Ethereum Yields Slip Below 3% Amid DeFi Competition

- Ethereum's staking yield: Dropped below 3% as of June 18, 2025. - Rising competition: DeFi protocols and stablecoins offering higher returns. On June 18, 2025, Cointelegraph reported that Ethereum's staking yield sharply declined below 3%, now trailing the more lucrative returns from DeFi protocols and yield-bearing stablecoins. The decline in Ethereum's staking yield is attributed to the increasing amount of ETH staked on the network and the maturation of its ecosystem. Stakers have locked up over 35 million ETH, which is approximately 28% of Ethereum's total supply. While this substantial staked amount indicates strong investor confidence in the network, the protocol's design intrinsically lowers consensus rewards per validator as the amount of staked ETH increases. Solo validators primarily access the full staking yield, whereas users choosing liquid staking protocols or custodial services typically receive a lower net yield due to fees ranging from 10% to 25%. Despite this lower nominal yield for some users, Ethereum's real yield remains competitive against rivals such as Solana. This is because Ethereum's real yield accounts for its net inflation of 0.7%, whereas Solana's net inflation stands at 4.5%. Meanwhile, yield-bearing stablecoins like sUSDe and SyrupUSDC, which are often linked to U.S. Treasuries or synthetic strategies, provide higher returns of around 6% to 6.5% and offer users the stability of dollar-pegged assets along with passive income. Additionally, DeFi lending protocols such as Aave and Compound provide dynamic and often higher yields on supplied crypto assets, with stablecoin lending rates on these platforms typically ranging from 3.8% to 5%. Interestingly, many of these competing yield products are built on Ethereum's network. Consequently, this dependence on Ethereum’s infrastructure can indirectly bolster its value through increased network usage and transaction fees. Ethereum continues to be a leading and trusted blockchain for DeFi and real-world assets; therefore, this position suggests that while Ethereum may face increased competition in direct staking yields, its foundational role in the broader onchain yield ecosystem remains critical. According to CoinMarketCap on June 18, as of 22:09 UTC, Ethereum (ETH) traded at $2,532.29, and its 24-hour trading volume had increased by 0.544%.