Ethereum Validators See Significant Growth Amid Institutional Adoption

According to Cointelegraph, Ethereum validators have experienced substantial growth over the past year, reflecting the increasing institutional adoption of cryptocurrencies. The number of Ethereum validators surged by over 30%, surpassing one million for the first time in June 2024, up from 824,300 in September 2023, as per a research report from Flipside Crypto. Carlos Mercado, a data scientist at Flipside Crypto, attributed this rise to growing institutional interest driven by developments in the restaking and liquid staking sectors. He explained that liquid staking and restaking have attracted institutions by offering immediate liquidity and enhanced capital efficiency. Restaking protocols allow validators and stakers to restake liquid staking derivative tokens like Lido Staked ETH (STETH) and RocketPool’s rETH to secure and validate other networks. These assets can also be used in other decentralized finance (DeFi) protocols to earn additional yield. The total amount of staked Ether (ETH) increased by more than 27% over the past year, surpassing 34.7 million staked ETH for the first time in September. This growth is attributed to the Shanghai upgrade and the approval of the first Ethereum futures exchange-traded funds (ETFs), which introduced significant growth periods for staked Ether. The Shanghai upgrade, which occurred in April 2023, enabled network participants to unstake their Ether for the first time since the network transitioned to proof-of-stake (PoS) during the Merge. Ethereum’s validator growth is part of a broader increase in staking activities across other blockchains, including Polygon’s PoS network. Polygon wallets involved in staking increased by more than 36.4% over the past year, although the number of Polygon-based validators has remained steady since June, partly due to the blockchain’s validator cap. This cross-chain validator growth indicates that participants are not deterred by the potential for reduced staking returns, as noted in the report.