The crypto market has its eyes set on the Ethereum blockchain after a report from a crypto analytics firm revealed that ETH has been moving off crypto exchanges since the latter stages of February. There has been a huge exchange outflow of ETH whose price looks to have bounced back after a few weeks on reds.
Santiment added that the exchange outflow should help minimize the sell-pressure for ETH as it awaits its imminent Ethereum merge.
Data from several crypto analytic firms also shows that the staking rate of the Ethereum Proof-of-stake contract (previously known as the ETH 2.0 upgrade) has seen an unprecedented rise as inflows have spiked up.
The “staking rate” is a metric that shows how much of Ethereum’s total supply is currently tied up in staking contracts, whereas “ETH 2.0 inflow,” indicates the total amount of coins entering into the contract over a specific period.
“ETH saw an acceleration in Supply on Exchange in early Feb 2022, which quite evidently reflected its sell pressure through February. However, since late Feb, we are starting to see a continued outflow and it’s still ongoing for now, which should help alleviate sell pressure,” Sentiments wrote in the blog post.
Almost 10.7 million ETH worth over $32.5 billion has been locked into the contract at press time, according to Ethereum search engine Etherscan. The aforementioned figure now means that almost 9% of the total supply of the crypto is now locked into staking.
By switching from a proof-of-work to a proof-of-stake consensus process, Ethereum 2.0 intends to address the network’s scalability difficulties. According to Vitalik Buterin, the co-founder of Ethereum, the smart contract platform should eventually be capable of facilitating 100,000 transactions per second via second-layer solutions after the upgrade.
Data from the camp of Ethereum shows that the crypto market’s second-largest coin has effectively burned a total of 2,004,379 Ethereum since its launch. This amount is equivalent to the $6.03 billion that has been permanently removed from circulation.
The Ethereum merge, Ethereum Improvement Proposal (EIP) 1559, an update on the Ethereum Blockchain is set to happen in the second quarter of the year and has been tipped as a major catalyst to send the price of the digital coin to even greater heights.
The merge was however expected to happen months ago but has been delayed due to unforeseen circumstances. Ethereum developer Tim Beiko is however confident that the merge is just a couple of weeks away stating that, “it would take a catastrophic event for it not to happen this year.”
The Ethereum blockchain currently has both a proof-of-work and proof-of-stake chain running in parallel and although both chains have validators, only the proof-of-work chain executes user transactions at the moment.
Once the merge is complete, the Ethereum blockchain will entirely transition to the Beacon Network, a proof-of-stake chain that will make mining obsolete. Ethereum engineers successfully tested the upgrade last week as part of final preparations for the integration, boosting optimism about the upgrade’s possibilities.
