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Initial indications suggest that the successful implementation of Ethereum's smooth Shanghai upgrade has sparked greater interest in staking among institutional investors.
Michiel Milanovic, an analyst at ConsenSys, has reported that institutional-grade ether (ETH) staking service providers are experiencing a substantial increase in inflows this month, which are three times higher than the inflows recorded in the previous month. Milanovic also mentioned that the majority of these inflows, specifically 80%, were observed after the successful implementation of the Shanghai upgrade on April 12th.
The highly anticipated Shanghai (or Shapella) upgrade for Ethereum began on April 12 and allowed for the withdrawal of around 18 million tokens, valued at $35 billion, which were previously locked in staking contracts. Despite concerns that this unlocking could lead to a significant selling pressure and price crash, Ethereum's price actually rallied to $2,100, reaching its highest level in 11 months. However, the token has since dropped below $1,900, in line with the overall decline in the cryptocurrency market.
The option to withdraw tokens has also helped to alleviate liquidity risks associated with staking ETH, which had previously deterred some investors. As Michiel Milanovic noted, "We expect this to naturally increase staking rates after the initial drawdown of ETH from long-term validators"
In February, prior to the Shanghai upgrade, Kiln - an institutional-grade staking service provider - conducted a survey which revealed that 68% of investors expressed their intention to either commence staking or increase their current staked amount following the upgrade.
Kiln's co-founder and chief operating officer, Thomas de Phuoc, stated that the company has recently witnessed a surge of interest in staking, including from traditional finance (TradFi) 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 U.S. or in Europe.”
As per a Dune dashboard analyzed by Dragonfly's crypto venture fund analyst, Kiln has reported $47 million (24,640 ETH) in fresh deposits subsequent to the Shanghai upgrade.
Dune data reveals that Staked.us, a rival platform, has attracted an impressive $111 million (58,592 ETH) in inflows, exceeding the amount of $51 million (26,667 ETH) withdrawn as staking rewards by more than double.
Based on data from Dune, Staked.us has attracted inflows totaling $111 million (equivalent to 58,592 ETH), which is more than twice the amount of staking rewards withdrawn, amounting to $51 million (equivalent to 26,667 ETH). This indicates a strong interest in staking on the platform, as investors are depositing more funds than they are taking out in rewards.
Source Coindesk
