According to CoinDesk: Coinbase research reported a slackening in investor demand for Ethereum staking yields. The queue for Ethereum blockchain validators, who verify transactions in exchange for rewards, has emptied for the first time since the Shanghai upgrade in May. The Shanghai upgrade was pivotal as it allowed the withdrawal of staked ether for the first time.
Staking yields have descended to roughly 3.5% in the past few months, a significant drop from figures above 5%. Coinbase analysts David Duong and David Han noted that the yield on staked ether provides a minimum threshold for the crypto ecosystem, establishing a benchmark for alternative crypto investments.
Coinbase expects that, assuming network activity and transaction fees stay consistent, staking yields may stabilize due to slowing validator growth. Despite this, total rollup transactions on the Ethereum mainnet increased in Q3, with overall activity remaining steady.
Looking ahead, there are no significant Ethereum protocol upgrades expected until the Dencun update, projected for H1 2024. The Dencun upgrade aims to enhance storage capacity for data and bring down fees on the blockchain via five Ethereum Improvement Proposals (EIPs).
