ETH holders keep continuing to unstake their tokens from Ethereum but the pace of withdrawals has reduced over many months. 788,000 Ethereum tokens representing a full year of fresh supply has been unstaked since leadership struggles developed in the Ethereum Foundation.
Since November 7 an amount equal to 2.3% of all staked ETH has returned to general availability. ETH has 28% of its tokens staked with most of it concentrated on LidoDAO’s staking platform.
People are questioning Ethereum’s leadership and future plans because they worry about governance problems and see many coins leaving the platform. ETH staking rewards have decreased recently to deliver 2.19% annual returns for investors who held ETH for one year.
ETH investors mainly deposited low-priced assets under $2,000 until they started putting more funds in at higher prices recently. Deposits to Ethereum’s Beacon Chain dropped beginning August 2024 combined with more network participants withdrawing their funds every day.
Ethereum’s Economic Security Model Faces Rising Scrutiny
People question Ethereum’s choice to make “economic security” its primary network measure. An investment of 32 ETH worth more than $125,000 helps protect the ETH network from bad actors by making attacks less profitable. The network has more than one million validators yet its $64.37 billion total value locked in assets faces a challenge from sinking economic measures.
In January 2025 ETH placed second to Solana in generating fees when its network came in at $122.9 million while Solana generated $167 million. Staked assets on Solana are moving closer to matching Ethereum’s Beacon Chain totals which shows fast tokenization platforms may replace ETH as industry leaders.
As one of the leading ETH staking entities Coinbase has led many ETH withdrawals from its network. During the past month the exchange processed 331,000 ETH withdrawals indicating users’ preference for Solana.
The platform manages 3.4 million ETH worth more than $10 billion while serving 38% of user funds. LidoDAO revealed itself as the second-biggest ETH asset mover when users unstaked 124,000 ETH from their accounts. ETH users sent part of their assets from large platforms to smaller ones such as Ether.Fi, Kiln, and Galaxy Digital.
Although Layer 2 adoption rises and new projects launch including Sony’s Soneium chain Ethereum struggles to retain strong market growth. ETH keeps getting pushed under $3,100 because it performs worse than Bitcoin and other market assets. ETH hit $3,228.86 in trading and keeps declining when measured against Bitcoin.
The cryptocurrency market shows neutral attitudes towards ETH with most investors taking no side but a few professional traders slightly favoring lower prices. Whales sold their ETH while buyers reduced their activity which pushed prices down during January.
