With just a few weeks to go before the merge event, the number of weekly deposits to Ethereum’s Beacon Chain has fallen to its lowest ever level. As Dune Analytics data shows, there are less than a month left until Ethereum transitions to proof-of-stake. The number of weekly ETH deposits for the Beacon Chain was at an all time low.
The second-largest cryptocurrency will transition from the proof of work (PoW), consensus mechanism, to a more environmentally-friendly proof of stake mechanism next month. This much-anticipated event is known as the merge and has attracted plenty of attention.
Since December 2020, the Beacon Chain (the PoS-based coordination system of the new network) has been running parallel to Ethereum’s mainnet. This was when investors were first invited by Ethereum to deposit their coins in order to be validators.
The current total amount of ETH deposited on the Beacon chain stands at more than 13.3 million. This represents 11.18% Ethereum’s circulating supply.
The number of weekly ETH deposits has been declining steadily since May 1st, and recently reached its lowest level ever.
Only 12,377 deposits were made to the Beacon Chain during the week ending August 22, a stark contrast to the more than 500,000 deposits made during the week ending March 14.
This could be due to many reasons, but one reason is that people who want to stake Ethereum have already done so. Hildebert Moulie (a data scientist at Dragonfly Capital) told Decrypt that this was because more than 10% of Ethereum’s circulating supply had been staked.
Moulie explained to Decrypt that “Others may wish to wait post merge in order to ensure nothing goes wrong then.”
He suggested that speculation could also be behind the sharp drop in weekly ETH deposits to Beacon Chain. Investors might think that their short-term ROI is higher if they hold onto their coins in the hopes of obtaining some ETPOW –the cryptocurrency that could be generated by a controversial effort to resist the Merge via an Ethereum Hard Fork.
Moulie pointed out that the market momentum has been “quite terrible lately” and could be a deterrent to those who are considering depositing their ETH.
Ethereum has risen 4.4% in the last 24 hours and is trading at \$1,640 as of press time. However, it is down more that 55% since the beginning of the year.
