last week The Ethereum blockchain’s carbon footprint is expected to drop by 99% following The Merge, where the transition to stake supports both retail and institutional investors. And it could have a significant impact on the crypto economy. followBitwise reported on Tuesday.
The company expects Ethereum to gain a 4%–8% gain for long-term investors through stakes Ether (ETH), while JP Morgan analysts predict total returns from stakes on the PoS blockchain. will double to $40 billion by 2025
Users who stake crypto assets are rewarded — known as rewards — from transaction fees paid by other network users. Seen by some as a form of passive income, stakes require users to lock their assets in a smart contract, but during that time the coins cannot be used or traded on the market. And this is probably one of the main challenges in deploying PoS blockchains, especially for institutional investors.
In his Q2 earnings report, Coinbase CEO Alesia Haas noted that: Acquisition of institutional crypto assets could be a “phenomenon” of the future as soon as the market overcomes the liquidity lockdown.
Industry players have also proposed a number of solutions. To address the lack of liquidity of the coins being staked, Alluvial on Sunday has announcedLaunched a liquid collective enterprise and multichain protocol with Coinbase and Kraken as integrators, Coinbase Cloud and Figment as validators. The solution aims to provide institutions with a viable liquid staking solution.
Alluvial CEO Matt Leisinger said in a statement, “Proof of Stake accounts for more than half of the total crypto market capitalization, but there is still no viable option for institutional token holders to participate in liquid investments. staking”
However, stakes can also lead to centralization issues. According to an analysis from Santiment, 46.15% of Ethereum’s PoS nodes are controlled by just two addresses owned by Lido and Coinbase, respectively, holding 30.8% and 14.7 percent of ETH’s stake.
As more stake providers enter the market Not only institutional holders will benefit. But the risk may be reduced. and will have better network flexibility According to Bitwise analysis
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