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Ethereum experiences its first sustained validator exits, with daily active users dropping to April 2022 levels.
ChainCatcher reports that, according to The Defiant, Beaconchain data shows that the number of daily active validators on Ethereum has decreased by approximately 10% since July, reaching the lowest level since April 2024. This is the first significant decline since the network switched from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism in September 2022.
The decline is attributed to two main reasons: first, the bullish trend of Ethereum this year led to an unprecedented high number of validators exiting the queue, with staking operators rushing to cancel their stakes to sell for profit. Second, the decrease in staking yields and rising borrowing costs have made leveraged staking unprofitable. Currently, Ethereum’s annualized staking yield is about 2.9% APR, well below the all-time high of 8.6% recorded in May 2023.