When it comes to blockchains, there are many metrics that determine whether one is in a good state or not. Of course, many people watch the value of the blockchain’s native token but other things need to be taken into account.
A good example of this is Ethereum. While its native token saw a slight slump at the end of August 2023, other industry metrics are reporting positively. More specifically, Ethereum’s staking rate has remained high despite the price dip. This would indicate that Ethereum users are still staking, i.e. committing their tokens to the network for certain periods of time to support validator efforts.
While a price spike would be nice, a high staking rate shows immense market confidence in Ethereum. Simply put, users believe in the future of the blockchain and are willing to put their money where their mouth is. A high staking rate during this time shows that the blockchain is reliable even amidst the volatility of the market and has been proven to be safe.
Beyond being a testament to how far Ethereum has come, this development also has implications for those who use Ethereum.
First, the high staking rate means that transactions initiated on the Ethereum blockchain will be fast and efficiently processed. A lot of people staking on Ethereum means that the network has enough validators and staking pools to confirm transactions in a good amount of time. Needless to say, we won’t likely see a network slowdown for a while.
It also means that Ethereum as a network is more secure. Networks with high staking rates are less likely to suffer attacks or have fraudulent transactions approved.
This is especially good for people who use its native currency and need to transfer it back and forth for any reason. Take gambling, for example. If you take a look at the list of Ethereum gambling platforms on InsideBitcoins, you’ll see that many gambling sites let people access services through Ethereum.
To do this, people will need to move Ethereum from their wallets to the sites and back. With the high staking rate and subsequent fast network speeds, this can be done in no time at all. This also applies to those who use Ethereum to pay for products, pay bills, and much more. Overall, those who spend Ethereum will benefit immensely.
This goes for non-financial transactions as well. Ethereum is the foundation for a plethora of applications and products, and they all need the blockchain to function properly to survive. A high level of reliability and network security means that everyone who relies on Ethereum can rest assured that their needs will be taken care of.
This development also benefits those who use Ethereum as a speculative asset. Yes, the price of the token has dipped but a high staking rate means that there is market trust in the blockchain. And when the market believes in a blockchain this much, its native token price will not stay down for long.
Some investors could look at the current situation as an opportunity to accumulate Ethereum before the next price rally. Usually, a price slump for a token would be a poor sign for the future. But in Ethereum’s case, its maintaining a high staking rate during a price dip means that it is seen as a worthwhile project in spite of current market conditions and will be here for a long time.
A blockchain that is reliable is one that you want to invest in and, hopefully, reap the rewards of.
