Jun 4, 2024 - Economy

Charted: 🥩 A staking benchmark

A line chart shows a periodic rate of the average annualized yield awarded to eligible validators staking ether on the Ethereum blockchain from Sept. 16, 2022, to May 30, 2024. The rate rises sharply during certain events to as high as 8%-plus and has been trending downward lately to a recent 3.4%.
Data: CoinFund and CoinDesk indices; Chart: Axios Visuals

An index called CESR (said like the salad), or the Composite Ether Staking Rate, aims to show what rate people committing their ether are getting on average.

  • There are many staking service providers out there, and the rates they pass on to their customers vary. So the CESR aims to make the take more transparent.

What we're watching: If ether ETFs sans staking end up being extra good for ether investors who aren't in those ETFs, a theory we reported on, the yield on this thing should go up as the new funds start to see meaningful inflows.

Reality check: There are multiple factors that determine Ethereum's staking rate, like the amount of ether staked, and network activity. That explains late 2022/early 2023 peaks when staking rates jumped as high as 8%, according to CoinFund president Chris Perkins.

The big picture: 👆 Perkins explained why establishing a benchmark staking index was important to him.

  • "We need a standardized rate that everyone can observe."
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