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At its peak in 2021, the top 138 PoS protocols boasted $324B in staked token value. Today, staked tokens are valued at $71B, a terrifying 78% fall. What happened, and where do we go next?
We’ve compiled a comprehensive Staking Ecosystem report packed with proprietary survey insights from over 1,700 crypto users and 30 market-leading validator entities, high-profile speaker panel insights from our Staking Summit, and a wealth of streamlined raw validator data accessible via our Staking Rewards API.
The resulting 11,000-word report features 52 graphs and offers insights that are hard to find elsewhere.
The report explores concerns and innovations around decentralization, delves deep into users’ approaches to selecting protocols and their thoughts on staking, and provides unfiltered insights from validator operators who are sounding the alarm on their industry.
“Our report shows validators are potentially facing existential challenges that threaten not only their business but also the entire decentralization ethos of blockchains.” – Mirko Schmiedl, Co-Founder and CEO at Staking Rewards
Challenges are many, and if you’re an investor, read this report to understand the crucial role of delegating your tokens. If you’re a validator or thinking of becoming one, read the report to see what’s lurking and prepare to weather the storms ahead with insights from industry veterans.
Insiders in the report discuss the consequences of larger validator actions, increasing the risk of centralization. Insiders claim larger validators can afford to undercut commission fees to increase AUM. As a result, larger competitors have more revenue overall, more runway to build better infrastructure, and more voting power over protocols – a serious threat to decentralization.
To overcome these challenges for business continuity and increasing decentralization, industry operators recommend smaller validators focus on alternative revenue streams, offer value-added products and services, and implement new technologies such as liquid staking, MEV capture advancements, and decentralized validator technology (DVT).
Mr. Schmiedl adds, “Our report concludes that many insiders believe regulatory clarity is coming in 2023, which will propagate institutional interest and action. As institutions join the space, we anticipate they will also consider running validators, further helping counter a key issue in PoS, centralization.”
Despite headwinds, users and validator operators remain bullish on the future of crypto and discuss several positive narratives in the State of Staking 2022 report. Further, we overview six key catalysts we’re observing in 2023.
Staking Rewards is committed to advancing the long-term success of PoS protocols and enabling investors and validators to achieve their goals. The insights provided in the 2022 Staking Ecosystem Report will help drive the industry forward and support its continued growth.