Let me start this article by saying Ethereum has brought A LOT to the crypto world. If it wasn't for Ethereum I honestly believe we wouldn't have many of the things we currently have today and NFTS, DeFi would have really struggled to make a name for themselves.
Moving on from that we also need to dive into the massive changes that have been happing on the Ethereum blockchain. From a once Proof of work platform to a now Proof of stake platform Ethereum has gone through drastic changes.
One of the issues found with Poof of Stake is the centralization that happens but I would argue myself that it's the same if not a little more decentralized compared to the proof of work days when mega companies launched warehouses of mining hardware just for Ethereum.
One issue that comes to be is that staked tokens can only do one thing. Be staked and collect around a 4% APR while being locked up. Something many people may not want to do.
A new trend has been starting to take off called restaking. It allows ETH token holders to deposit or otherwise known as stake tokens on the Ethereum network but still allow them to be reused for other applications and networks.
I wrote a bit about this two weeks ago in an article Liquid Staking Tokens The Next Evolution?
The big plus here is that ETH stakers will now be able to use these tokens in other places to generate additional revenue so that once 4% could now be double that or even higher in some cases.
When we take a look at beaconcha.in we can see that Ethereum has been on a steady rise of new validators and how much ETH has been staked.
A rather large amount of ETH staked currently at 23.5 million of the total 120 million ETH in circulation.
The main benefit of this which is being created by a group called EigenLayer is that applications can now quickly spin up validator nodes to be used instead of trying to reach out and get others on board. While I understand that having friction creates security it also creates negatives and it's something I see here on the Hive blockchain. Where only a few people look at proposals and new projects and the rest just never see the light of day due to how hidden or unknown they are.
How it all works?
We can also see that this project has been starting to get a rather decent amount of funding in terms of people using it. Looking at DeFiLlama we can see it jumped from 20million in value up to 80 million in value in just a few days.
It will be interesting to watch how this new liquid staking feature works and if it starts to create exploits and issues with major centralization of the proof of stake network.