- Ethereum, Solana, and Avalanche have become faster, cheaper, and more active despite their native tokens remaining well below 2025 highs.
- Bitwise says institutional investors are driving record staking participation, particularly on Ethereum, where more than 40.2 million ETH is now staked.
- Lower transaction fees have boosted network activity but also reduced protocol revenues, highlighting the tradeoff between adoption and profitability.
Ethereum, Solana, and Avalanche are seeing stronger onchain activity and record staking participation even as their native tokens continue trading far below last year’s highs.
According to Bitwise‘s first quarterly staking report, the three networks have become cheaper to use and are processing more activity, yet ETH, SOL, and AVAX have each declined by roughly half or more from their 2025 peaks.
The divergence suggests that improving blockchain fundamentals are not yet translating into stronger market prices.
Networks Become More Efficient
Bitwise found that transaction costs declined across the major proof-of-stake networks as developers continued expanding available blockspace and improving network efficiency.
According to Kam Benbrik, Bitwise’s Head of Onchain Research, blockchain activity has continued growing despite weaker market sentiment.
Rather than reflecting falling demand, much of the decline in protocol revenue resulted from design changes that intentionally made transactions cheaper and more accessible for users.
While lower fees benefit adoption, they also reduce the amount of revenue generated by the underlying networks.
Institutions Drive Record Ethereum Staking
One of the report’s biggest findings is the growing role of institutional investors in staking.
At the end of the second quarter, a record 40.2 million ETH—roughly one-third of Ethereum’s total supply—was locked in staking.
Bitwise says much of the recent growth has come from institutional participants, including exchange-traded funds, corporate treasuries, and other large investors seeking both staking rewards and long-term exposure to Ethereum.
This trend continued as BitMine, the world’s largest corporate Ethereum treasury, confirmed it is staking more than 4.9 million ETH from its holdings.
Yields Continue to Compress
Although staking participation continues rising, yields are gradually declining.
Bitwise reported Ethereum generated an annualized staking yield of approximately 2.84% during the second quarter, while Solana produced around 6.25%.
However, the report notes that the overwhelming majority of staking rewards on both networks come from newly issued tokens rather than transaction fees.
As more investors stake their assets, rewards are distributed across a larger validator base, causing individual yields to fall over time.
Liquid Staking Continues Gaining Popularity
Bitwise also highlighted growing demand for liquid staking, which allows investors to earn staking rewards while continuing to use tokenized staking positions throughout decentralized finance.
These liquid staking assets can be supplied as collateral, used to provide liquidity, or borrowed against without sacrificing staking income.
As institutional participation continues expanding, Bitwise believes staking is becoming an increasingly important part of how investors generate yield while supporting the long-term security and growth of major blockchain networks.
