Ethereum has crossed a symbolic threshold, with more than half of the total ether (ETH) issued now contained in its proof-of-stake (PoS) contract for the first time in the network’s 11-year history, Santiment said in a post on X that has been met with criticism.
The Onchain research firm said on Tuesday that 50.18% of all ETH issued historically is now sitting in the staking contract. The number reflects cumulative ETH that has flowed into the contract since staking was introduced ahead of the network’s 2022 transition from proof-of-work to PoS.
According to CoinDesk data, the total supply of ether is 120.69 million tokens. Bitmine, the world’s largest ether-focused treasury company, has 4.29 million ETH, of which 2.9 million have been staked. According to Arkham data, the largest holder is the Eth2 Beacon Deposit Contract with 77.1 million or over 60% of the total supply. It lasts the most because it acts as the central, 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 staked, they cannot be transferred or traded. Withdrawals have been enabled since the 2023 Shanghai upgrade, allowing validators to exit and return ETH to circulation.
This distinction led some analysts to caution against interpreting the 50% figure as a permanent supply lock.
‘Inaccurate and materially misleading’
“The post 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 ETH staking, but does not account for payouts. Although ETH is sent into that contract when validators stake, it is not a permanent wash.”
Since payouts were enabled, ETH can leave the validator set and re-enter circulation, meaning that looking at the deposit contract balance alone could overstate the amount actually staked, Nolan said.
“There is also an important nuance to the numbers being quoted,” he added. “It is not correct to suggest that there is currently over 80 million ETH staked. Historically, roughly 80 million ETH have gone through the stake contract, but the amount actively staked today is closer to 37 million ETH, which is about 30% of the current circulating supply. That distinction changes the narrative significantly.”
Aleksandr Vat, BizDev at Ethplorer.io, agreed with Nolan and provided CoinDesk with supporting data that reinforced this distinction.
The Beacon deposit contract balance on the Etherscan tracker, currently around 80.97 million ETH, reflects cumulative deposits since launch and does not decrease when validators exit. Withdrawals are processed by bouncing ETH back to execution-layer addresses rather than deducting from the deposit contract itself, Vat said.
According to active stake metrics, around 37,253,430 ETH are currently staked, based on data from Ethplorer and CryptoQuant, suggesting that stakes represent 30.8% of the total supply.
Santiment’s 50% figure appears to compare the cumulative Beacon contract balance with historically issued supplies prior to EIP-1559 flares, Vat said. While that 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 matures into ‘digital bond’
Still, the milestone highlights how central effort has become to Ethereum’s economic design, Vineet Budki, partner and CEO at Sigma Capital, told CoinDesk. As participation increases, a greater share of ETH earns returns through validation rewards, strengthening its positioning as a return-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 50% staked supply marks its evolution into a digital bond where the security of the network is driven by long-term conviction rather than short-term speculation,” Budki said. “By locking half of the total issuance in a one-way box, the protocol has created a structural supply crunch.”
Budki also pointed to accelerating 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, much of which is happening on layer-2 networks that back up to Ethereum’s base layer.
However, Nolan noted that recent validator growth has been concentrated among large participants.
“A significant portion of recent validation entries have been driven by large entities such as Bitmine and US-listed ETFs, which have taken up a notable share of the access queue,” he noted.
With stake levels continuing to rise, the debate shows how Ethereum’s supply metrics and how they are presented can significantly shape market narratives, Budki concluded.
