Kaiko: The ETH staking market has cooled down and supply growth has stabilized

Odaily News According to a report recently released by Kaiko, the staking ETH market cooled in 2024. Since August, the average ETH validator queue time has been less than one day, and rarely exceeds four days throughout the year-significantly shorter than the peak of 45 days in June 2023. Exacerbating this situation is the decline in ETH staking rewards. Currently, ETH staking yields are lower than those offered by other major L1 protocols such as Cosmos, Polkadot, Celestia, and Solana, which offer rewards between 7% and 21%. While staking inflows have begun to decline, the supply growth of the largest Ethereum staking participants has stabilized. The supply of Lido staking ETH stETH has remained relatively stable this year, averaging 9.6 million ETH. This reflects the slowdown in the total amount of ETH deposited in the beacon chain contract, which has increased by about 5.7 million ETH this year after nearly doubling last year. Lido's stETH accounts for about 28% of the total staking ETH market and has only increased by 5% so far this year, far lower than 90% in 2023. stETH remains widely used as collateral in DeFi, with Lido being the largest DeFi protocol by TVL. However, competition between protocols has intensified with the emergence of new projects with higher returns such as Spark and Morpho, as well as re-collateralization alternatives such as ether.fi. (w)stETH deposited on lending protocol Aave as a percentage of the total stETH supply on Ethereum has fallen from 20% to around 13% in 2023, remaining relatively flat this year. In addition to competition at the external protocol level, stETH is also facing increasing competition as collateral in DeFi protocols, with the share of (w)stETH deposits on Aave falling from 46% at the beginning of the year to 27% as of last week.