Ethereum Staking Sees Billions Shift to Corporate Elite, Draining Exchanges

Ethereum staking is undergoing a significant transformation, with billions of dollars worth of ETH moving from cryptocurrency exchanges towards a new class of corporate players. This shift is driven by the attractive yield offered by staking, which allows companies to earn protocol-native rewards while securing the network. Public companies are increasingly adopting Ethereum as a treasury asset, leveraging its staking capabilities to compound holdings and potentially enhance shareholder value.

Key Takeaways

• Public companies collectively hold an estimated 6.5–7.0 million ETH, representing over 5.5% of the circulating supply.

• Ethereum's staking mechanism offers a roughly 3% APY, providing a native yield distinct from Bitcoin's scarcity-driven model.

• Companies are utilizing a "treasury flywheel" strategy, combining equity financing through stock premiums with staking rewards to increase ETH holdings per share.

• There's a notable migration of staked ETH away from major exchanges like Coinbase towards more institutional-grade staking solutions.

The Rise of Ethereum as a Corporate Treasury Asset

Public companies are increasingly viewing Ethereum (ETH) not just as a speculative asset but as a treasury instrument. Unlike Bitcoin, which primarily relies on scarcity and market re-rating for its corporate treasury playbook, Ethereum offers an additional layer of yield generation through staking. Companies can acquire ETH, stake it to earn protocol rewards (estimated at around 3% APY), and then present this combined exposure to equity investors. The strategy aims to compound holdings in token terms, with the potential for public markets to finance growth phases when sentiment is favorable.

Understanding Ethereum Staking Mechanics

Ethereum operates on a proof-of-stake consensus mechanism. Instead of energy-intensive mining, it relies on validators who lock up ETH as collateral. These validators run software to propose and attest to new blocks. Successful participation is rewarded with protocol-native ETH, while errors or malicious behavior can lead to penalties, including loss of rewards or a portion of the staked ETH (slashing).

By the end of 2025, approximately 36.08 million ETH, or 29.3% of the total supply, was staked. This substantial and growing market makes staking an attractive and established option for institutional players.

The ETH Treasury Flywheel: Financing and Yield

Corporate ETH treasuries employ a two-pronged approach to maximize returns. The first is "mNAV arbitrage," where companies issue new shares if their stock trades at a premium to the market value of their underlying assets. The proceeds are then used to purchase more ETH. If the premium is significant, this can increase the ETH held per share for existing investors. The second component is the staking yield, which provides a steady accumulation of ETH over time with relatively low marginal costs once the necessary infrastructure is in place.

This "flywheel" effect aims to increase ETH holdings per share through a combination of market financing and protocol yield, especially when markets are optimistic and capital markets are accessible.

Institutional Staking Preferences and Exchange Outflows

As institutional adoption grows, staking practices are diversifying. While retail investors often stake through exchanges for simplicity, and DeFi users opt for liquid staking tokens, institutions are seeking more robust, compliance-oriented solutions. These often involve defined operational roles, auditability, and structures that align with existing regulatory expectations.

Evidence of this shift is seen in the significant outflows from exchange-based staking. For instance, Coinbase's share of staked ETH reportedly decreased substantially, while Binance saw an increase. This suggests large holders are moving away from direct exchange custody towards "enterprise-grade" staking structures, such as those offered by Liquid Collective, which provides a liquid staking token (LsETH) favored by institutions.

Risks and Future Outlook

The Ethereum treasury trade faces several potential risks. Concentration risk, where many large players utilize similar infrastructure, could lead to network-wide fragility if a client outage or misconfiguration occurs. Capital market volatility is another concern; if equity premiums compress, the financing loop for acquiring more ETH could break. Finally, regulatory and governance changes could impact the operational structures and reporting practices required for these treasury strategies.

The long-term viability of this trend hinges on how effectively companies manage staking operations without introducing hidden fragilities and how consistently their equity wrappers can maintain premiums to fuel the financing loop.

Sources

• A sudden shift in Ethereum staking is draining billions from exchanges toward a new corporate elite, CryptoSlate.