- Staking yields for the big cryptocurrencies have dropped; Ethereum and Polkadot have seen significant declines.
- Despite changes in the market, solana’s staking yield held steady and its price increased significantly.
Over the last year, the amount of money cryptocurrency users may earn by staking some of the most well-known digital assets has fallen precipitously. For instance, the return on Ethereum (ETH) staked has dropped from above 5% to about 3.18% as of writing.
Major cryptocurrencies are no longer as often staked to generate income on their holdings, according to CCData. For example, yields on individuals holding Cardano (ADA) decreased from 3.35% in May 2023 to 3.07% as of May 16, 2024.
The biggest overall drop among the cryptocurrencies monitored was seen in Polkadot (DOT), sometimes known as the blockchain of blockchains, as staking yields fell from slightly over 22% to 18.64%. Yields for Avalanche (AVAX) likewise fell, from 7.05% in May 2023 to 6.42% as of writing.
Strong Solana Despite Falling Yields
Rival Ethereum’s staking yield, Solana (SOL), has held steady, rising from about 7.5% in May 2023 to almost 7.7% at the time of writing. Given the wider tendency of falling yields, this steadiness is significant.
CoinMarketCap data shows that the price of SOL at the time of writing was about $162.28, up 3.67% from the previous day. This also shows a solid position over the last seven days, up 8.88%.
Knowing Staking and Its Effect
Owners of cryptocurrencies can take part in the Proof-of-Stake consensus mechanism of a network and get rewards via staking. Although many liquid staking systems let token holders get a liquid derivative token when locking their tokens to stake, staked tokens are typically locked while receiving rewards, echoing earlier coverage by ETHNews.
Some staking services, such those frequently provided by centralised cryptocurrency exchanges, may charge fees on the staking earnings in return for the service, therefore lowering the yields that investors get from these platforms.
The staking yields have decreased, but during the last year, the cryptocurrency market has grown significantly. A noteworthy rally that saw the price of Bitcoin hit an all-time high above $73,500 before suffering a pullback saw the market add over $1 trillion.