By press time, ETH was trading at a new record price of $2,582 based on data provided by CoinMarketCap. The high value means that more people are staking their ETH holdings to earn rewards. The significant value shows that the ongoing Ethereum 2.0 upgrade has elevated the network as a critical alternative to other established Proof-of-Stake (PoS) networks like Cardano. The upgrade that began in December 2020 has gained massive support from the ETH community based on the rate of activity on the network. Notably, the ETH community staked more than 1 million Ethereum within the first week of December 2020 to support the network upgrade. With the Ethereum 2.0 protocol, miners on the network rely on stakers who hold some ether to process new transactions. The new blockchain is more efficient and scalable than the initial proof-of-work network.
Increasing activity on the ethereum network
The rise in ethereum’s value is also a direct impact of the platform’s growing usage in the dApp ecosystem that competes with the use case for ether as a staking asset. Furthermore, the performance of ethereum correlates with the increased activity in the DeFi market. With increased improvements on the network, the DeFi market statistics are witnessing a boost. Worth mentioning is that price movement might impact the value of the staked ethereum. However, the increase in value of staked assets indicates that Ethereum 2.0 has ushered in trust for the asset’s future prospects of the network. Once the PoS becomes fully operational, the value will potentially soar further. The ethereum network upgrade is also attracting institutional adoption of the second-largest cryptocurrency. For example, Grayscale now has more than 3 million ETH under management. To learn more about staking check our cryptocurrency staking guide. [binance]
