Ethereum has crossed a symbolic threshold, with more than half of the total issued ether (ETH) now held in its proof-of-stake (PoS) contract for the first time in the network’s 11-year history, Santiment said in an article on X that drew criticism.
The on-chain analytics firm said Tuesday that 50.18% of all historically minted ETH is now in the staking deposit contract. This figure reflects the cumulative ETH that has been integrated into the contract since the introduction of staking ahead of the network’s 2022 transition from proof of work to PoS.
According to CoinDesk data, the total ether supply is 120.69 million tokens. Bitmine, the world’s largest ether-focused treasury company, owns 4.29 million ETH, of which 2.9 million is staked. According to Arkham data, the largest holder is deposit contract Eth2 Beacon with 77.1 million, or more than 60% of the total supply. It holds the most because it serves as a central and mandatory gateway for staking to secure the blockchain. Beacon is followed by Binance with 4.1 million ETH, BlackRock with 3.4 million, and Coinbase with 2.9 million.
While tokens are in play, they cannot be transferred or exchanged. Withdrawals have been allowed since the 2023 Shanghai upgrade, allowing validators to exit and put ETH back into circulation.
This distinction has prompted some analysts to caution against interpreting the 50% figure as a permanent lock in supply.
“Inaccurate and materially misleading”
“The message is inaccurate, or at least materially misleading,” Luke Nolan, senior research associate at CoinShares, told CoinDesk. “It refers to the one-way deposit contract used for staking ETH, but does not account for withdrawals. Although ETH is sent into this contract when validators stake, it is not a permanent sink.”
Since withdrawals were allowed, ETH may leave the validator set and re-enter circulation, meaning that simply looking at the deposit contract balance may overestimate the amount actually staked, Nolan said.
“There is also an important nuance in the figures cited,” he added. “It is not accurate to suggest that more than 80 million ETH is currently staked. Approximately 80 million ETH has historically been staking, but the amount actively staked today is closer to 37 million ETH, or approximately 30% of the current circulating supply. This distinction significantly changes the narrative.”
Aleksandr Vat, BizDev at Ethplorer.io, agreed with Nolan and provided CoinDesk with supporting data reinforcing this distinction.
The balance of the Beacon deposit contract on the Etherscan tracker, currently around 80.97 million ETH, reflects cumulative deposits since launch and does not decrease upon release of validators. Withdrawals are processed by sending the ETH back to the execution layer addresses rather than subtracting it from the deposit contract itself, Vat said.
According to active staking metrics, approximately 37,253,430 ETH are currently staked, based on data from Ethplorer and CryptoQuant, implying that staking represents 30.8% of the total supply.
Santiment’s 50% figure appears to compare the cumulative balance of the Beacon contract to the historical supply issued before the EIP-1559 burns, Vat said. While this may be mathematically consistent depending on the denominator used, it does not represent the amount of ETH currently locked or removed from circulation, he noted.
Ethereum becomes a “digital link”
Still, the milestone underscores how central staking has become to Ethereum’s economic design, Vineet Budki, partner and CEO of Sigma Capital, told CoinDesk. As participation increases, more of ETH generates returns through validator rewards, strengthening its positioning as a yield-bearing crypto asset, he said, adding that he sees the development as evidence of Ethereum’s maturation into what he called a “digital bond.”
“Ethereum’s milestone of a 50% staked supply marks its evolution into a digital bond, where network security is fueled by long-term conviction rather than short-term speculation,” Budki said. “By blocking half of total emissions in a one-way vault, the protocol has caused a structural supply crisis.”
Budki also highlighted the acceleration in network activity, including a 125% year-over-year increase in daily transactions, a doubling of daily active addresses, and an increase in real-world tokenized assets, most occurring on layer 2 networks that flow back to Ethereum’s base layer.
Nolan noted, however, that recent validator growth has been concentrated among large participants.
“A significant portion of recent validator entries have been driven by large entities such as Bitmine and US-listed ETFs, which have taken up a notable share of the entry queue,” he noted.
As staking levels continue to climb, the debate shows how Ethereum’s supply metrics, and how they are presented, can significantly shape market narratives, Budki concluded.
