Analysis of Factors that Drive Ethereum Staking Deposit and Withdrawal Trends across Various Staking Participant Groups
30 Pages Posted: 11 Oct 2024
Date Written: August 13, 2024
Abstract
Staking has always played a crucial role in securing the Ethereum Network thus understanding staking behavior and the factors that drive participant deposits and withdrawals are critical to maintaining network stability and security. Whether these stakers are participating through centralized exchanges, staking pools, liquid staking tokens, liquid restaking tokens, or as solo stakers, they play a pivotal role in supporting the network’s decentralization and resilience. Through our research, we have found multiple features that are indicative of Ethereum staking deposits and withdrawal behavior both for overall trends and for specific categories of stakers. Our dataset, which combines on chain staking/withdrawals data with both Ethereum specific indicators and macro indicators, allowed us to shed some light on key drivers to both staking and withdrawal trends. Our results demonstrate a certain level of cyclical nature and stationary for staking behavior, particularly for non-Solo stakers. We also find Ethereum specific features such as Ethereum token price and gas prices to be key drivers for overall staking behavior. It is worth noting that solo staking behavior in particular are the toughest to predict and do not demonstrate the same cyclical nature that other participant groups show. On the other hand, withdrawals are much less cyclical in general and are affected by Ethereum specific features such as gas price and Ethereum price but are less sensitive than deposits. However, withdrawals are sensitive to the price and volume of US Treasuries.
Keywords: Ethereum, Staking, Incentives, Inventive Design, DeFi, Decentralized Finance, Crypto, Blockchain
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