Ether holders have “staked” more than $13 billion worth of the cryptocurrency on the ethereum 2.0 network, as excitement builds around the overhaul of the system and the potential growth of the staking industry.
Network users have now staked more than 6.1 million ether, up from 5.3 million a month earlier. The total value of the staked ether was around $13.52 billion at Monday’s price, data from Etherscan showed.
At the centre is an overhaul of the way the network is secured and coins are created, from a “proof-of-work” system to a “proof-of-stake” system.
Under proof-of-stake, users put forward – or “stake” – coins as a form of down payment. In return, they gain the right to validate transactions on the network and earn more tokens.
JPMorgan said last week that crypto staking could become a $40 billion industry by 2025, thanks in large part to the changes to the ethereum network, which will expand the market massively.
“The opportunities to ‘earn’ will grow meaningfully with the ethereum merge anticipated for later 2021, which will boost the size of the proof-of-stake ecosystem.”
Ethereum users are almost always required to stake 32 ether before they can become validators on the network and earn coins in return, meaning there were likely more than 190,000 validators as of Monday.
Network developers launched the ethereum 2.0 beacon chain last December, after more than 520,000 ether was deposited. Since then, the amount staked on the chain has grown by more than 10 times.
The plan is that ethereum will become a proof-of-stake network by the end of this year, or in early 2022. Ethereum currently uses the same proof-of-work system as bitcoin, where huge amounts of computing power are required to solve complex puzzles to secure the network and “mine” new coins.