By Franklin Smith
The community has retained a positive sentiment since the conclusion of the ETH Merge, especially stakers.
These categories eventually saw bullish moves in the APR (annual percentage rate) earned through ETH staking post-Merge. Meanwhile, can the ETH and stETH peg witness some upsides? Or history repeats.
Shoulder to Shoulder
The latest market developments had Ethereum revamping its protocol from a PoW to a PoS mode. Moreover, one of the primary after-Merge takeaways remains the validator reward pool, which witnessed a substantial upsurge.
Since the upgrade, stETH gradually regained ground, returning to par with Ethereum after spending about four months beneath the peg. Consequently, Lido staking APR soared to 5.52% from 3.85%. The metric has stayed at hiked zones since. Remember, stETH or Lido Stake Ethereum is an ERC-20, liquid coin representing Lido-staked Ether.
Market players can redeem stETH for Ether on a 1:1 basis after the upcoming Ethereum upgrade – Shanghai update. The upgrade would allow stake ETH withdrawals. Meanwhile, developers have scheduled the Shanghai upgrade for 2023.
The future redemption tool pegs stETH value to Ether on 1:1. Nevertheless, it broke the peg in May this year, as stETH traded at the 0.93 lows per Ether on June 20. However, the successful Merge upgrade enhanced market faith in staked Ethereum. That saw the peg returning.
Figures in Check
Nansen, an on-chain analytic platform, revealed colossal inflows into stETH after the Merge, supporting the narrative highlighted above. For example, stake Ether coins such as Lido’s stETH recorded inflows of more than $33 million seven fat following the notable Merge.
Talking about figures, the market capitalization of staked cryptocurrencies touched $94 billion (data from StakingRewards.com. Moreover, the network’s staked volume ramped substantially two weeks following the Merge.
Investors transferred around 150,000ETH, worth about $195 million, to ETH 2 deposit contracts within the previous week.
That welcomed the new ATH of 139 million Ethereum staked, according to Glassnode insights. In that context, enthusiasts should beware of potential peg fall, similar to May 2022 occurrences.
Meantime, the leading alt, ETH, sees continued declines on its price charts. The token changes hands at $1.3K during this publication, losing over 12% since early this month. So, it is about time for stakers to wear safety nets.