JP Morgan, one of the world’s largest financial institutions , estimates that the arrival of the next Ethereum upgrade, codenamed Shanghai, will encourage more investors to put their money into the protocol. The company believes this number could reach 60% of the Ether issued. This number has already been staked on other blockchain networks.
JP Morgan hopes Ethereum Shanghai upgrade will bring more money to network
Recent report by JP Morgan expected to go into effect in March revealed that the upcoming Shanghai upgrade of the may bring more capital to the network. Investment banks estimate that Shanghai will bring Ethereum’s stake percentage to a number of other popular proof-of-stake networks, which is more than four times what Ether is currently staked.
Report Explanation:
Assuming the staking rate converges over time to an average of 60% of other large networks, the validator The number of will likely increase from $0.5 million to $2.2 million, and the annual yield ofETH will drop from its current 7.4% to around 5%.
Currently, 14% of issued Ether is staked and cannot be withdrawn until the Shanghai update is finally applied. Other protocols such as Solana and Cardano have around 70% of their issuance staked, according to data of staking rewards.
New Staking Trends
JP Morgan also detailed the fate of these new funds, which new investors are presuming will be staking. The company believes most of these funds will be used for platforms such as Lido. This has several advantages over maintaining a hardware infrastructure.
The report states that these platforms “provide equal amounts of derivative tokens in exchange for ETHthat can be traded, thereby increasing liquidity into staking assets locked into staking contracts.” It gives you sex,” he said.
As the report suggests, these derivative tokens can also be placed on various decentralized financial platforms to multiply revenue by staking them. It also makes it easier to circumvent the requirement to stake at least 32 Ether, allowing smaller investors to participate in protocol validation tasks for staking pools.
Exchanges such as Coinbase and Kraken also offer Ethereum staking services, but regulatory headwinds may hinder these services in the US. Kraken recently suspended its staking program in the US and the SEC fined him $30 million for providing unregistered staking services. However, international users can also stake Ethereum tokens using these services.
This new configuration of the staking panorama could lead to a greater concentration of funds in fewer hands, raising concerns about the resilience of these platforms against future attacks.
What do you think of JPMrogan’s predictions for Ethereum staking? Let us know in the comments section below.
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