Ethereum staking sees notable pullback as market shifts toward new opportunities

The percentage of ETH staked has declined to 27%, returning to levels last observed in July 2024 and declining for the first time since the peak of 29% reached in late 2024. 

At time of writing, 33.5M ETH is staked on the Ethereum network, highlighting the substantial portion of supply dedicated to network security. While this decline represents approximately a two percentage decline from peak staking levels, this is the first time we’ve had a decline since staking began growing in popularity in May 2023.

However, liquid staking derivatives (LSDs) continue to maintain their prominence in the Ethereum staking ecosystem. Lido remains the dominant liquid staking protocol, controlling about 69% of the LSD market. Binance's staked ETH holds the second position with approximately 15% market share, indicating significant concentration among major providers. Lido generated $89 million in revenue in January 2025, consistent with its 12-month average of around $85 million.

While Ethereum continues to serve as critical infrastructure for DeFi and NFTs, recent market attention has gravitated toward other protocols and ecosystems. This trend may reflect investors seeking higher returns in other ecosystems and protocols or reducing staked positions to participate in other market opportunities. Additionally, the maturation of the staking market following the initial enthusiasm post-Merge could be contributing to a more measured approach to ETH staking.

The staking landscape's evolution presents both opportunities and challenges for the network. Despite the recent decline, the current 27% staking rate represents robust network security through proof-of-stake validation. 

However, the concentration of staked ETH among major LSD providers, particularly Lido's dominant position, remains a key point of discussion in the broader conversation about network decentralization. This concentration could become more significant if the staking participation rate continues its downward trend. As the Ethereum ecosystem continues to evolve, the dynamics between staking rates, protocol dominance, and network security will likely influence both protocol development and investor behavior.

This is an excerpt from  The Block's Data & Insights newsletter . Dig into the numbers making up the industry's most thought-provoking trends.