Ethereum staking allows users to participate in the network's security and operations by locking up ETH as collateral in exchange for rewards. After the successful shift from proof-of-work (PoW) to proof-of-stake (PoS) via the Merge, validators now confirm transactions and create new blocks based on how much ETH they’ve staked rather than computational power.
Staking helps secure the Ethereum network, and stakers earn rewards in ETH, which provides a steady income stream. This has made ETH an attractive option for long-term holders, especially institutional investors looking for yield. The more ETH that gets staked, the less there is in circulation, effectively reducing market supply. This scarcity dynamic can contribute to a higher eth price, especially when paired with growing demand from DeFi and Web3.
Moreover, with platforms like Lido and Rocket Pool offering liquid staking, users can earn staking rewards without locking their ETH completely. This flexibility has expanded participation, further tightening supply.
Staking also aligns ETH more closely with traditional financial assets like bonds, as it offers predictable yield with lower volatility. As staking continues to gain traction, the economic model supporting ETH becomes more deflationary and robust. For those interested in how staking affects Ethereum’s value over time, the most reliable way to stay informed is by tracking the real-time eth price on Toobit.