Ethereum Lags behind in Staked Shares: Here's Why Solana Leads Instead

In a significant shift in the cryptocurrency landscape, Solana [SOL] has surpassed Ethereum [ETH] to become the largest blockchain by staking market cap. According to recent data, Solana's Total Value Locked (TVL) surged to $11.49 billion, reinforcing renewed confidence from both traders and developers.

Solana's lead in staking economics is currently held, with around 67-70% of its circulating supply, about 410-420 million SOL, being actively staked. This is considerably higher than Ethereum, where approximately 28-30% of the supply, roughly 34-35 million ETH, is staked.

Over 1,300 validators and 1.2 million delegators are staking Solana, contributing to its robust staking ecosystem. In contrast, Ethereum boasts over a million validators, but Liquid staking provider Lido [LDO] controls nearly 88% of Ethereum's staking market.

Solana's stakers earn higher yields, with APY rates between 8.3-11.5%. These attractive returns are attributed to Solana's inflationary rewards and MEV tips from Jito, a decentralised protocol that collects and distributes transaction fees.

The future of Solana's lead depends on Ethereum's next round of upgrades and Solana's ability to sustain high yields without long-term inflation risks. Solana's bullish price action may also be influenced by increased institutional interest.

Ethereum's higher entry barrier, which requires 32 ETH to run a validator, continues to be a significant factor. However, the surge in Solana's TVL and its lead in staking economics suggest that the landscape of the cryptocurrency market is evolving.

As always, it's essential to conduct thorough research and consider all factors before making investment decisions.