With 2.5% of all ETH standing in line this week alone ready to be staked, we're seeing the future look even more bullish. But let's not forget: where there are gains, there are pains. This staking frenzy also brings about issues with MEV and reduces our staking yields. But hey, every problem's a hidden opportunity, right?

Let's dive in and break down the latest in the Ethereum universe in the simplest way possible!

TLDR 📃

• 3M ETH are in the queue ready to be staked! Bullish long-term, but this will reduce profits for each validator.
• Lido, controlling over 30% of staked ETH, could pose centralisation risks to Ethereum.
• MEV (Miner Extractable Value) dominates Ethereum activity, creating challenges for user experience. Intents, a new transaction type, could be a partial solution to MEV issues.
• ETH's price action is boring, but $1,400 is in sight, especially given the recent Binance lawsuit.

Disclaimer: Not financial nor investment advice. Any capital-related decisions you make is your full responsibility.

3M ETH in the queue ready for staking! 👊🏼

Wow, we're breaking records this week with 3 million ETH plunging into the staking queue! That's a whopping $5.5 billion, extending the queue time to a whole 45 days for new validators. Yes, you need to wait in line to become a validator!

Here's a perspective check for you. Since staking deposits began 1.5 years ago, we've seen a total of 22.5M ETH staked. This week's influx? A staggering 13% increase in under 1% of that time.

To add to the wow-factor, this fresh ETH accounts for about 2.5% of the entire ETH supply. It's an absolutely jaw-dropping quantity.

But there's a twist. More ETH in the staking queue means lower yield for all validators. The more validators there are, the less each earns. Despite this, staking's popularity is skyrocketing, likely spurred by potential extra profits from MEV. More validators mean more chances of adding a block and pocketing MEV income on top of the basic reward.

What’s MEV? Short for Miner Extractable Value, MEV is like the cherry on top for blockchain miners. It's the extra profit validators can squeeze out by smartly deciding which transactions to include in a block and in what order.

Lido’s getting greedy 🍽️

Let's talk about the ETH staking market and how Lido is really shaking things up. They've got a huge stake in the game - over 30% of all staked ETH and more than 80% via LSD (Liquid Staking Derivative) services.

A bit worrying, right? With Lido controlling over a third of staked ETH, it's a real concern for Ethereum. Let us tell you why.

Imagine Lido hits a snag or decides to stop verifying new blocks. This could lead to big delays. If a Lido node is chosen to add a block and it refuses, it will slow down consensus significantly and it could happen a third of the time. Even blocks added by the rest of the nodes could be slowed down because you need a certain number of nodes to verify each block.

Now, think about this. Lido could also start to censor transactions, choosing what to include or leave out. This could cause serious delays for those "censored" transactions. The scary part? They might be forced to do this under government pressure. So, their gigantic share of staked ETH is really risky.

The surprising part? Lido seems to be cool with it. They're not saying sorry or slowing down. In fact, if they could, they'd go for 51% of the staked ETH. Not exactly comforting, is it?

Most activity is actually just MEV 💰

Validators are cashing in big time with MEV (Miner Extractable Value), and it's clear from the fact that MEV transactions now make up almost half of all Ethereum gas fees. Wondering what this means?

Well, MEV transactions are basically a way of profiting from upcoming transactions. Validators buy an asset before a major transaction pushes up its price. And to make sure their transactions are processed first, they often pay more in gas fees.

Here's the fun part - it's like a loop. Validators are spending a ton of gas on MEV transactions, and most of this gas ends up back with other validators. With half the gas spent on MEV, around 50% of a validator's MEV profits are essentially coming from their own pockets! It's a fair question to ask - without all this gas spending, would MEV be so lucrative?

An MEV solution?

Everyone's talking about Intents in Ethereum. They're a new kind of transaction that could help tackle some issues with MEV (Miner Extractable Value).

Intents let you declare what you want from a transaction, like buying a certain amount of a cryptocurrency. Then, someone else (a group called "solvers" or "builders") handles the complicated parts, like executing the transaction for you. This can help make things run more smoothly and potentially even save you some money.

You can see this in action on a platform called CowSwap, where users announce what they want to trade and solvers compete to make the trade happen at the best price.

But just like our coffee shop example, it's not perfect. Communication can be tricky - it's like trying to shout your order in a noisy room. And while there are trusted groups to handle your order, if they become too powerful, it could lead to issues.

Still, when done right, Intents can be really beneficial. For instance, on CowSwap, it can help protect your trades from price changes that can happen during large transactions. So, even if you have to pay a tiny bit more in fees, it might be worth it for the peace of mind.

Price analysis 📈

Let's face it - ETH's price moves have been a real snooze-fest lately, and it's kinda tricky to figure out. When things get muddled, it's best to set clear lines to guide your decisions.

Right now, it looks like ETH is more likely to head down to $1,400. But hey, if it manages to flip $2,000 from being a roadblock to a springboard, we'll have to switch gears and get bullish.

Just keep in mind, with the recent drama around the Binance lawsuit, a dip seems even more probable now.

Cryptonary’s take 🧠

There's a lot going on in the Ethereum world. With more and more ETH getting staked and locked, things are looking bullish. Our bet? Around 30% of the ETH supply will end up staked. One hiccup though - Lido's huge market share might lead to centralization issues. But, as the saying goes, one man's loss is another man's gain - hello LDO profits?

Meanwhile, much of Ethereum's activity is due to MEV, which isn't great news for user experience. Developers are brainstorming solutions like Intents, but it's still a work in progress. The challenge? Figuring out who executes these intent-based transactions and how they get assigned the job.

As for ETH's price, it's been a bit of a yawn fest and things are getting more complicated (thanks for nothing, Binance!). But there's a silver lining: the SEC lawsuit added some clarity for Ethereum by leaving it off the list of cryptocurrencies considered securities. This looks promising for the long run. Still, in the short term, we're keeping it bearish until further updates.

As always, thanks for reading 🙏