The recent Shanghai upgrade of the Ethereum blockchain has resulted in a surge of institutional investment into staking services for ETH.
According to Michiel Milanovic, an analyst of Ethereum blockchain developer firm ConsenSys, top institutional-grade staking service providers have recorded three times larger inflows in April compared to all of last month. Around 80% of these inflows occurred after the Shanghai upgrade went live on April 12.
After the Shanghai upgrade, it became possible to withdraw approximately 18 million tokens that were previously locked up in staking contracts. This helped to mitigate the liquidity risk associated with staking and subsequently led to a surge in ETH price, which reached its highest level in 11 months, reaching USD 2,100. Kiln, an institutional-grade staking service provider, conducted a survey indicating that 68% of investors plan to start staking or increase their staked amount following the upgrade.
The interest in staking has extended to traditional finance (TradFi) firms, with Kiln reporting a 60% increase in deals in the pipeline, including with brokerage firms and investment banking services holding companies in the US and Europe. Kiln has recorded USD 47 million in new deposits since the Shanghai upgrade, while rival platform Staked.us booked USD 111 million in inflows. However, Milanovic cautioned that it is still early to draw definite conclusions as not all staking providers have enabled withdrawals immediately.
