Author: Tanay Ved, Matías Andrade Source: Coin Metrics Translation: Shan Ouba, Golden Finance
Ethereum has 34.4 million ETH staked (28% of current supply), while Solana has an active staked supply of 297 million SOL (51% of current supply) due to the lower barrier to entry for delegators.
Ethereum has a larger validator set with 1.07 million validators, while the more hardware-demanding Solana has 5,048 validators but over 1.21 million delegators.
Ethereum’s nominal staking yield of 3.08% (2.73% inflation-adjusted) is the benchmark for on-chain economies. Solana offers a higher yield of 11.5% (12.5% effective), but delegators earn less than validators due to a different reward structure.
Ethereum’s ongoing issuance results in an annualized inflation rate of 0.35%, while EIP-1559’s burns typically result in deflationary periods. Solana follows an epoch-based inflation schedule, with a current annualized inflation rate of 4.7% and set to stabilize at 1.5%.
Ethereum and Solana are the two largest Proof-of-Stake (PoS) blockchain networks, each taking a different approach to reaching consensus and securing their ecosystems. Both rely on staking, requiring participants to submit their native tokens, ETH or SOL, to validators who play a critical role in maintaining the integrity of the network. To incentivize honest participation, stakers can earn staking rewards that align their behavior with the best interests of the network.
This yield enhances their appeal as cash flow generating assets, acting as a benchmark interest rate in the on-chain economy, similar to U.S. Treasuries in traditional finance.
Since the introduction of the Beacon Chain (the consensus layer) in December 2020, there are currently 34.4 million ETH staked on the Ethereum network. 28% of ETH’s current supply of 120.4 million is staked (also known as the collateralization rate), while 72% remains unstaked, in smart contracts and externally owned accounts. While Ethereum’s collateralization rate grew rapidly from 14% to 28% after the Shapella upgrade, the ratio has remained around 28% as demand for staking has cooled.
Source: Coin Metrics Network Data Pro
To become a validator on the Ethereum network, participants must contribute 32 ETH As collateral, or to provide smaller denominations of ETH to staking pools or exchanges that manage aspects of staking operations. This 32 ETH is also known as the maximum effective balance of a validator, which will change to a maximum of 2048 ETH in the upcoming Pectra upgrade. Ethereum currently has 1.07 million active validators, a number that is expected to decline as validator integration proceeds.
Today, the nominal staking yield on ETH is 3.08%, while the actual (inflation-adjusted) yield is 2.73%. Ethereum's base staking yield has declined over time as the amount of ETH staked increases. These rewards come from two main sources, reflecting Ethereum's modular design: consensus layer rewards and execution layer rewards.
Validators receive consensus layer rewards for their role in securing the network, including attesting and proposing new blocks. These rewards are funded through newly issued ETH, contributing to network inflation and forming a more predictable revenue stream. On the other hand, execution layer rewards are tied to changes in blockspace demand and include priority fees and Maximum Extractable Value (MEV). During periods of increased activity, such as the increase in blockspace demand in March, the actual staking APY surged to 6.2% and exceeded 5% on August 5, 2024, thanks to higher priority fees and therefore execution layer rewards.
Source: Coin Metrics Network Data Pro
Staking yield can be assessed in nominal or real (inflation-adjusted) terms to assess the rewards for participating in the Ethereum consensus process. This helps stakers or investors understand their true rate of return and compare it to holding unstaked ETH. More broadly, the ETH staking yield is a benchmark interest rate for the on-chain economy, similar to the reference to U.S. Treasury yields in traditional finance. It provides a way to compare risk-free rates and staking yields, highlighting opportunities in both the on-chain and off-chain ecosystems.
Source: Coin Metrics Network Data Pro
This staking yield may further enhance ETH’s ETF ETH staking yields also underpin several DeFi primitives, such as liquid staking tokens as yield collateral, as well as stablecoins such as Ethena’s USDe and re-staking ecosystems such as EigenLayer.
Source: Coin Metrics Network Data Pro
Solana Staking Overview
Solana uses a “delegated proof of stake” (DPoS) consensus mechanism. This allows validators and delegators (SOL holders who contribute stake to the validator) to stake SOL. Together, these tokens make up the validator’s “stake”, which determines their influence in the consensus process and their ability to validate blocks.
Unlike Ethereum, Solana has no minimum balance requirement to participate in staking. This low threshold allows it to have a relatively high staking rate of 51%, with 297 million SOL currently actively staked out of a total supply of 589 million SOL. Active staking is calculated based on validators and delegators who received rewards in the most recent period, excluding those who did not receive rewards or exited before the end of the period.
Source: Coin Metrics Network Data Pro
Therefore, there are 1.22 million stakers on Solana, of which 1.21 10,000 are delegators. However, the number of validators is much smaller at 5,048. This is likely because running a Solana validator requires high-performance infrastructure and a large amount of SOL staked. The network uses a leader-based consensus process where individual validators are assigned to process blocks based on a rotation schedule. Leadership is determined by stake weight, ensuring that validators with more stake have more influence.
Source: Coin Metrics Network Data Pro
Solana uses an inflation model to distribute staking rewards, issuing SOL once every epoch (approximately 2-3 days). This results in the "waves" of new issuance in the chart below. 2021 started with an inflation rate of 8%, which is expected to decline by 15% per year and is currently at 4.7%.
Staking yields come primarily from inflation rewards distributed on this schedule, supplemented by 50% base fees, all priority fees, and MEV. It is also worth noting that 92% of staking on Solana uses the Jito validator client, which provides additional extra-protocol economic incentives to validators through tips. While Solana has also seen growth in liquidity staking on protocols such as Jito and Marinade, their adoption rates are still low compared to Ethereum.
Source: Coin Metrics Network Data Pro
Solana nominal staking APY is currently The current APY is 11.5%, while the actual (inflation-adjusted) APY is 12.5%. These yields have recently increased due to a surge in priority fees in November as Solana network activity increased. As shown in the chart below, delegators have a lower yield (currently around 6.7) and are rewarded only from new issuance, while validators benefit from issuance, fees, commissions charged to delegators, and their own staked SOL. This structure highlights the additional incentives to run a validator, which comes with higher operating costs and favors validators with the largest stake.
Source: Coin Metrics Network Data Pro
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