The Ethereum network is witnessing a significant reduction in its validator queue, with waiting times for deployment shrinking from 45 days to just five hours. This is a remarkable change from the peak queue congestion experienced in early June, indicating a potential decrease in staking demand within the Ethereum ecosystem.
The shrinking validator queue marks a notable milestone since Ethereum’s “Shapella” upgrade in April, signifying the blockchain’s full transition to a proof-of-stake network. Presently, only 598 validators are awaiting activation on the network, a substantial reduction from the staggering 96,000 validators queuing a few months ago. Furthermore, there are merely 223 validators in line to stake Ethereum, significantly down from the previous 96,600.
Market observers speculate that the diminishing wait times may be indicative of a weakening demand for staking. Interestingly, demand surged when the Shanghai upgrade was introduced in April, resulting in institutional investors depositing three times the amount seen in the previous month.
The Shanghai upgrade allowed validators to withdraw their staked ETH after a lockup period of more than two years, although most ETH staked at that time was underwater. Despite the recent dip in staking demand, the number of active validators continues to rise, with approximately 857,000 validators on the network, staking around 22% of the cryptocurrency’s total supply.
The shift in demand for staking may be attributed to the increasing popularity of liquid staking platforms like Lido and Rocket Pool, collectively holding a Total Value Locked (TVL) of $15 billion.
