Ethereum (ETH) and Solana (SOL) become the most bet crypto assets
The market value of all staked cryptoassets reaches nearly $95 billion, with ETH and SOL leading the pack.
Ethereum (ETH) takes the trophy of the most staked crypto-asset after the successful consensus layer Merge of the Beacon Chain with the Ethereum execution layer on September 15, 2022, data from StakingRewards.com shows.
The network with the second highest market capitalization for transactions is Solana, at $12.7 billion. Hot on their heels are Cardano with over $11 billion, Binance Smart Chain with over $5 billion, and Avalanche with around $4.6 billion in locked assets. Rounding out the top ten blockchains are Polkadot, Cosmos Hub, Tron, Polygon and Near Protocol. Of the ten most-staked cryptocurrencies by market cap, Cosmos (ATOM) offers the highest return at 17.89%.
Staking, the process of unlocking crypto for an extended period of time to earn rewards, is also a way for transaction validators to vie for a chance to add a new block to the blockchain. A deterministic algorithm chooses a node that has staked the most crypto to validate transactions.
In contrast, mining involves competing for a chance to add a new block of transactions to the blockchain using an energy-intensive computational process that has raised concerns from many quarters, including the Biden administration.
Staking was introduced by blockchain developer Sunny King and Scott Nadal in a 2012 paper as a response to bitcoin’s high energy consumption.
Ethereum is leading the charge as it seeks to become ‘healthy money’
At press time, Ethereum, the world’s second largest cryptocurrency by market capitalization, had 14,545,424 ETH staked, with 430,080 validators and an annual return of 4.1% per year. According to research firm Nansen, most of the ETH currently being staked is not profitable at current Ethereum prices. At press time, Ethereum was trading at $1,360.79, according to Coingecko.
The recent migration of Ethereum from proof-of-work to proof-of-stake introduced a change in the issuance pattern of the cryptocurrency and the possibility of the cryptocurrency gaining the status of “sound money” through the introduction of a supply cap.
Since the merger, 3,095.12 ETH have been injected into the circulating supply. An accompanying “fee burning” mechanism controls supply by removing ETH from circulation. Fee burning was introduced in Ethereum Improvement Proposal 1559 in August 2021.
Withdrawing staked ETH to reap interest will not be possible until after the Shanghai upgrade in early 2023. Becoming a validator on the Ethereum network prior to the merger required staking of 32 ETH. Staking pools also allowed aspiring validators to participate in the race by contributing as little as 0.01 ETH.
According to the chairman of the US Securities and Exchange Commission, the migration of Ethereum to a proof-of-stake blockchain could mean that the coin passes the Howey test, the main test used to assess whether an asset is a security.
Several betting methods are offered
Most staking cryptocurrencies offer various ways to earn staking rewards. Ethereum offers solo staking or running your own validator node. Staking as a service removes the burden of running a validator node, but allows a participant to reap the rewards. Using stake pools is another option, where stakers are issued a so-called ERC-20 liquidity token that represents their stake in ETH.
Solana, the second largest staked cryptocurrency by market cap, offers delegated proof-of-stake, where tokens are delegated to validators running nodes.
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