Ethereum’s Staking Crisis: Is Your ETH a One-Way Ticket?

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Finance

What to know:

  • More than half of all ether ever issued has passed through Ethereum’s proof-of-stake deposit contract, but analysts say this overstates how much ETH is actually locked. Because nothing says “trust me” like a 50% figure that’s actually 30%.
  • On-chain data show about 37 million ETH, or roughly 31% of the total supply, is currently staked, far below the roughly 80 million ETH that have cumulatively entered the Beacon deposit contract. Oh, you thought that 50% was a permanent lock? Wrong. It’s more like a temporary parking spot for your ETH.
  • The milestone underscores staking’s growing role in Ethereum’s economics, with some investors likening ETH to a “digital bond” even as critics warn that large players now dominate validator growth. Because nothing says “financial innovation” like a system where the big guys get all the perks.

Ethereum has crossed a symbolic threshold, with more than half the total ether (ETH) issued now held in its proof-of-stake (PoS) contract for the first time in the network’s 11-year history, Santiment said in a post on X that has been met with criticism. Because who wouldn’t want to be criticized for something that’s technically true but also completely misleading?

The onchain analytics firm on Tuesday said that 50.18% of all ETH issued historically is now sitting in the staking deposit contract. The figure reflects cumulative ETH that has flowed into the contract since staking was introduced ahead of the network’s 2022 transition from proof-of-work to PoS. Because nothing says “progress” like a system where the numbers are more about drama than actual value.

According to CoinDesk data, the total supply of ether is 120.69 million tokens. Bitmine, the world’s largest ether-focused treasury firm, has 4.29 million ETH, of which 2.9 million is staked. According to Arkham data, the largest holder is the Eth2 Beacon Deposit Contract with 77.1 million or over 60% of the total supply. It holds the most because it serves as the central, mandatory gateway for staking to secure the blockchain. Because nothing says “central, mandatory gateway” like a system that’s more complicated than your average tax form.

While the tokens are staked, they cannot be transferred or traded. Withdrawals have been enabled since the Shanghai upgrade in 2023, allowing validators to exit and return ETH to circulation. Because who needs liquidity when you can just keep your ETH in a vault that’s technically open but also kind of not?

That distinction prompted some analysts to caution against interpreting the 50% figure as a permanent supply lock. Because obviously, nothing says “permanent” like a number that’s already been proven wrong.

‘Inaccurate and materially misleading’

“The post is inaccurate, or at least materially misleading,” Luke Nolan, senior research associate at CoinShares, told CoinDesk. “It references the one-way deposit contract used for ETH staking, but does not account for withdrawals. While ETH is sent into that contract when validators stake, it is not a permanent sink.” Because, of course, nothing is ever permanent in the crypto world-except maybe the confusion.

Since withdrawals were enabled, ETH can exit the validator set and re-enter circulation, meaning that looking at the deposit contract balance alone can overstate the amount effectively staked, Nolan said. Because why track the actual numbers when you can just throw a 50% figure out there and let the chaos ensue?

“There is also an important nuance around the numbers being cited,” he added. “It is not correct to suggest that over 80 million ETH are currently staked. Roughly 80 million ETH have passed through the staking contract historically, but the amount actively staked today is closer to 37 million ETH, which is around 30% of the current circulating supply. That distinction materially changes the narrative.” Because nothing says “narrative” like a 30% figure that’s still way more than most people can handle.

Aleksandr Vat, BizDev at Ethplorer.io, agreed with Nolan and provided CoinDesk with supporting data reinforcing that distinction. Because of course, data is always the answer-unless it’s not.

The Beacon deposit contract balance on the Etherscan tracker, currently around 80.97 million ETH, reflects cumulative deposits since launch and does not decrease when validators exit. Withdrawals are processed by minting ETH back to execution-layer addresses rather than subtracting from the deposit contract itself, Vat said. Because why make it simple when you can make it a bureaucratic nightmare?

According to active staking metrics, approximately 37,253,430 ETH are presently staked, based on data from Ethplorer and CryptoQuant, implying that staking represents 30.8% of the total supply. Because 30% is just enough to make you feel like you’re part of something big, but not enough to actually matter.

Santiment’s 50% figure appears to compare the cumulative Beacon contract balance to historically issued supply prior to EIP-1559 burns, Vat said. While that may be mathematically consistent depending on the denominator used, it does not represent the amount of ETH currently locked or removed from circulation, he noted. Because math is just a suggestion in the crypto world.

Ethereum matures into ‘digital bond’

Even so, the milestone highlights how central staking has become to Ethereum’s economic design, Vineet Budki, partner and CEO at Sigma Capital, told CoinDesk. As participation rises, a larger share of ETH earns yield through validator rewards, reinforcing its positioning as a yield-bearing crypto asset, he said, adding he sees the development as evidence of Ethereum’s maturation into what he called a “digital bond.” Because nothing says “maturity” like a system where your money is locked up and you’re just hoping it doesn’t disappear.

“Ethereum’s milestone of 50% staked supply marks its evolution into a digital bond, where the network’s security is fueled by long-term conviction rather than short-term speculation,” Budki said. “By locking half the total issuance in a one-way vault, the protocol has engineered a structural supply crunch.” Because who doesn’t want a structural supply crunch? It’s the new black.

Budki also pointed to accelerating network activity, including a 125% year-over-year increase in daily transactions, a doubling of daily active addresses and an increase in tokenized real-world assets, much of it occurring on layer-2 networks that settle back to Ethereum’s base layer. Because nothing says “growth” like a system that’s just getting more complicated by the day.

Nolan noted, however, that recent validator growth has been concentrated among large participants. Because of course, the big players always get the best deals.

“A significant portion of recent validator entries has been driven by large entities such as Bitmine and U.S.-listed ETFs, which have taken up a notable share of the entry queue,” he noted. Because nothing says “fairness” like a system where only the biggest names get to play.

With staking levels continuing to climb, the debate shows just how Ethereum’s supply metrics, and how they are presented, can significantly shape market narratives, Budki concluded. Because who needs transparency when you can just twist the numbers to fit your story?

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2026-02-18 20:46