Are Crypto Staking Rewards Losing Their Allure?

A noteworthy shift has taken place in the cryptocurrency sector today.

Analyst Ignas, known for expertise in decentralized finance, revealed that the staked tokens of EigenLayer (EIGEN) have surpassed its available circulating supply. This development reduces the allure of staking rewards and may impede the growth of altcoin prices.

Current data indicates that approximately 2.42 billion EIGEN tokens are staked, whereas only 1.86 billion are actively circulating. This difference arises because investors can stake their “locked” tokens, meaning those not currently traded in the market contribute to the staking pool.

Additionally, the high volume of staked tokens compared to the circulating supply results in diminished annual percentage yield (APY) rates. When APY is lower, new investors may lose interest in acquiring the asset for staking, further complicating efforts to boost the altcoin’s market value.

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These dynamics are essential for grasping the mechanics of staking within the cryptocurrency ecosystem. Although users pursue passive income through staking, the rewards can become less enticing when a significant portion of coins is locked, thereby restricting potential price increases.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.