Ethereum: Rewards drop to low level, What's next to ETH

Listen to this article

Ethereum: Rewards drop to low level, What's next to ETH

The Ethereum [ETH] staking reward is not something to look forward to despite a 6% increase since the consolidation. According to a recent tweet from Messari, ETH inflation has dropped to almost zero, which has affected the chances of getting a higher reward. 

However, that is not the only reason. The crypto intelligence platform further noted that underperforming maximum extractable value (MEV) momentum also contributed to the drop. This is because MEV allows validators to earn high rewards. In turn, help stakeholders get more value.



Has ETH rallied again?

On the plus side, it seems validators are rarely affected by the drop in MEV. This is because Transparency Flashbots showed that ETH paid them for keeping the MEV gain forward. At press time, the total amount of ETH paid to validators is 919.45 ETH. Compared to October 21, it is 596.16 ETH.

Source: Transparency Flashbots

Also, the suggested block rate remains unchanged at 100%. However, the diminishing block reward for average prosperity could be a cause for concern. According to the smart contract transparency report, the proposed block rewards 0.029. With the fee, the respawn of the staking bonus is very high.

transparent flashbots

With the bet getting less and less profitable, it translates into a reduced bet deposit. According to Glassnode, the ETH staking deposit figure is 826 at press time. The number dropped by 1,088 on Oct. 18. This means there is less staking and validation, resulting in fewer people getting involved in securing the ETH network. 

As a result, there are some blocks lost while validator efficiency is increased. With an engagement rate of 99.3%, it is expected that the reward for staking will improve. This forecast is due to the active participation of validators in approving and obtaining more blocks of transactions.

Source: Glassnode

What is the position for ETH?

At the time of writing, ETH is trading at $1,303. Data from CoinMarketCap shows that the king of altcoins has lost 0.12% of its value in the past 24 hours. Furthermore, ETH has lost 20.96% of its volume over the same time period, according to data from the price tracking platform. Based on its next move, ETH may remain in favor of the bears in the short term. 

This is because of the indicators from the Directional Movement Index (DMI). According to the DMI, sellers of ETH (red) have a solid advantage over buyers (green). With sellers holding a DMI of 27.24, ETH buyers may need more effort than the 14.69 value to regain control. However, ETH buyers will not only have to fight against sellers. With the Average Directional Index (ADX) at 31.95, a rally seems highly unlikely. 

Source: TradingView


Oct 24, 2022

4 0