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This week we cover two separate stories within the crypto space. After covering Ethereum’s upgrade constantly over the past few months, we take a final look of how it shaped out to be in terms of withdrawals and the market share of staking providers.

Then we dive into the recent meme token frenzy, with eye-popping gains leading to high gas costs on Ethereum and potentially marking a top for the market.

Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether.

• Ethereum fees climbed a whopping 73% week over week, with meme coin speculation driving gas expenditure (more on this later)
• Bitcoin fees dropped 9% as Ordinals inscriptions slow down

Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges

• Both Bitcoin and Ether recorded relatively modest outflows from CEXs

Shapella’s Effect on Staking Providers

Following the Ethereum Shapella upgrade, withdrawals from the staking contract have begun. Approximately 1.37M ETH have been withdrawn so far, while 650k ETH were also deposited, making net withdrawals of 720k ETH.

More interestingly, the share of deposits by staking providers has changed significantly since the upgrade — and perhaps not in the way most expected.

Liquid Staking Derivatives Lagging — LSD’s share of new staking deposits has lagged relative to their historical numbers

• Lido has still been the largest staking entity over the past week, but with a deposit share 37% lower than its market share since inception
• RocketPool’s share of deposits dropped even more drastically (by 72%), though it did just go through an upgrade on April 18, which enables users to host a validator with only 8 ETH (down from 16 ETH previously)
• Frax, on the other hand, recorded an increase of 225% on their share of deposits, making it the 8th largest staking entity over the past week

Institutional Staking & Asian CEXs Benefit from American CEXs’ Woes

• Institutional staking services such as Stakefish and Staked.us have seen their deposit share grow upwards of 150% relative to their historical numbers, likely as many of their institutional depositors were awaiting for withdrawals to be enabled to mitigate the risk of having their capital locked
• The real winners have been Asian exchanges, with Huobi and OKX recording an increase of 800% and 438% respectively
• Finally, as expected Coinbase and Kraken took a hit on their staking services, with their share of deposits dropping by 49% and 82% following pressure from American regulators in the last few months

Setting New Highs — Despite Lido’s deposit share decreasing, it’s continued growth has led stETH to a market cap of over $12 billion for the first time

• stETH supply increased by 127k ETH over the past seven days
• It’s supply has grown by 76% over the past year, and 24x from two years ago
• This has led stETH to become the eighth largest crypto-asset by market cap

Meme Coin Speculation Marks Short-Term Top

$PEPE Gains Fuel Speculation — a new meme coin, PEPE, has rallied 1,000,000% within just five days

• This has led to a wave of new meme coins and derivative projects to become some of the most traded pools in DeFi
• The amount of speculation is reflected on Ethereum gas fees, which on Wednesday reached their highest since May 2022, and Uniswap consuming 10x more gas than OpenSea this week
• As has previously happened, the recent wave of meme coin speculation appears to have coincided with at least a near-term top for crypto markets

Now the question is how deep will the correction be. Is it mostly done, or is there still a risk of the previous lows being revisited?