Ethereum Lowers the Yield as the Staked Pool Grows Bigger

Ethereum seems to keep a lid on yields with the increasing usage and popularity of staking.

As per recent data, Ethereum is worth $2 billion, and over 14 million ether (ETH), are deposited on its blockchain, data shows. But it diminishes the yield as the staked pool gets larger.

Ethereum staking has become the most common way for crypto traders to generate yield. However, this is turning out to be the actual reason it is driving the yields lower, despite its growing popularity.

Experts have pointed at the formula as the reason, stating that its old ‘proof-of-stake’ model-based calculation is leading to Ethereum lowering the yield.

The staking yields are awarded in ether (ETH), and the whole amount available for staking yields is then divided among all the accounts that are being staked. This means the more ether that’s sent to the blockchain for staking, the lower the percentage available for each staker.

Data as per Coinbase Institutional reveals that the staking yield after the merge comes around 4%- 5%, which is below the 9%-12% that analysts had initially forecasted.

This may come as a surprise to most of the crypto and NFT traders but the data revealed by Coinbase Institutional clearly points in that direction, and the numbers quite frankly speak volumes about the lowered percentage situation post-merge.