Ethereum Staking Address Now Holds Over Half ETH Supply For First Time Ever: Santiment

Ethereum’s proof-of-stake contract address now holds over half of the Ether supply “for the first time in the coin’s eleven-year history,” reported on-chain analytics provider Santiment on Wednesday.

This appears somewhat misleading, as approximately 37 million ETH are currently staked, representing approximately 30% of the total supply of 121.4 million tokens. However, Santiment explained that there is often confusion about how the proof-of-stake address works. It described the address as a “one-way vault that temporarily locks ETH to help secure the network.”

“When someone stakes ETH, it gets sent into this contract and is removed from normal circulation, meaning it cannot be spent or traded while it is staked.”

Different Methods Of Counting Supply

When validators leave and withdraw, the Ether is released back into circulation as newly issued coins on Ethereum’s main network, “rather than being pulled back out of the vault itself,” Santiment explained.

“As a result, the existing supply can often differ based on whether only pre-burned or total post-burned coins are being counted.”

So over time, the “vault” accumulates ETH without it easily flowing back out the same way it went in, making the contract’s share of the current supply appear larger. This results in a calculation of 50.18% based on ETH issued historically before burns. Santiment predicted that this figure will increase, especially during bear markets and poor trading conditions.

“As staking continues to increase in popularity, expect that this address will continue its ascension, particularly when trading slows down during bear cycles.”

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