Ethereum staking rewards increase in the first week of May thanks to interest in memecoins, the new trend.
After The Merge update, Ethereum staking has become the most important activity on the network. To guarantee its security and operability, more validators need to be added. However, as more and more add up, the rewards are divided. Regarding this, the month of May has marked a relevant milestone, Ethereum Staking rewards increase in the first week of May.
In just one week, validators on the network raked in $46 million in bounties, up 40% from the previous week. The rewards for the first week of May reached almost 25,000 ETH compared to 18,339 ETH for the last week of April.
The recent trading craze for a new memecoin called Pepe (PEPE) is the reason for the increased rewards for validators. As gas rates rise, end users are paying more than $30 per transaction, which results in increased fee revenue for validators for transaction processing and regular validator rewards.
Ethereum Staking Rewards Rise, Validators Take $46 Million
At least one Bitcoin maximalist will have a headache after reading that the rise in rewards is largely due to the memecoin rush. The increase in network transaction fees has risen sharply thanks to PEPE, the meme coin that is creating a trading craze.
A graph that collects the information from berachoncha.in and ETH.STORE shows the annualized average of the reward and its current level (6.72%). The total rewards of the network reached 8.6% of the transactions, noting that validators enjoy, according to the ETH Store, consensus rewards for proposing and attesting blocks, as well as rewards for processing transactions from the Ethereum network.
Beaconcha.in claims that the current staking rate means the expected annualized return for validators. To participate in the network’s consensus procedure, Ethereum validators must block a minimum of 32 ETH, valued at about $58,000.
The average commissions of the Ethereum network reached 100 gwei, the unit of measurement that marks the transaction cost. This figure marks the highest average cost since May 2022, showing that the increase was a matter of time when network transaction costs reached 16,000 ETH in one day.
The community was quick to complain about Ethereum’s scalability and high transaction fees. An average end user can expect to pay up to $30 per transaction at a time when the network may be congested.
As transactions increase, validators will enjoy more benefits, although this is not an endless cycle. Attracting more validators will leave existing ones with fewer rewards, as these are spread across the network.
The Staking Dilemma and Its Appeal
At times like the present, the entire industry stops questioning whether staking was the correct consensus mechanism for Ethereum. The heart of the matter turns to the need to become a validator. The appeal is increasing and of course, after the Shapella update, the interest in Ethereum has only increased.
With only 32 ETH, approximately $58,600 at the present time, any person or institution can become a validator, either on their own, or using centralized services like Lido, Kraken, or Binance.
However, many tend to think twice, seeing Ethereum staking rewards increase, it is an indication that, very soon, the profits will be divided among more people. This is now not a problem with such a congested network, but at times of low network traffic, validators start to get restless.
By Audy Castaneda
