As per the recent development, the Ethereum network noticed a sharp increase in staking rewards, as they achieved an annual yield of almost 8.6%. This new record has paved the way toward a sharp surge in the on-chain gas fees, propelled by the ongoing meme coin trend within the market.
It has been reported that Ethereum validators have seen a considerable increase in their total earnings, as they have managed to gain a whopping total of $46 million within the first week of May. The current figure represents a 40% hike from the $33 million generated within the final week of April. Furthermore, these earnings nearly translate to approximately 25,000 ETH pocketed by investors within only a week.
It is widely believed that the widespread craze surrounding the new meme coin, PEPE, is the major reason behind the increased rewards for Ethereum validators. Within the previous week, the average transaction fees on the Ethereum network have crossed the 100 gwei mark, which is something that has not been seen since May 2022.
As gas fees continue to increase, end users are bound to pay over $30 per swap, inevitably resulting in a higher fee income for validators from processing both transactions and the regular rewards.
As the market continues to trade in the red, Ethereum (ETH) has been seen to maintain its composure. Currently, the token is up by 1.43% in the last 24 hours, pushing the trading price to $1,873. Similarly, the total market cap of ETH is $225 billion.
Ethereum Continues to Push Forward
The current staking rate is responsible for the provision of an estimate of the annualized return that the validators can anticipate. In order to engage with the consensus process of Ethereum, validators are required to take a minimum of 32 ETH, which currently accounts for $59,000.
Apart from that, the rewards for Ethereum validators can be classified into two types, consensus, and transaction fee rewards. Consensus rewards are for proposing and attesting a series of blocks, whereas transaction fee rewards are for processing transactions on the Ethereum Network.
Over the course of time, Ethereum staking has established a considerable percentage of relevance for institutional investors following the network’s transition to a proof-of-stake consensus mechanism. At the same time, the recently released Shapella Upgrade has also boosted its relevance by enabling validator withdrawals for the very first time. As of now, 19 million ETH, worth $34 billion, have been staked by a total of 560,000 validators.
