Ethereum Staking Can Grow Larger with Liquid Staking and EIP 7251, Restaking is the New Catalyst

The amount of ETH staked on Ethereum has grown by 78% since the Shanghai Upgrade in April 2023, with 32.5 million ETH currently staked. However, only 27% of the ETH in circulation has been staked, compared to other proof-of-stake networks such as Solana and Cardano which have staking ratios between 48%-81%. The upcoming Ethereum upgrade, Pectra, will include EIP 7251 which will increase the max effective balance of validators from 32 to 2048, allowing staking service providers to consolidate validators and increase efficiency. Restaking is also becoming a popular way to stake ETH, with liquid restaking protocols and EigenLayer's points program driving demand. However, restaking also comes with risks such as smart contract and validation service quality.