Staked Ether Is Creating a Benchmark for the Crypto Economy, Says ARK Invest
Staked ether (stETH) is emerging as a benchmark in the on-chain economy, resembling sovereign bonds due to its yield structure. The current annualized yield on staked ether is 3.27%. Unlike government bonds, staked ether cannot default, and users can access their funds anytime. However, it carries risks such as slashing from validator malfunctions and high volatility compared to stable bonds. Investors can stake ether through their own validators or DeFi protocols like Lido, which provide liquid staking tokens (LSTs) for additional utility. stETH is increasingly used as collateral in DeFi, totaling approximately 2.7 million stETH, or 31% of its supply. This trend pressures other crypto projects to offer competitive yields. As staked ether gains traction, it may influence the broader crypto economy similarly to how the Federal Reserve's funding rate impacts traditional finance.
