Staking in 2022: Ethereum’s Merge, Institutions, Layer-2, and Liquid Staking

cryptonews.com:

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Staking is seemingly set for a big 2022. With Ethereum (ETH) planning an eventual move to a proof-of-stake (PoS) consensus mechanism this year, it will bring staking to thousands if not millions of users who’ve never tried it before, with the growth of ETH staking likely to feed into similar growth elsewhere.

But according to industry figures speaking with Cryptonews.com, general growth is not the only trend that staking can look forward to in the coming months. We can also expect to see increased institutional interest in staking, as well as the growth of liquid staking, staking via layer-2 protocols, and via GameFi (decentralized applications (dapps) with economic incentives) and NFT platforms.

And while the triple-digit rates of return offered by some staking services may not be sustainable in the long-term, they are likely to remain competitive for the foreseeable future, helping to spur staking’s continued growth.

There’s little doubt that staking had a good 2021. According to data provider Staked.us, 7.7% of all coins in the crypto market were staked in the fourth quarter of the year.

Staked’s Q4 2021 report also found that proof-of-stake cryptoassets accounted for 31% of the market’s overall capitalization, up by 127% compared to a year previously. It also reported that rewards from staking equaled USD 15bn in 2021, up by 939% across the previous 12 months. 

However, as big as staking became in 2021, industry participants agree that it will grow even further this year.

“Yes, I expect this will increase significantly, driven by increased Ethereum staking. The ‘merge’ [when the current Ethereum Mainnet "merges" with the beacon chain PoS system], which is ~6 months away, will increase the returns to ETH stakers