During the third quarter of 2023, proof-of-stake (PoS) networks have experienced a significant increase in the number of tokens being staked, according to the latest “State of Staking” report published by Staked at Kraken.
This increase reflects the growing confidence of investors in PoS networks and their commitment to their security.
One of the main revelations of the report is that the average staking rate has reached a historic high in the third quarter, reaching 52.4% compared to 49.3% in the previous quarter.
This increase demonstrates a higher interest and participation in the networks, thereby enhancing their security by discouraging malicious behavior.
Among PoS networks with the most staking are Aptos and SUI, with impressive rates of 84.1% and 80.5%, respectively. Mina, Solana, and Cosmos have also shown a strong presence, with staking rates of 77.6%, 71.9%, and 67.6%, respectively.
The report points out that rates tend to increase as investors become familiar with the underlying protocol and are willing to use their tokens to support the network.
However, this increase can lead to a reduction in the average yield, as rewards are distributed among a greater number of validators.
DESPITE THE INCREASE, STAKING YIELDS HAVE DECREASED
This marks a downward trend that has been ongoing since March 2022, when yields peaked at 15.4%.
Polkadot and Cosmos are the only two chains among the top ten that offer yields higher than 7.5%, at 15.1% and 18.9%, respectively.
Ethereum, the second-largest cryptocurrency with a market capitalization of over $200 billion by the end of September, continues to dominate PoS networks with a 79% share.
However, the report highlights that the increase in rates and the growing migration of transaction activity to layer-2 networks have resulted in a staking yield of 4.5% in the third quarter, the lowest on record for ETH.
Overall, the increase in staking rates has boosted the total value of assets at stake, with a 3% increase compared to the previous quarter, reaching as much as $73.5 billion.
However, this positive development has been offset by a decrease in annualized rewards, which fell by 7% from the previous quarter and a more substantial 18% year-over-year, reaching $4.1 billion.