The supply of Ethereum is going down, meaning all staking rewards are coming from transaction fees.
Since block fees are dropping, you'd think staking rewards would follow suit. But Lido's staking rewards look pretty stable. If you check it against eth, it seems consistent. Same goes for eth.fi and Rocket Pool, their staking rewards also appear to be steady.
How does that work?
Now, here's a bonus thought. To become a validator, you've gotta have a node with 32 staked eth. But it looks like the number of Ethereum validators is dropping, while the amount of staked Ethereum keeps rising. What's the deal with that?
It's not really constant, it's just that the APR hover around that range so they just give you the number to simplify things.
Honestly speaking, any yield you got from staking was never constant in the first place, real sustainable yield changes everyday and always on the lower side.
How can they guarantee a constant APR if that depends only on the network usage (and also on the pergentage of staking eth your operator owns)? The eth network usage (network fees) in the last year decresed of about 75%!
Ethereum is not like Bitcoin that have a (almost) constant block reward for 4 years.
APY from ethereum was not only coming from beacon chain. Mostly of LRT ETH such as LIDO, Rocket, and etc are also using defi strategies to get the yield. So, the number you have seen were coming from the various sources, it's not only rooting from the ETH beacon chain.
That's the reason it's quite constant. However, APR can up and down depend on how well result from all of strategies used by LRT ETH staking to get yield for its stakers.
As for why validators keep declining while staked ethereum keeps increasing. This is so simple, it needs time for 32 ethereum to be staked into the beacon chain. It takes much longer than exit queue. So it's normal when yo're seeing the validator decline, but staked ethereum gets increase as mostly of eth is still in the entry queue to be activated as validator. Please take a look at https://www.validatorqueue.com/.
There are still more than 2.5m ethereum have not yet activated as validators as it's still in the queue.
Yeah that's the thing. If you see at yield market, the underlying APY delivery for 1d for most of restaked coins changes dynamically. Take a look at pendle.fi a yield market, sometime you get good APR sometime you get nothing at all for most of restaking coins which interest derived from native staking.
Those constant APR promised is part of marketing stunt.I will give you a really good example from ETH restaked token from lido called wstETH on the picture above.
See those bluish dashed line? those are the real underlying APY on 1h chart, it changes everyday and hover around 2-3%. That's what I mean.
The APY has been going down, but it has been very gradual. You can see the historical APY below.
At the same time those rewards are still compounding. If you hold an LST, the exchange rate will keep rising steadily, so the line will keep going up if you are looking at a price chart. It might seem like the rate might not be changing because the decrease has been very subtle.
Lido is still young. We probably need a few more years of data for the slowing exchange rate growth to be more noticeable on the wsteth/eth chart.