34.7% of ETH is staked as Ethereum staking becomes mainstream asset management

Recently, two more interesting numbers have emerged regarding Ethereum Staking.

One is 34.7%.

As of late August, approximately 42.4 million ETH have been staked on the Ethereum network, accounting for about 34.7% of the total supply—a record high. Even more striking, over 2.2 million ETH are currently queued at the validator entry point; at the current rate, newly staked funds will need to wait nearly 39 days to be officially activated.

Another change comes from traditional finance.

In August, Fidelity advanced its staking arrangements for its Ethereum fund, FETH, having already signed custody agreements with Anchorage Digital and BitGo, and clearly designing a staking rewards distribution mechanism.

These two seemingly unrelated changes are actually a microcosm: over the past six months, Ethereum staking has been rapidly evolving from a niche on-chain activity into a more standardized form of asset management.

For ordinary ETH holders, a more practical question is beginning to emerge:

If you decide to stake, should you run your own node, choose Native Staking, Lido, or simply deposit with an exchange?

Let's start with the most basic question.

After Ethereum completed The Merge, the network no longer relies on miners to secure the network through computational power; instead, validation nodes participate in block verification and consensus by staking ETH.

To become an independent validation node, the minimum requirement is 32 ETH.

Validators receive consensus-layer rewards from the Ethereum protocol for staying online, correctly performing attestations, and participating in block proposals. Conversely, prolonged offline periods result in penalties, and serious violations such as double signing may lead to slashing.

From this perspective, the rewards from Staking are not arbitrary "interest," but rather protocol rewards earned by users providing economic security to the Ethereum network using their own ETH.

But over the past few years, Staking has had a less intuitive issue: rewards do not automatically compound.

In traditional 0x01 validators, even if they earn additional consensus layer rewards of 0.5 ETH or 1 ETH, any amount exceeding 32 ETH is automatically withdrawn by the network to the withdrawal address and does not continue to participate in the next staking round.

To start earning rewards again with these ETH, you’ll need to accumulate the required staking amount and redeploy.

Pectra changed this.

The maximum effective balance for new 0x02 validators has been increased to 2048 ETH, and balances exceeding 32 ETH can now gradually increase their effective staking amount according to protocol rules. For long-term stakers, the process of “earning rewards—withdrawing—redeploying” can, for the first time, be automatically completed within Ethereum’s native protocol (see further reading: “When 8 Million ETH Begin to ‘Move’: Structural Shifts in Staking in the Post-Pectra Era?”).

If you map out the timeline over the past six months, you’ll see that ETH staking is gradually evolving from its early, relatively crude model of “lock 32 ETH for rewards” into a more sophisticated asset management mechanism.

Fidelity incorporates staking rewards into ETFs to address the traditional finance user's question of "who stakes for me?"; Pectra improves capital efficiency at the validator level; Lido and other liquid staking protocols enhance liquidity; and professional node operators are beginning to separate operational management from asset control.

Therefore, today when comparing staking, what you should consider goes beyond just APR—it requires a comprehensive evaluation.

Overall, the ETH Staking options currently accessible to ordinary users can generally be divided into four typical pathways.

At first glance, they may seem like just four ways to achieve the same return, but the fundamental difference lies in which portion of power and risk the user chooses to delegate to a third party.

1. Run your own node: Earn the most "native" rewards with full control.

The purest form of ETH staking is to prepare 32 ETH yourself, run both the execution and consensus layer clients, and maintain your own validator node.

In this approach, you decide how to deploy and run nodes, which clients to use, and when to exit, and you do not need to share the protocol-generated rewards with any liquid staking protocol or exchange.

However, the barrier is also high, as you need not only at least 32 ETH, but also a reliably running device, a stable network environment, and ongoing maintenance of the client version, node status, and key security.

Ultimately, running your own node means exchanging higher technical and operational costs for maximum control and more complete rewards.

2. Native Staking: You retain control of your assets while outsourcing the "operations"

The second approach can be understood as a middle ground between Solo Staking and full custody.

Users still contribute their own 32 ETH to create independent validators; the ETH ultimately enters Ethereum’s native staking system and is not exchanged for another token, but node operation is handled by professional service providers.

The most important distinction is that withdrawal rights and node operation rights can be separated.

Validators have different keys: the Signing Key is used for daily signing and block validation and can be managed by a professional node service provider, while the Withdrawal Credential, which ultimately determines the destination of principal and earnings, remains under the user’s control.

This is also a crucial distinction between non-custodial native staking and exchange-custodied staking; for example, imToken’s current non-custodial ETH staking service is designed according to this approach (see also What is imToken’s Non-Custodial ETH Staking Service?):

Users holding more than 32 ETH can create their own validator, with the withdrawal key controlled by the user, while node operation is handled by professional infrastructure. Additionally, multiple options are available, including compounding validators and automatic withdrawal validators.

It is well-suited for users who have at least 32 ETH, seek native staking rewards, value self-custody, but do not wish to manage a validator node daily.

Of course, "non-custodial" does not mean "no third-party risk"—node operators can still experience downtime, misconfigurations, or even slashing; therefore, what is transferred here is not ownership of the assets, but the operational risk of the node.

3. Lido: Trade a bit of "native" functionality for liquidity

If you don’t have 32 ETH, or simply don’t want to tie up a single ETH for an extended period in the validator exit queue, liquid staking offers a completely different path.

Lido is one of the most prominent examples. After users deposit ETH into Lido, the protocol allocates the funds to node operators to participate in Ethereum staking and issues stETH to the users.

Thus, ETH that was originally locked in staking and non-transferable has been wrapped into a chain-based asset that remains tradable; users can still transfer and trade stETH, and can further participate in DeFi scenarios such as lending and liquidity provision.

To exit, you can either follow Lido’s redemption protocol to reclaim ETH, or directly sell your stETH for ETH on a DEX—this option doesn’t require waiting for the validator to actually exit, but comes with the cost of prevailing market prices and slippage.

Meanwhile, stETH continuously reflects the staking rewards earned by users through mechanisms such as rebasing, so ordinary users generally do not need to manually handle the process of claiming rewards and re-staking them.

On the other hand, convenience introduces an additional layer of risk: Lido currently charges a protocol fee, which is distributed among node operators, the DAO treasury, and others, with users receiving the remainder. More importantly, it additionally introduces risks related to Lido’s smart contracts, protocol governance, node operators, and the secondary market liquidity of stETH.

It should be noted that there is no mandatory 1:1 peg between stETH and ETH, as seen with fiat-backed stablecoins. If the market suddenly experiences heavy selling pressure on stETH, it may trade at a discount relative to ETH. Additionally, using stETH in more DeFi protocols further introduces new smart contract and liquidation risks.

The ETH staking portal on imToken has now been integrated with Lido, allowing users to participate in liquid staking and hold stETH without needing to own 32 ETH.

4. Exchange Staking: Lowest barrier to entry, but what you have is a "platform promise"

The last option, which many new users are most familiar with, is to deposit ETH on an exchange and click "Staking".

From a user experience perspective, this is undoubtedly the simplest.

No need to prepare 32 ETH, no need to understand validator nodes, and no need to manage Signing Keys or Withdrawal Keys, or worry about server downtime.

The exchange aggregates large amounts of users' ETH to run validators and distributes a portion of the earnings to users' accounts according to its own rules.

But precisely because of this, this approach requires the most trust. The “1 ETH staked” that users see is often merely a record within the exchange’s internal account system; how validators are deployed on the underlying layer, how much asset is actually staked, how rewards are reinvested, what percentage the platform takes, and how liquidity is fulfilled after users submit redemption requests—all depend on the specific platform’s product design.

More importantly, the assets are first held by a centralized platform; of course, this doesn't mean that exchange staking is necessarily "bad"—for beginners who already keep their ETH on an exchange and have no intention of managing their own on-chain wallets, it may still be the lowest-barrier option.

The convenience you gain essentially comes from entrusting the platform with asset custody, node operation, yield distribution, and even the withdrawal process.

When you put all four methods together, you'll notice an interesting phenomenon.

The evolution of Ethereum staking products is not about all solutions converging to the same endpoint, but rather about continuously breaking down the specific capabilities that different users truly need.

• Run your own node and take control to the fullest extent;
• Native Staking separates "ownership of funds" from "node operation";
• Lido recombines "staking rewards" with "liquidity";
• The exchange further hides the complexity by using centralized custody to achieve the lowest possible barrier to entry;

Fidelity’s plan to integrate staking into an ETF represents another step forward—investors no longer need to hold ETH on-chain or understand how validation nodes work; traditional financial products can handle custody, node operation, yield generation, and even final yield distribution on their behalf.

From this perspective, staking is increasingly resembling a mature financial infrastructure service.

So how should ordinary users choose?

If you own at least 32 ETH, have some technical ability, and highly value self-custody and direct participation in the Ethereum network, running your own validator remains the option with the fullest control.

If you have 32 ETH but do not wish to manage the long-term node operations, yet still want to maintain full control over withdrawal rights, non-custodial Native Staking offers a relatively natural compromise.

If you hold fewer than 32 ETH or have ongoing trading, lending, and other DeFi needs, Liquid Staking providers like Lido offer significantly higher capital flexibility at the cost of an additional layer of protocol risk.

For exchange staking, it is more suitable for users who already accept centralized custody and wish to minimize operational barriers, provided they understand that platform risks do not disappear simply because of an added "Staking" button.

So today, when looking at Ethereum staking, APR may be the last number you should compare first.

If two products differ by only a fraction of a percentage point in annualized yield, but one requires you to fully entrust your assets to a third party while the other lets you retain control over withdrawals; if one requires waiting in a validator queue to exit while the other allows instant market sales via an LST; if one enables native compounding while the other depends on the platform’s reward handling—these differences often matter far more than the surface-level APR.

After all, staking rewards are never isolated.

How much profit you earn is inherently the same account as how much liquidity, control, and additional risk you gave up to achieve that profit.