Glassnode: Ethereum staking inflows declined ahead of Shapella

Growth of staking deposits in Ethereum declined due to regulatory pressure and the approaching Shanghai-Capella (Shapella) hard fork, according to Glassnode experts.

Deposit trends by staking providers have exhibited a clear shift over time with Kraken, Binance and Coinbase jousting for deposit allocations across the Beacon Chain’s early days.

As the dust settled between the three giants, it was Lido who emerged victorious, continuing to… pic.twitter.com/yp50NWQ5XJ

— glassnode (@glassnode) April 9, 2023

Developers planned the upgrade on April 12. In March the Ethereum team conducted the Shapella hard fork on the Goerli testnet. Previously — activated the update on the Sepolia test network. The hard fork includes changes to the consensus and execution layers. Its main objective is to enable withdrawals of ETH from staking.

Glassnode specialists reminded that centralized platforms like Kraken, Binance and Coinbase competed for staking inflows since the Beacon Chain’s early days. However, they lost a significant market share, while the DeFi platform Lido has increased it.  

„When the dust settled among the three giants, it was Lido that emerged victorious, continuing to dominate deposits inflows to this day“, — the experts noted.

According to the dashboard on Dune Analytics, 18.2 million ETH are locked in staking — more than 15% of the coin’s supply. Deposits were made by nearly 102,000 addresses.

Over 26% of the total staking crypto is on Lido, Coinbase accounts for about 6%, Kraken around 2.3%.

In February Kraken settled the accusations by the U.S. Securities and Exchange Commission (SEC) regarding the exchange’s staking service. The agency classified the service as an unregistered securities offering. The crypto platform agreed to close the program and pay a $30 million fine.

In March the regulator made similar allegations against the largest US exchange Coinbase.

SEC Chair Gary Gensler suggested that all tokens on the Proof-of-Stake consensus mechanism could be considered securities under US law.

Coinbase CEO Brian Armstrong said the company is prepared to defend its staking program in court.