Ethereum (ETH) has witnessed a decline in demand over the past few months. Due to this slowdown in blockchain activity, the Ether burn rate has been reduced. This has increased the coin’s circulating supply and put downward pressure on its price.

In a new report, digital asset research firm 10X Research highlights what might be responsible for this. 

Ethereum Begins to Lose Its Shine

In its latest report, 10X Research highlighted falling staking yields on the Ethereum network as a major factor contributing to the decline in blockchain activity. For instance, the Annual Percentage Rate (APR) for users on Lido, Ethereum’s largest staking provider, has consistently dropped since August, now at 2.90%.

Read more: How to Invest in Ethereum ETFs?

The digital asset research firm highlighted that this trend stems from the rapid rise of low-cost meme tokens on chains like Solana. Consequently, many ETH holders now view staking primarily as a modest income source rather than a catalyst for broader ecosystem engagement.

Moreover, the existence of high-yield traditional finance options has also made staking ETH on the Ethereum network less appealing, further reducing the demand for the network.

“With TradFi interest rates (such as 2-year Treasury yields at 4.1%) significantly outpacing ETH staking yields at 2.9%, Ethereum holders face a slow bleed. The lack of demand for ETH drives down its collateral value in USD, Bitcoin, and other preferred benchmarks and diminishes overall appeal,” 10X Research explained.

10X Research noted that Ethereum saw a brief rise in activity

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Author: Abiodun Oladokun