Half of All Ether Is Now Locked in the Staking Contract
Ethereum's proof-of-stake deposit contract has crossed a milestone that no other major blockchain has reached at this scale: as of February 18, 2026, more than 50% of the total ETH supply sits inside the contract, according to Santiment data reported by Cointelegraph. It is the first time in Ethereum's 11-year history that more coins are staked than freely circulating.
The deposit contract, which holds all ETH committed by validators to secure the network, had been climbing steadily. Santiment flagged 77.85 million ETH (46.6% of supply) in mid-January 2026. A month later, the contract has absorbed enough additional deposits to push past the 50% line, a threshold that reshapes how markets think about liquid ETH supply.
What makes this remarkable is the timing. As of February 18, ETH has fallen roughly 46% from its October 2025 all-time high of $126,080. Stakers are not locking coins because the price is mooning. They are locking coins because they believe the network's long-term yield and security guarantees outweigh the short-term drawdown.
Why 50 Percent Is More Than a Round Number
The 50% threshold matters because it fundamentally shifts Ethereum's supply dynamics. When more than half of all coins are locked in a contract with protocol-enforced withdrawal rate limits, the free float available for trading, DeFi, and spending shrinks dramatically.
Ethereum's exit queue architecture caps validator withdrawals at roughly 57,600 ETH per day, as of the time of writing. Even if every staker wanted out simultaneously, it would take months to fully unwind. That makes the deposit contract less like a savings account and more like a one-way valve: easy to enter, slow to leave.
For context, most proof-of-stake chains have staking ratios above 50%. Solana sits around 65%, Cosmos above 60%. But Ethereum is different. Its staking ecosystem includes a $16.25 billion restaking market via EigenLayer, a liquid staking sector dominated by Lido (24.2% market share), and a growing institutional staking infrastructure that includes ether.fi with 2.1 million ETH staked. The complexity of Ethereum's staking stack means 50% participation represents far more economic infrastructure than a simple lockup.
The Numbers Behind the Milestone
Here is where the deposit contract stood heading into this milestone:
- Validators: Over 1.1 million active validators securing the network
- Economic security: Approximately $112 billion in protocol-level security value
- Staking yield: 3.3% APY on average (2.84% base consensus rewards plus MEV and priority fees)
- Top staking providers: Lido (24.2%), Binance (9.1%), ether.fi (6.0%), Coinbase (5.1%), Figment (4.1%), Kraken (3.7%)
- Net staking flows: Had briefly turned negative (-600,000 ETH) in early January, but reversed course
The January dip in net staking flows makes the February recovery even more notable. Stakers who paused in January came back with enough conviction to push the contract past the halfway mark. That pattern, hesitation followed by acceleration, often signals a structural shift rather than a temporary spike.
Institutional demand has been a major catalyst. Tom Lee's BitMine purchased 4.37 million ETH in a single week in mid-February, pushing its total holdings past that mark. Harvard opened a first-ever $87 million Ethereum position through the BlackRock ETHA ETF. The 21Shares Solana staking ETF paid its first reward in January, but the Ethereum staking ETF ecosystem is where the real institutional weight sits.
What This Means for ETH Holders and Stakers
For holders who are not staking, the math just got harder to ignore. With 50% of supply locked and earning roughly 3.3% APY, non-stakers are effectively diluted over time. Every block reward goes to stakers, and every MEV opportunity is captured by validators. Holding unstaked ETH is now a deliberate choice to forgo yield while the network inflates your share away.
For stakers, the news is more nuanced. Higher participation compresses yields. The base consensus reward is inversely proportional to the square root of total staked ETH. At 30% participation, solo validators earned roughly 4.5% APY. At 50%, that baseline drops. The current 3.3% average already reflects this compression.
The concentration of staking power also raises governance and centralization questions. Lido alone controls 24.2% of all staked ETH. Binance holds 9.1%. The top six entities collectively manage over 52% of staked supply, meaning a handful of operators control validation for more than a quarter of Ethereum's entire coin supply. Vitalik Buterin has repeatedly flagged this as a systemic risk, and the 50% milestone will reignite that debate.
For users of staking-based crypto cards, the compressed yield means tighter margins on rewards. Cards from ether.fi, which let users spend against staked positions, depend on the spread between staking yield and operational costs. As yields fall, card issuers may need to subsidize rewards from other revenue streams.
The Broader Impact on Ethereum's Ecosystem
The supply squeeze has cascading effects across DeFi. Protocols that depend on liquid ETH for lending pools, DEX liquidity, and collateral markets now compete for a shrinking free float. Aave, Compound, and Morpho all require borrowable ETH. When half the supply is locked in staking, borrowing costs rise and capital efficiency becomes more critical.
This is exactly why liquid staking tokens (stETH, cbETH, rETH) and restaking protocols like EigenLayer have become so important. They turn staked ETH into productive collateral that can participate in DeFi while still earning validator rewards. EigenLayer's $16.25 billion TVL represents the market's answer to the liquidity problem that 50% staking participation creates.
For self-custody card products, the dynamic is particularly relevant. Cards from Gnosis Pay and MetaMask let users spend from wallets that can also hold staked positions through liquid staking derivatives. The more ETH that moves into staking, the more demand there is for financial products that bridge the gap between locked capital and everyday spending.
The tokenized RWA market on Ethereum, now above $17 billion, also benefits from higher staking participation. More validators means more security, which means more institutional confidence in deploying real-world assets on the network. BlackRock's BUIDL fund, Ondo Finance, and other treasury tokenization projects all depend on Ethereum's security guarantees, which just got 50% stronger in terms of skin in the game.
FAQ
Does 50% staking participation mean Ethereum is more centralized? Not necessarily, but concentration among large staking providers is a valid concern. Lido, Binance, and Coinbase together control roughly 38% of staked ETH. However, Lido operates through a network of independent node operators, and Ethereum's protocol-level slashing mechanisms create economic penalties for malicious behavior regardless of who runs the validator.
Can stakers withdraw their ETH quickly? No. Ethereum's exit queue rate-limits withdrawals to approximately 57,600 ETH per day. A mass exodus would take months to complete. This is by design: it prevents the kind of bank-run dynamics that could destabilize the network.
Why are staking yields falling? Staking yields are inversely related to participation. As more ETH is staked, the reward per validator decreases. The current average of 3.3% APY will continue to compress as more coins enter the deposit contract. MEV and priority fees can supplement base yields, but they are variable and depend on network activity.
How does this affect ETH price? The supply squeeze reduces the amount of ETH available for selling, which can create upward price pressure during demand spikes. However, it also means less liquidity on exchanges, which can amplify volatility in both directions. The net effect depends on whether demand for liquid ETH grows faster than the rate at which stakers lock it up.
Overview
Ethereum's proof-of-stake deposit contract now holds more than 50% of all ETH in existence, a milestone that no other blockchain of comparable market cap has reached with such a complex staking ecosystem. Over 1.1 million validators have committed their coins to securing the network, earning an average 3.3% APY while the token price sits 46% below its all-time high. The milestone signals structural conviction among Ethereum's stakeholder base, compresses liquid supply across DeFi and exchange markets, and raises important questions about yield compression and staking centralization. For everyday crypto users, the message is straightforward: Ethereum's committed capital base has never been deeper, and the free float has never been thinner.
Recommended Reading
- Harvard Trims Its Bitcoin ETF by 21% and Opens a First-Ever $87 Million Ethereum Position
- Ethereum Tokenized RWA Market Crosses $17 Billion After a 300 Percent Year-Over-Year Surge
- Ethereum Hits 10 Years of 100 Percent Uptime, a Reliability Record No Other Layer 1 Can Match
