Ethereum Locks Over Half of Supply in Historic Staking Milestone
Ethereum has crossed a historic threshold, with more than half of its total supply now held inside the network’s proof-of-stake contract for the first time in its 11-year history.
Key Takeaways
The milestone underscores how dramatically the network’s structure has evolved since transitioning to staking, tightening liquid supply while reinforcing validator participation.
On-chain data shows that over 50% of all ETH ever issued is now locked in the staking contract. This mechanism acts as a one-way vault: once ETH is staked, it is removed from active circulation and cannot be traded or transferred until a validator exits. Even then, withdrawals are issued as newly unlocked coins on the main network rather than directly pulled from the contract balance, creating nuances in how circulating supply is calculated.
Supply Dynamics Shift as Staking Accelerates
The 50.18% figure is based on ETH issued historically before burn adjustments. With roughly 120 million ETH currently existing on the network after burns, the share locked in staking represents a significant contraction in freely tradable supply.
Analysts note that staking participation tends to rise during slower market periods, particularly in bearish cycles when speculative trading declines. As yield-seeking behavior increases, more ETH flows into validators instead of exchanges, potentially dampening volatility over time.
At the same time, supply accounting remains complex. Because withdrawals introduce newly issued ETH into circulation while the contract balance remains structurally large, headline supply figures can vary depending on whether pre-burn or post-burn metrics are used.
Privacy Upgrade Emerges at the Transaction Layer
Beyond staking growth, Ethereum is also advancing a new infrastructure-level development aimed at improving on-chain privacy. A proposal known as ERC-5564 introduces stealth address functionality, enabling transactions that obscure the direct link between sender and receiver while preserving auditability.
Unlike traditional privacy coins or simple obfuscation tools, the mechanism is designed to operate within Ethereum’s public framework. It allows programmable privacy – meaning transactions can remain verifiable without publicly exposing relational metadata.
Supporters describe the upgrade as a missing piece for institutional and enterprise adoption, where transactional confidentiality is often a prerequisite. By embedding privacy capabilities directly into the transaction layer, Ethereum could expand its appeal without compromising its transparent base architecture.
Infrastructure Evolution Continues
The combination of shrinking liquid supply and enhanced transaction privacy signals a broader maturation phase for Ethereum. With staking locking up record amounts of ETH and protocol-level upgrades reshaping usability, the network appears to be strengthening both its economic and technical foundations.
As trading activity ebbs and flows, staking participation may continue climbing – reinforcing Ethereum’s shift from a high-velocity asset toward a yield-bearing, infrastructure-driven ecosystem.
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