The official Ethereum Proof-of-Stake (PoS) deposit contract has reached a historic milestone, now holding 77.85 million ETH, which represents 46.59% of the cryptocurrency's total circulating supply. According to on-chain data provider Santiment, this equates to a staggering value of over $256 billion. The balance in the contract has surged by 38.4% over the past year alone, signaling accelerating adoption of Ethereum's staking model.
The deposit contract, formerly known as the Beacon Chain wallet, is designed to hold ETH staked by validators who secure the Ethereum network. A critical feature of this mechanism is that staked ETH cannot be directly transferred to cryptocurrency exchanges. Withdrawals are strictly regulated and occur gradually as validators exit, a design intended to prevent sudden liquidity shocks to the market.
This massive accumulation is viewed by many analysts as a strong indicator of long-term conviction within the Ethereum community. The trend suggests a shift among market participants from speculative trading towards securing network rewards through staking. Institutional participation is a significant driver, with entities like BitMine Immersion Technologies staking over 1.25 million ETH. Staking service provider Lido Finance now manages approximately 24% of all staked ETH.
However, the concentration of nearly half the supply in a single contract has sparked debate. Critics highlight potential liquidity risks; a sharp decline in ETH's price could trigger simultaneous validator exits, creating withdrawal queues and delaying the reintroduction of ETH into circulation, potentially amplifying price volatility. Some observers have also raised concerns about the influence a concentrated staking base could have over the network.
Despite these concerns, Ethereum's price has shown relative stability. After trading between $3,000 and $3,300 in early January, ETH saw a 5% rise to $3,380 on January 14 and was trading around $3,293 at the time of reporting, marking a 6% weekly gain.
