In recent weeks, staking rewards for ether have risen for both ether-backed liquid derivatives and for ether-backed liquid stake derivatives. This is due to an increase of maximal extractable value (MEV), and other activity on the network.
In recent weeks, Ethereum Staking Rewards have increased. Validators are now receiving higher transaction fees due to increased network activity.
The seven-day moving average of annualized staking rewards for stETH (a liquid staking token backed with ether) has reached 5.5%, noted Mika Honkasalo, DeFi researcher on Twitter.
According to Lido Financing, this is an increase of 3.5% from September.
The APRs for those who leverage their staking rewards through offerings like icETH and ETHMAXI have shot up to 11%. These tokens can be used to borrow additional tokens, and all tokens are staked, increasing yield.
The primary reason for rising yield is increased network activity. This includes activities that result in higher fees to network validators. Honkasalo explained that the highest extractable value (MEV), activity, where bots run transactions on the blockchain, has seen a rise in popularity.
Honkasalo said that there has been an increase in trading altcoins on Uniswap over the past weeks. This has been led by The Protocol token, which was created as a joke after one of Vitalik Buterin’s tweets.
In recent weeks, there has been lots of additional activity in the form XEN. XEN tokens are free to be claimed as long as the claimants have paid the Ethereum transaction fees. This effectively spammed the blockchain for several weeks.
The increased activity on Ethereum has led to a decrease in the supply of Ethereum over the last few weeks. This is because more tokens were burned as part of the transaction fee process than were made as rewards for validators. Anthony Sassano , co-founder of EthHub, highlighted via Twitter that the supply has not increased in the past 30 days because the burning process has equaled the issuance.