2023
Ethereum validators grew by over 67,000 new validators in the first 90 days of 2023. At the beginning of 2023, the number of ETH validators was around 495,000 and rose to 562,236 by the end of March according to beacon scan data.
ETH Validators (Source: Beacon Scan)
Interestingly, Ethereum staking is dominated by five assets. This concentration has raised concerns about centralization and censorship risks. However, no censorship concerns have materialized yet as the number of OFAC-compliant blocks on the network has decreased since February.
Meanwhile, over 18 million ETH tokens, representing 15% of the total ETH supply, have been staked. The network has garnered attention with news of the upcoming Shanghai update, which will allow validators to withdraw their tokens.
According to DeFiLlama data, staked ETH on liquidity staking platforms is almost 8 million tokens and worth a total of $14.5 billion.
ETH Holders Turn to Self-Custody
Meanwhile, the supply of ETH on exchanges has dropped to its lowest level due to more holders turning to self-custody. Blockchain analytics firm Santiment reported that only 10.31% of the current ETH supply is on exchanges, the lowest amount since July 2015.
ETH Supply on Exchanges (Source: Santiment)
Many analysts interpret the decrease in exchange outflows as a sign of increased confidence in ETH by investors. Typically, a decrease in exchange supply means that holders are not willing to sell.
The trust in ETH is largely justified as the asset has become deflationary since completing The Merge in September 2022. ETH supply has decreased by approximately 0.12%, dropping to 120.44 million tokens, which means over 74,000 ETH tokens have been burned from the network.
In addition, the asset has grown by approximately 20% in the last 60 days, according to Coinotag data.
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