July Market Sentiment Recovers: Total Staked Value Rebounds by 12%

In July 2022, the crypto market saw a significant shift in sentiment following months of bearish price action and macroeconomic uncertainty. One of the most notable indicators of this renewed optimism was a strong rebound in the total value locked (TVL) in staking protocols. According to data aggregated by OnStaking, staking TVL across major blockchains surged by 12%, signaling restored investor confidence and growing interest in passive yield mechanisms amid improving market conditions.

A Turn in the Tide: Market Optimism Returns

After a turbulent Q2 marred by the collapse of Terra, liquidity crises at lending platforms, and global inflation concerns, July brought a wave of cautious optimism. Bitcoin and Ethereum prices stabilized, with ETH rallying by over 30% from its June lows. This recovery was mirrored in staking activity, as both retail and institutional investors resumed locking their tokens to earn yield and support network security.

The market shift appears driven by:

• Anticipation of Ethereum’s upcoming Merge to Proof-of-Stake.

• Growing maturity of liquid staking protocols like Lido and Rocket Pool.

• Regulatory clarity on staking in key jurisdictions.

• Reduced fear surrounding crypto lending contagion.

Total Staked Value Bounces Back

Data from OnStaking reveals that staking TVL increased from approximately $280 billion at the end of June to over $313 billion by late July. Ethereum, Solana, Cardano, and Polkadot were among the primary contributors to this rebound, with ETH staking showing particularly strong momentum due to the Merge hype.

Breakdown by Network:

• Ethereum (ETH): The total staked ETH surpassed 13 million coins, driven by mainnet Merge anticipation.

• Solana (SOL): Validator activity hit all-time highs, with staking participation climbing to 77%.

• Cardano (ADA): Continued developer activity and upcoming Vasil upgrade helped sustain staking interest.

• Polkadot (DOT): Network governance improvements and parachain slot activity reignited demand.

Smaller networks like Near, Avalanche, and Cosmos also saw modest increases in staking volume, buoyed by high yields and strong ecosystem support.

Liquid Staking Drives Growth

Another trend bolstering July’s staking recovery is the surge in liquid staking solutions. These platforms allow users to stake assets while retaining liquidity through derivative tokens (e.g., stETH, rETH), enabling participation in DeFi protocols.

Lido Finance remains the dominant player, with over 4.6 million ETH staked via its platform. Rocket Pool and Binance Staking also recorded double-digit growth, benefiting from increased trust and broader integration across the Web3 ecosystem.

This innovation has addressed one of staking’s biggest limitations—illiquidity—and made it more accessible and attractive to a wider user base.

Institutional Investors Reenter the Market

Institutions, which had reduced exposure amid the market chaos of May and June, began revisiting staking strategies. Coinbase Institutional, Anchorage Digital, and BitGo all reported higher client inquiries about ETH2 staking.

The return of institutions reflects a belief in the long-term viability of PoS assets and confidence in crypto infrastructure resilience. Moreover, staking is increasingly seen as a viable fixed-income alternative in a high-inflation environment.

Regulatory Outlook: Cautious but Encouraging

Despite recent scrutiny—particularly the U.S. SEC’s investigation into staking services—the broader regulatory tone in July was more constructive. In the EU, the MiCA framework moved closer to finalization, offering clearer rules on staking for exchanges and custodians.

This tentative clarity helped reduce uncertainty and spurred capital inflow back into staking platforms, especially those operating within regulated environments.

Staking as a Barometer of Market Sentiment

TVL in staking protocols is emerging as a reliable barometer for market confidence. July’s 12% rebound reflects more than just token price action—it indicates a behavioral shift from short-term speculation to long-term value generation through yield farming and staking.

Furthermore, staking aligns investor incentives with network health, making it a key metric for analysts and developers alike.

Looking Ahead: Sustained Momentum or Short-Term Bounce?

While the July recovery is encouraging, questions remain about its sustainability:

• Will Ethereum’s Merge deliver on performance and security promises?

• Can staking yields remain competitive without unsustainable token inflation?

• How will regulatory bodies address liquid staking and centralized validators?

Despite these uncertainties, the July rebound has laid the groundwork for a more robust and matured staking landscape heading into the second half of the year.