The largest staking platforms for institutional investors recorded three times more new deposits than last month, early veri shows.
The largest staking platforms for institutional investors recorded three times more new deposits than last month, early veri shows.
Early signs show that Ethereum’s seamless Shanghai upgrade has spurred institutional investors’ interest in staking.
Top institutional-grade ether (ETH) staking service providers have already recorded about three times larger inflows in April compared to all of last month, Michiel Milanovic, analyst of Ethereum blockchain developer firm ConsenSys, told CoinDesk. Some 80% of the inflows happened after the Shanghai upgrade went live on April 12, he added.
Ethereum’s highly anticipated tech update, often referred to as the Shanghai or Shapella upgrade, enabled withdrawals of some 18 million tokens, worth $35 billion, previously locked up in staking contracts starting April 12. After the upgrade, ETH’s price rallied to $2,100, its highest level in 11 months, defying earlier concerns that the unlocking could lead to significant selling pressure and a price crash. The token recently has dropped below $1,900, aligning with a broader crypto market decline.
Allowing withdrawals also reduced the liquidity risk associated with locking up ETH for staking, which have kept some investors at bay before. “We expect this to naturally increase staking rates after the initial drawdown of ETH from long-term validators,” Milanovic said.
According to a survey by Kiln, an institutional-grade staking service provider, 68% of investors said that they intend to start staking or increase their staked amount after Shanghai. The survey was conducted in February, before the Shanghai upgrade.
Thomas de Phuoc, Kiln’s co-founder and chief operating officer, said the firm experienced a fresh wave of interest in staking, even from traditional finance firms.
“Our sales team noted 60% more deals in the pipeline than at the same time last year, including from traditional institutions,” Phuoc said. “We are discussing at the moment with some brokerage firms, investment banking services holding companies in the US or in Europe.”
Kiln has recorded $47 million (24,640 ETH) of new deposits since the Shanghai upgrade, according to a Dune dashboard by crypto venture fund Dragonfly’s analyst.
Recommended for you:
Rival platform Staked.us booked $111 million (58,592 ETH) inflows, more than double than the $51 million (26,667 ETH) of staking rewards withdrawn, per Dune veri.
Still, it is still early to draw definite conclusions, Milanovic noted, because not all staking providers have enabled withdrawals immediately.