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Is ETH staking worth it? Almost 15 million ETH staking worth it indefinitely

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is ETH staking worth it

Is ETH staking worth it? After the Ethereum update known as Merge, ETH stacking has become a key element of the blockchain. Many investors have invested their coins in hopes of being rewarded, but no one knows exactly when they will be allowed to withdraw their money.

Millions of holders of the second-largest cryptocurrency successfully stacked ETH while the blockchain was preparing to move to proof-of-stake. Now that the upgrade has been successfully completed, and when the core Ethereum network has merged with Beacon Chain, the full functionality of stacking is available to users.

What’s wrong with ETH stacking? Is ETH stacking profitable?

It’s been almost two months and the cryptocommunity still doesn’t know when it will be possible to collect its ETH. What’s more, the Ethereum Foundation has removed any clear deadlines from its official website.

Developers claim that after the update, the network is more stable and secure, it scales better and adapts to changes in conditions. And most importantly, coins can no longer be mined after the merger. The network has a new model – stacking.

Users “freeze” their ETH for a certain period of time, thus providing liquidity and stability in the network. They get rewarded for renting out coins in this way. The whole process is very much like good old-fashioned time deposits with no withdrawal options.

The minimum stacking amount set in the Ethereum ecosystem is 32 ETH. However, on some platforms, including Lido, RockPool and StakeWise, it is possible to pool and deposit only a portion of the required amount.

So far, however, users are only pouring in money for stacking. But when they will be rewarded is unknown.

Timeline changes

Prior to the update, a timeline of six to 12 months was called. This information was previously publicly disclosed on the official Ethereum Foundation website. Withdrawal functionality is due to be implemented in the Shanghai update. However, the timeline for its implementation has been constantly pushed back. The official site has even removed the deadline and discreetly changed its stance on the withdrawal of stacked ETH:

All in the pools

Since stacking became available on the Ethereum network, users have deposited almost 15 million ETH there. At the time of publication, that’s over $18 billion. There are now only 467,399 unique validators on the network:

30.10% of ETH is currently controlled by Lido Finance, 13.70% by Coinbase, 7.90% by Kraken and another 6.40% by Binance. According to Dune Analytics, a total of four organizations control more than 60% of ETH on the stack.

According to Etherescan, ETH placed on Lido Finance (stETH) is in 126,333 unique wallets. Meanwhile, the Coinbase and Binance pools’ unique wallets total 4,296 and 9,969, respectively.

Deposits earn stacking fees of 5.30% per annum on invested capital. Various cryptoplatforms have even included their ETH stacking earnings pages, such as Bitstamp.

What are the risks of ETH stacking

Every aspect of the cryptocurrency industry comes with a risk warning. ETH stacking has risks as well. For example, a coin can get very cheap while the user doesn’t have access to the assets, or one can lose 1 to 32 ETH altogether.

While the Ethereum community is pushing for unlocking, the timeline is still unclear. There are billions of dollars worth of digital assets on the stack, so all eyes are on the Ethereum developers to deliver on their promises. This means that over $18 billion of ETH will still be lying dead weight until they add a withdrawal feature.

We previously reported that the CEO of Binance urged the ex-head of FTX to stop threatening tweets.


Net Bitcoin ATMs record an increase after 4 months of global downtrend

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The total number of crypto ATMs consistently declined in the first four months of 2023. During the timeframe, major economies like the United States contributed to the dwindling numbers, but Australia, Poland and Spain increased crypto ATM installations.

The chart above shows that, in the first four months of 2023, the net crypto ATMs worldwide declined by 5,850. In May, however, 1,397 machines were added back to the global crypto ATM network, confirming data from Coin ATM Radar.

While Bitcoin ATMs do not contribute to the growth of the Bitcoin network, it serves as a physical gateway for people to exchange their fiat currencies for crypto. In 2023 alone, Australia installed a total of 233 ATMs, climbing up the ranks to become the third-largest crypto ATM hub in the world.

Despite a poor year-long reduction, the United States maintains a leading position — representing 84.7% of crypto ATMs worldwide, followed by Canada at 7.6%.

At the time of writing, 35,069 ATMs remain operational worldwide. Recently, a hacker managed to access sensitive information of Bitcoin ATM manufacturer General Bytes, including passwords, private keys and funds.

“We have taken immediate steps to prevent further unauthorized access to our systems and are working tirelessly to protect our customers,” General Bytes said in its statement.

Previously hacker managed to drain at least 56 BTC and 21.82 ETH. To avoid a similar situation in the future, the company advised its operators and customers to migrate to a self-hosted server installation, which can be secured by a virtual private network.

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Microsoft pens AI cloud computing deal with former Ethereum miner CoreWeave

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Microsoft has reportedly signed a deal with former Ethereum miner CoreWeave to use its cloud computing infrastructure to support its artificial intelligence (AI)-powered services.

According to a June 1 report from CNBC, which cites “people with knowledge of the matter,” Microsoft is potentially set to spend billions of dollars on the deal with CoreWeave over multiple years.

One of CNBC’s sources claimed the deal was signed earlier in 2023.

Amid the rapid growth of AI tech over the past 12 months, Microsoft has rolled out several AI-powered services. A prime example is OpenAI’s GPT-4 integration with its web browsers Bing and Microsoft Edge, which the firm recently axed the waitlist for.

OpenAI also utilizes Microsoft’s own cloud computing infrastructure, Azure, to handle its sizable computing requirements.

CoreWeave started off as an Ethereum miner in 2017, utilizing graphics processing units (GPUs) to verify transactions on Ethereum during its formative days as a proof-of-work blockchain.

The firm started pivoting its focus to cloud GPU computing around 2019 after spotting a hole in the market for competitively priced, scalable and varied compute options — something it claimed legacy providers weren’t offering.

Notably, reports of the deal with Microsoft come just a few days after CoreWeave announced that it had extended its $221 million Series B funding round from April to bring the total to $421 million.

The Series B was led by Magnetar Capital, with participation from long-standing strategic partner Nvidia.

In April, the firm stated that the capital would be used to expand its cloud infrastructure, which is focused on a wide range of computational workloads such as AI, machine learning, visual effects and rendering — among others.

Commenting on the Microsoft deal via Twitter, Nic Carter, Bitcoin advocate and Castle Island Ventures general partner, highlighted the significance of the firm’s change of industry:

“Ppl make fun of ‘crypto to AI pivots’ but CoreWeave went from mining ETH to using their fleet to do compute for AI and now they’re worth $2b+… one of the fastest growing companies in the world right now.”

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Six months on from FTX, Tether mines BTC, and Nvidia’s AI superchips

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This week’s Crypto Biz looks at the crypto industry since the FTX collapse, Tether’s Bitcoin mining in Latin America, Tabi’s funding round and Nvidia’s artificial intelligence machines.

Just over six months after FTX’s dramatic collapse, the crypto industry can finally begin analyzing the effects of the debacle. The quick ripple effect to other crypto businesses drained liquidity from the industry and prolonged the crypto winter, with Silvergate Bank, BlockFi and Genesis Global Capital among those hit by the exchange’s collapse.

FTX’s bankruptcy has also affected the crypto regulatory landscape, with authorities cracking down on firms — employing controversial methods in some cases — to avoid a deepening blend of traditional finance with cryptocurrencies.

Companies that closed their United States operations citing regulatory pressure in the past months included Bittrex, Nexo and Unbanked, to name a few. Coinbase CEO Brian Armstrong said this week that China stands to benefit most from restrictive crypto policies in the U.S., but only time will tell if this is true.

Companies are also reviewing their business operations due to increased regulatory scrutiny. In response to crypto firms being debanked, Binance has even considered buying a bank in the past months, said its CEO Chanpeng Zhao. Now, the crypto exchange is gearing up for a layoff that will boost its compliance and regulatory capabilities.

While the industry digests the recent events, FTX’s new management claims FTX 2.0 could be launched as soon as next year, hopefully in time to join the club of crypto companies striving to remain in business after November 2022.

This week’s Crypto Biz also looks at Tether’s Bitcoin mining operations in Latin America, Tabi’s funding round and Nvidia’s efforts to power the next generation of artificial intelligence (AI) machines.

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