The value of Ether locked up in smart contracts on the Beacon Chain has recently exceeded $85 billion, marking a significant milestone as 25% of the total circulating supply is now staked. With close to one million active validators, Ether's price has seen considerable growth, reaching a yearly high above $2,800.

During the first half of February, an additional 600,000 Ether were deposited into Ethereum 2.0 staking contracts, coinciding with the surge in Ether's price to yearly highs. The increase in staking activity has led to a reduction in Ether available on exchanges, thereby enhancing the network's security and efficiency while decreasing the supply.

The integration of the Beacon Chain with the original Ethereum proof-of-work chain in September 2022 introduced staking, or Proof of Stake (PoS), to the Ethereum network. Currently, those who stake their ETH on the Beacon Chain receive an annual return of 4%.

The Ethereum 2.0 network, overseen by a group of validators, initially began with 21,063 participants but has since grown to over 900,000. To become a validator, an Ethereum holder must stake 32 ETH, contributing to network integrity and stability.

Despite expectations of a surge in withdrawals of staked Ether following the April 2021 Shanghai upgrade, the pace of new staking has outpaced withdrawals, indicating a strong preference for the passive income opportunities offered by staking. As Ether's price approaches the $3,000 mark, attention is now focused on the potential approval of a US-based spot Ether exchange-traded fund, which could have a significant impact on the trajectory of the world's second-largest cryptocurrency.