The quest for staking ether (ETH) has seen a dramatic surge, leading to wait times stretching over a month for a 5% annualized yield as of the latest reports. Crypto investors holding ETH are finding themselves in a nearly month-long queue before they can be established as network validators on Ethereum.
According to data from multiple sources, the wait times for staking ether currently hover around 640 hours, which is approximately 26 days. In stark contrast, exiting the network is a swift process, taking less than a minute or about 0.013 hours.
Validators are crucial components of a proof-of-stake blockchain like Ethereum. They process transactions and contribute to the overall security of such networks. As of May, almost 50,000 validators are queued up, eagerly waiting to enter the network, according to the data.
This surge in demand to become validators and earn the attractive near 5% annual yield is likely fueled by large ether holders. These investors prefer to hold onto their ether and earn passive income, rather than cashing out.
Some market observers suggest that these potential validators could be a blend of new market entrants and existing stakers. The latter might have previously unstaked their ether from the network to verify the seamlessness of the process and are now reentering.
Matt Leisinger, co-founder at staking protocol Alluvial, stated, "Following the Shapella upgrade, there was a significant amount of demand pressure from stakers who had been locked up for over 18 months and perhaps wanted to exit their staked ETH position."
He further explained, "This demand has since decreased as those stakers have all exited their position, and we are now witnessing an upsurge in demand for staking from what we can deduce are new participants entering the market for the first time."
The Shappella upgrade, a blend of Shanghai and Capella, two significant Ethereum network upgrades that took place simultaneously on April 12, allowed investors to withdraw their staked ether at their discretion for the first time.
