More than 10 million ETH have already been moved from the circulating market supply as the staking feature of the second-largest cryptocurrency becomes more popular with every day, IntoTheBlock reports.
Eight figures of Ether are now deposited into the contract, which allows receiving stable income with a certain amount of Ether that gets locked for a minimum of a three-month period. As Coinbase previously reported to its users, after a full switch to a proof-of-stake network, the APY is going to increase from 5% to 12%.
In the last 90 days, the amount of ETH staked has grown by 20%, and 10% in the last 30 days alone. The increased risk-off tendencies also explained such a strong increase in the volume of funds locked in the contract on the cryptocurrency market.
How does the market benefit from Ethereum staking?
The main advantage that the market receives from the feature, which is rapidly gaining popularity among investors, is the decreased selling pressure that comes from the removal of coins from circulation for at least three months.
With fewer funds circulating on exchanges, it becomes significantly easier for the market to push the price of an asset further up even with less buying power.
Previously, the introduction of a burning mechanism for Ethereum affected its movement on the market after the coin rallied by more than 70%. After the update took place on the network, over 1 million ETH worth almost $3 billion have been burned already.
At press time, Ethereum trades at $2,871 and gains 12% in the last four days as the market experiences a slight relief after Bitcoin spiked to $41,500 with the help of retail investors.