Q2 2026 — Staking yields settle into a new range

The first quarter closed with consensus rewards on Ethereum holding within a 28-basis-point band, the narrowest range in three years. The volatility that defined the post-Shanghai period appears, for now, to have run its course.

Three structural factors explain the new floor.

Validator queue dynamics have normalised. The entry queue stood at 412 validators on 31 March, against an exit queue of 305 — a near-balance that has prevailed for two consecutive months. Twelve months ago the entry queue was an order of magnitude larger. The opportunity cost of joining the validator set has narrowed.

MEV revenue has plateaued. Block builders captured, on average, 0.038 ETH per block in Q1 — almost identical to Q4 2025. Order-flow consolidation among the top three private mempools has reduced the dispersion that historically dragged on returns. We expect this to hold absent a regulatory intervention against private order flow.

Issuance is shaped by demand for blockspace, and demand has shifted. Layer-2 settlements now account for 36% of mainnet gas consumption, against 21% a year ago. That migration has trimmed base-layer fee burn, lifting net issuance modestly.

Net of all three, the staking yield expected by our research desk for the next twelve months falls between 3.05% and 3.45%, with our central estimate at 3.22%. Yields above 4% are no longer realistic without leverage, restaking, or both.

Implications

The premium that liquid staking tokens enjoyed over ETH spot — for years a function of yield uncertainty — has compressed accordingly. We expect stETH and rETH to trade at less than 30 basis points discount to ETH on average in 2026. For clients already exposed, that is a constructive development. For new entrants, the entry point matters less than it did.

We continue to favour stETH for non-Swiss-resident clients and rETH for clients with operational requirements around protocol decentralisation.