$120 Billion in Staked ETH Masks Ethereum Supply Reality
Ethereum's institutional data hub reported $120 billion in staked ETH and $40.4 billion in daily average total value locked on layer-2 (L2) networks as of September 21.
The figures are often used to gauge Ethereum's demand, but they actually measure different things: the amount of ETH committed to network security through staking, and assets held across L2 networks. Combining them wouldn't accurately reflect fresh ETH demand.
US-traded Ethereum ETF sessions saw over $140 million in net outflows from September 15 to 18, yet large pools of staked ETH and assets on Ethereum-linked networks can coexist with investors pulling money from a particular investment channel. Staking involves depositing ETH to activate validators, which help secure Ethereum and earn rewards.
An owner can stake ETH already held, resulting in staking participation, but they could also acquire ETH specifically to stake it, so the result is not necessarily fresh demand in all cases. A staking balance expressed in dollars reflects both the ETH committed and its valuation, meaning it should not be read as the amount of new capital investors supplied during a particular day or week.