Ethereum’s staking queues have emptied — and that subtle shift is changing the ETH trade. After months of a rush to lock up ether, the network can now add and remove validators almost in real time. Those queues — the waiting periods to start or stop staking — are used by markets as both sentiment and liquidity gauges. When they’re long, supply is effectively being locked faster than the chain can onboard validators, creating a scarcity narrative. With queues now near zero, staking is moving from a scarcity trade toward a steady-state, more like a liquid, yield-bearing allocation than a one-way bet. What’s happening under the hood - The absence of queues is a sign Ethereum can absorb staking inflows and exits without freezing up liquidity for weeks — a feature, not a bug. Smooth withdrawals make staking feel less like coins being stuck and more like a position that can be resized as sentiment changes. - Staking rewards have compressed toward roughly 3% as total staked ETH has grown faster than issuance and fee income. That lower yield both reflects crowding and represents a higher “trust premium”: more ETH is choosing to sit in staking rather than on exchange order books. - The net effect: “staking pressure” is no longer a daily market narrative. Staking still reduces immediate sell pressure, but it no longer functions like a forced lockup that mechanically deprives markets of supply. Where the macro picture stands - Roughly 30% of ETH is currently staked — well below Galaxy Digital’s forecast of 50% by the end of 2025. Galaxy’s bullish scenario, which expected staking-driven supply shocks pushing ETH above $5,500 and layer-2s to overtake layer-1s in economic activity, has not materialized. - Ethereum’s DeFi TVL is about $74 billion today, down from a roughly $106 billion peak in 2021, even as daily active addresses have nearly doubled over the same period (per DeFi Llama). Ethereum still accounts for roughly 58% of total DeFi TVL, but that headline masks an increasingly fragmented landscape. Fragmentation and value capture Activity is growing across the broader crypto ecosystem — Solana, Base and even bitcoin-native DeFi are seizing incremental growth. That matters because Ethereum’s older bull case was straightforward: more usage → more fees → more burns → structural supply pressure for ETH. Now, much of the incremental activity happens on layer-2s where fees are cheaper and user experience is smoother, and that activity doesn’t always translate into visible value capture for ETH on spot markets. As Bradley Park, founder of DNTV Research, put it: “If ETH is treated primarily as a trust asset to be staked rather than actively used, it weakens the burn mechanism: less ETH gets burned, issuance continues, and sell-side pressure builds over time.” Park also noted that “Over the past 30 days, Base has generated significantly more fees than Ethereum itself,” a contrast that raises questions about whether Ethereum’s current trajectory channels usage back into value for ETH. Market sentiment and the path forward That disconnect between activity and price shows up in prediction markets. On Polymarket, traders assign just an 11% chance that ETH will reach a new all-time high by March 2026 — despite higher user activity and Ethereum’s still-dominant share of DeFi TVL. The market seems to be pricing fragmentation and abundant staking supply as dampening forces: usage alone may no longer be enough to drive a retest of the ATH. A potential game-changer would be regulatory or policy changes — notably in the U.S. — that open the door to yield-bearing ETH products. Such a shift could reawaken the staking-premium narrative by making staked ETH more attractive to institutional flows. Bottom line Queues cleared, yields compressed, participation high but fragmented: Ethereum is no longer a simple scarcity story. Staking has become a more mature, liquid component of the ETH market, and the token’s next leg up now depends as much on how network activity converts into economic value for ETH as it does on raw usage statistics. Read more AI-generated news on: undefined/news

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