Staked Ether (ETH) surpassed an all-time high, with over 35 million coins locked in Ethereum’s proof-of-stake (PoS) model, according to Dune Analytics data.

This represents approximately 28.3% of the total Ether supply being immobilized in smart contracts. Investors earn passive returns by staking, contributing to the network’s security.

The increasing participation signals a shift in investor sentiment, suggesting many are choosing to hold their ETH rather than sell at current market prices. This trend is particularly evident in the first half of June, with over 500,000 ETH staked, contributing to a reduction in the liquid ETH supply.

The trend may be bolstered by improved regulatory clarity in the United States. In May, the SEC explicitly stated that certain “protocol staking activities,” like depositing ETH into a validator for delegation, don’t constitute a securities offering and therefore don’t require registration. This guidance eased concerns about compliance and has encouraged participation.

However, delays from the SEC regarding the approval of Ether Staking ETFs continue to impact institutional participation, although the regulatory development acts as a positive catalyst.

Lido, a liquid staking protocol, facilitates nearly 25% of the staked supply. Major players like Binance (7.5%) and Coinbase (7.4%) hold significant portions of staked ETH, but the rise of liquid staking protocols has fueled debate due to potential centralization risks, as it reduces the theoretical node operator pool.

This secularity shows significant protocol staking activity, which relieves pressure on liquid ETH through institutional adoption.

Despite criticism from decentralization advocates, liquid staking has proven attractive to institutions.